Strong homebuyer demand is critical for a successful auction, according to data obtained from a new online tool that reveals the Melbourne suburbs where auctions are the most popular method of sale.
The new online tool, launched by the Real Estate Institute of Victoria (REIV), should help agents and vendors make the decision about the most appropriate sales method for their property, according to REIV CEO Enzo Raimondo.
“The maps clearly show auctions are the most popular sales method in the inner city, whilst in the outer suburbs most sales are conducted privately," Mr Raimondo said. "This, in part, explains why the median price of a home sold at auction is higher than one sold at private sale, as residential property is much more expensive in the inner suburbs.
“Whilst overall auction sales have represented around 22 per cent of all sales in Melbourne this year, there are some suburbs with a higher number and some with less."
Mr Raimondo said analysis of the data over 2010 and 2011 revealed a trend towards private sales as the level of competition dropped.
“This highlights auctions work better when there is a high level of demand generally, or for a specific property,” he continued. “When teamed with data showing weekly clearance rates, this information is an invaluable and unique resource for all those active in the residential real estate market.”
Mr Raimondo said suburbs which saw more than half the homes sold by auction in 2011 included Elsternwick, Surrey Hills, Armadale, Richmond, Malvern, Northcote and Camberwell.
“At the other end of the spectrum, less than five per cent of homes were sold by auction in Narree Warren, Werribee, Rowville, Craigieburn and Mooroolbark," he added.
“It is also the case that clearance rates tend to be higher in the suburbs where auctions are more prevalent.”