Blog Head to auction to secure your next home

Head to auction to secure your next home

28 November 2014
Head to auction to secure your next home

The cash rate remains at its all-time low of 2.25 per cent, which is likely to have led to a greater provision of cheap home loans across the country.

If you've got your eye on making the most of the good times and taking your next steps onto the property ladder, you will need to make sure you find a home that's right for you.

One means of doing this is to head down to auction. Not only will you have the pick of many top quality properties, but there's the added excitement of being in the sale room.

Auctions have seen their popularity surge over recent times, so it's well worth considering this method if you're unsure of how to find real estate that's right for you.

How popular are auctions among property buyers?

Looking at auction activity in the country's biggest cities is possibly one of the best ways to see just how popular this method of buying really is.

In the period to October 26, Sydney witnessed nine weekends in a row where its clearance rate was above 80 per cent, Australian Property Monitors (APM) reveals.

Spring is typically an active time for the property market and it seems buyers are well and truly out in force.
The same goes for Melbourne, where APM notes there was a clearance rate of 75.4 per cent last weekend. While this was slightly below the 76.4 per cent recorded previously, it nevertheless points to strength in the market.

Admittedly, some parts of the cities witness stronger auction activity than others, which is why it's so important to do research into your chosen area.

Sydney's inner west was identified by APM as being the city's leader with a clearance rate of 85.4 per cent. A total of 88 sales were completed from 103 properties going under the hammer.

This was followed by the south of the Harbour City with a clearance rate of 84.5 per cent, while the lower north ranked in third on 81.8 per cent.

If you're looking into the Melbourne market then auction competition is likely to be fiercest in the outer east, where 85.2 per cent of properties were sold over the weekend of October 25 and 26.

The inner south and south-east were also hotbeds for auction activity with clearance rates of 82.5 per cent and 80.5 per cent, respectively.

What do I need to know before heading to auction?

Although auctions can be a good way of finding your next property, as with any major purchase it's essential to do your homework before heading to the sale room.

This means researching not only the property but the area in which it's located. You wouldn't buy any other real estate on a whim, so make sure you're not tempted to do the same at auction.

It's also a good idea to look at what other real estate in your local area has sold for, as this will give you an idea how big a home loan you will need in order to secure it.

Most auctions will require you to have a deposit on the day of the sale, so make sure all your finances are in order before you start bidding or you could be left disappointed.

It's worthwhile having all the paperwork with you when you head to the sale room, as this will speed up the sales process and ensure you can start enjoying your new home as soon as possible.

With the popularity of auctions on the rise, there's always the possibility you might be outbid, so have a few options in mind.

Photo by Jason Boyd from Pexels