Melbourne gets in on the auction game
Melbourne residents with mortgages who are looking to upgrade to new properties may consider auction as a selling method for their existing dwellings.
It appears that auctions are becoming increasingly popular in the Victorian capital, according to figures released by RP Data.
"Last year Melbourne saw 30.5 per cent of sales by auction compared to 21.1 per cent for the previous year. The proportion of sales by auction tends to follow the market; rising when prices and demand increases and falling in soft markets," the industry analysts noted in a June 23 media release.
It's expected that 2014 will top 2013's results, setting a new record. By the end of this year's first quarter, 30.6 per cent of property sales were by auction. This figure will likely rise, too. The proportion of sales by auction tends to climb throughout the year, given the tendency for this sales method to dip during January and the beginning of February.
"This means we are likely to see a significant shift in selling methods towards auctions this year. This would be unprecedented because price growth and clearance rates are lower than in other years when this occurred," RP Data stated.
Auction is often favoured by vendors because of its chance for flow-on success - even if a property doesn't pass at auction, there is a "high likelihood" that sellers of the dwelling will find a buyer within a month, RP Data explained.
Though it represents the property industry in a different state, the Real Estate Institute of New South Wales (REINSW) has weighed in on the auction debate.
The key industry body asked Auctioneer and Sales Manager for Highland Property Agents Laura McKay whether auctions are the "best" sale method.
"Setting an auction date essentially gives the seller a defined date to work towards to achieve the sale," Ms McKay told the REINSW.
Director at OH Property Group, Oliver Stier, had a different opinion, noting that some buyers aren't fans of the competitive nature of options.
No matter which selling method you choose, be sure to consider a mortgage refinance in order to secure a favourable interest rate for your next property purchase.
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