Just over a quarter of residential properties offered for sale in Australia went to auction last financial year, but the proportion was over a third for Sydney, Melbourne and Canberra.
“Auction listings have been rising since the 2008/09 financial year when back then, auctions comprised a much lower 16 per cent of all dwellings listed for sale,” CoreLogic RP Data’s head of research Tim Lawless said.
Sydney and Melbourne have driven that proportion higher as their housing markets have heated up, and it reached 25.6 per cent in 2014/15.
The figures, from CoreLogic RP Data on Thursday, show that 39 per cent of homes sold in Melbourne went under the auctioneer’s hammer, compared with 38 per cent in Sydney and 36 per cent in Canberra.
A distant fourth came Adelaide (16 per cent), then Darwin and Brisbane (both 11 per cent), then Perth (three per cent) and Hobart (two per cent).
The booming state of the two major markets goes a long way toward explaining the high proportion of auctions there.
“When market demand is high and buyers are highly competitive, the auction process is likely to provide the best possible price on a property transaction,” Mr Lawless said.
“However, the opposite occurs when housing market conditions are weak.” High auction clearance rates in Sydney and Melbourne suggested actions would remain popular there for the time being.
But the appeal of auctions in a booming market doesn’t explain Canberra, where housing prices grew only one per cent over the year to July, after rising just two per cent the year before, but where the auctions remain popular – much more so than in other capitals with soft housing markets.
That’s where culture comes in.
“While Melbourne, Sydney and Canberra have a well-established auction culture, other capital cities still list the vast majority of homes for sale via private treaty,” Mr Lawless said.
In Brisbane, Darwin, Hobart and Perth, homes put up for auctions are typically in the more expensive price range, or have some unique qualities.
SUBURBS WITH THE HIGH PROPORTION OF SALES BY AUCTION HOUSES
Queens Park (Sydney suburb) 98.3pct
Clovelly (Sydney suburb) 95.9pct
Malabar (Sydney suburb)95.7pct
Kew East (Melbourne suburb) 97.1pct
Carlton North (Melbourne suburb) 91.3pct
Bronte (Sydney suburb) 89.5pct
Source: CoreLogic RP Data