It’s clear that over the past few weeks, consumer sentiment has started to slowly shift. 

That’s because we’re generally a glass half-full population, which is why we’re seeing more listings and more optimism generally.

In fact, over the lockdown, our auction market held up remarkably well with Brisbane clearance rates generally superior to what they were before the Federal Election last year.

The valve of potential sales activity has been freed up a little, but there is still an undersupply of buyers in my opinion. 

So, with more listings coming to market, what can vendors do to help secure a sale?

Well, they can sell by auction, of course, and here are three reasons why they should. 

1.    Establish true market price 

The way that properties are priced for private treaty sales by looking at historical relevant and recent sales evidence. 

We then create a comparative market analysis as well as take into account the vendor’s expectations to arrive at the listing price. 

The number one issue facing agents for the foreseeable future is that any recent sales are not overly relevant. If a property sold in February, it might as well as have sold in 1993!

That’s because if you lined up 100 random people at present, each one of them would have a different take on what has happened to the market and no one is right and no one is wrong. 

So, agents are in danger of either pricing properties too high or too low because there are not enough recent, and relevant sales, to help them determine the most accurate price.  

Pricing the property too high will mean it simply won’t sell, and too low will see the vendor’s potentially miss out on valuable cash flow. 

2.    It creates a deadline 

The market currently lacks buyer depth, which means there is also no urgency from them to buy. 

However, auctions create a deadline for a sale to happen.    

This lack of buyer urgency is likely to last for some time because of the sheer number of people who have had their incomes negatively impacted by the coronavirus crisis.

Lenders will probably also be more conservative when it comes to approving new property loans as well. 

Auctions create competition amongst buyers, but it also creates time pressure, which means that even if there are only one or two bidders, they understand that now is the hour to purchase that property. 

3.    Shorter time on market  

Selling by auction also shortens a property’s time on market. 

At the moment, the optimal time on market is between 21 and 28 days, but most private treaty listings are languishing much longer than that. 

As we head closer to the cut-off date for financial support packages as well as mortgage pauses, and looming the spring selling season, we may see an excess of properties but still a low number of buyers. 

Of course, those market conditions are when prices start to soften.

However, most auction campaigns are 30 days, which means that vendors will be well-placed to sell their properties long before the aforementioned potential market wobble.