Days on market may be increasing but homes sold by auction sell on average within 40 days. Compare this to selling by private treaty where it takes more than 55 days says William Clark, Ray White Group Data Analyst.
Sometimes, economists talk about the economy ‘cooling down’ or ‘overheating’, and this can often be quantified using various transaction volumes. The time between a house being listed and it being sold is measured in real estate circles as ‘days on market’. Using this measure, we can see as the OCR has been rising in the past two years, the market has slowly been cooling as houses remain on the market for longer. There is a strong inverse correlation between days on market for a given house and the price this house will fetch. Time to bargain and shop around helps prospective buyers, and increases competition for the vendor against other vendors.
If you want to sell something quickly, selling by auction is the best way to go to market. Since we began tracking days on market, there have been very few time periods where selling by private treaty yields a quicker result. While selling quickly may not be the vendor’s key aim, there is also a strong link between homes selling quickly and achieving a higher price. Right now, this is clearly the case. Days on market may be increasing but homes sold by auction sell on average within 40 days. Compare this to selling by private treaty where it takes more than 55 days.
Days on market are currently high, driven by slow market conditions. With interest rates widely considered to be at or close to peak, it is likely that prices will reach a trough in coming months. This greater certainty in the property market means that we will see more buyers and homes selling quicker, driving down this key metric.