STATE BY STATE SNAPSHOT
Although it’s often referred to as the ‘Australian market’, there are marked differences in the property markets across states and territories, and the world of auctions is no different. Some of the states have been flying the auction flag for years while others are still very new to a world that exists under the hammer.
2018 is set to be a tough year for some states, with Northern Territory and Western Australia feeling the pressure of life at the bottom of the cycle. A slowing market was a similar topic of concern for other states; our auctioneers from New South Wales, Victoria and Queensland had all felt the pinch. Other states remain optimistic, with rising prices in Hobart and a steady outlook in the ACT and South Australia buoying the lacklustre results from other regions. •
The market in Western Australia isn’t for the faint of heart, as the property prices will tell you. Although many experts are saying the region has hit the bottom of the cycle, it may be a while before prices recover.
“Western Australia has experienced a tough few years. We have seen increases in the number of properties on the market and decreases in population levels,” said Freeman.
“This year we have felt a slight shift in the market sentiment; however, it is still proving to be a market for only the toughest of agents.”
WA allows 10 vendor bids (the only state with this number) and doesn’t require bidders to register before they place a bid.
There has been modest price growth in Adelaide, but South Australia is still marked for investor action and it’s a market with a more positive outlook than some states.
Although a low percentage of properties on the market in Adelaide do go to auction, the rates in the state are higher than others with bigger volumes. This means that for auctioneers in Adelaide the outlook is pretty optimistic. “We’re having very good feedback and good participation,” says Colman. Buyers need to be registered before bidding at auction in SA and vendors are allowed three vendor bids on the day. Auctioneers must be registered in the state to conduct an auction.
One idiosyncrasy of the SA market is that agents can opt to give no price guide before the auction day and instead provide a list of recent sales. The reserve price set on the day cannot exceed 10 per cent of any price guide given – whether written or verbal.
Tasmania is the market on everyone’s lips, with ABS data from the end of 2017 showing Hobart to be the fastest-rising capital city for residential prices. Despite it being a small auction market currently, there’s some exciting growth on the horizon, says Hart.
Only 1.6 per cent of properties went to auction last year in Tasmania, but Hart remains convinced that number will rise. “We’ve got some challenges from the auction places down there, but certainly from a real estate market point of view we’ll be one of the best in Australia,” he added.
Pre-registration is a must in Tasmania, but there are no limits on how many vendor bids can be placed.
Things aren’t so sunny in the Northern Territory, where property values have fallen significantly and vendors are facing selling at a loss.
“We’re actually having a massive shake-up; in my 23 years I’ve never seen it so difficult,” says Secondis.
Auctioneers in the state are required to hold a specific licence and vendors must establish a reserve price prior to auction, which cannot be revealed by the auctioneer. There is no limit to the number of vendor bids that can be placed.
Although vendors in the Sunshine State are becoming more comfortable with the auction culture, the region is battling the realities of a cooling market, says Nickerson.
“It’s been a real year of change. We’ve had a lot of ‘sold priors’ and when that increases in a market, it is usually a sign that something’s happening with that market. It’s either strengthening or weakening. I think the Brisbane market is weakening a little bit at the moment,” he says.
Queensland’s clearance rates aren’t as healthy as other states, sitting regularly below 50 per cent, but Bell said that some regions are doing better than others; good auctioneer and agent teams can still get properties over the line, particularly in Brisbane.
While Queensland also requires buyers to be registered to bid on the day, they have a unique system for price guides. In this market it’s illegal for a price guide to be provided, and in the event that a prospective buyer wants one the process is followed in writing.
Queensland also allows limitless vendor bids and requires auctioneers to have a specific licence.
NEW SOUTH WALES
The market is cooling in New South Wales, but vendors aren’t getting the memo. As a result of the red-hot Sydney market in the past few years, vendor education is a ‘hot’ topic with our auctioneers.
“The auction process itself is still working, it’s still a great way to sell property, but it is taking a little bit longer given the vendor expectation of the price point,” says Benson.
It’s the agents who make the difference in the Sydney market, according to Keenan. He says the great agents he works with, like Gavin Rubinstein, put in the hard yards which is what gets their properties over the line.
There’s been a severe crackdown on underquoting in the past few years in NSW, resulting in $22,000 for agents with vague price guides. Bidders are required to pre-register to bid at a Sydney auction, and the vendor is awarded one bid per auction.
Brown tells of a more positive market outlook than many states in the ACT, adding that auctioneering is an industry on the rise.
“We’re an emerging market in the sense that, while auction has been around for quite a while, it’s now being engaged as one of the, if not the, choice initiative sales,” he says.
“On the whole I think we’re in a very positive market. We remain wary of what’s happening around us in the other states, but at this stage the forecast looks pretty bright,” he adds.
The ACT also requires all bidders to be registered at an auction and only allows one vendor bid.
Despite good results in January, another dip in the market in Victoria means agents are having some tough conversations with vendors.
“Vendors are sort of stuck in that honeymoon period; I think they’re about to get a bit of a hangover, unfortunately,” says Reid, adding that vendor expectations are currently sitting around six months behind the market outlook.
Victoria does not require buyers to register before an auction, and auctioneers do not need to hold a specific licence, unlike other states. They also allow limitless vendor bids.