Going, going, gone? Auctions lose popularity

THINKING of buying or selling under the hammer?

An auction can be the most transparent way of participating in the property market, but it’s not always best according to property experts.

CoreLogic data reveals the Gold Coast recorded a 52 per cent auction clearance rate over the weekend with 44 properties taken to auction.

Ray White Mermaid Waters principal Mitch Palmer, who auctioned a Mermaid Waters house for $1.54 million on Saturday, said he was taking an average of three properties to auction every weekend.

“We don’t auction every property,” Mr Palmer said.

“For us it’s got to be a property that has a large buyer audience and therefore can create good competition.”

He said the biggest mistake an agent could make was taking a niche property to auction.

“A niche property could be something that has a large negative, like backs on to a main road, an out-there facade or something that’s non traditional,” he said.

“When you take a property to auction it has to have a good demand.”

Michael Kollosche, managing director of Kollosche Prestige Properties, tends to put a listing price on properties he is marketing rather than take them to auction.

“Our view within our organisation is that the prestige sector market doesn’t have enough depth to warrant us taking properties to auction,” Mr Kollosche said.

“We don’t believe you will achieve the best outcome for your seller under auction circumstances unless you have a property that will appeal to a lot of people and will likely have a lot of demand.”

He said as properties climbed in value, the number of potential buyers dropped considerably.

“When you’re looking at properties for $4 million, $6m, $10m and $15m, the number of qualified buyers will be far less compared to properties priced from $1m, $2m and $3m.

“If you look at prices preGFC when credit was easily available, there were a lot more bidders at those bigger auctions.

“You could have six, seven and sometimes 10 bidders at a $10 million property.”