‘Buyers are few and far between’: Are pre-auction sales back in Canberra?

As the market in Canberra moves closer to normality following the COVID pandemic house price peaks, pre-auction offers are visible once again, agents say. 

According to preliminary auction results, last weekend’s auction clearance rate was 42 per cent, a significant drop from the 76 per cent Canberra recorded at the same time last year. 

As the market levels out and sellers and buyers are trying to find a middle ground, agents are having to make the most of any opportunity to sell, said Steve Lowe of Agent Team Canberra. 

Lowe recently sold the home at 17 Berne Crescent, Macgregor prior to auction, producing a sale within a week of its listing. 

“During COVID, we stopped selling to our database, we stopped selling off-market, we stopped selling prior to auction and only sold homes in auctions themselves because it was the only way to allow buyers a chance to buy,” he said. 

“If you sold pre-auction at that time, you would end up with heaps of buyers that missed out [and] didn’t get an opportunity to put an offer forward for a home.

“In the current market, buyers are few and far between, so you have to be open to selling to the database and buyers pre-auction. Come auction day, the buyers that you thought were going to be there might not actually show up because they found something they prefer.” 

Lowe said current pre-auction offers were being welcomed with open arms, as they were a quick way for owners to sell homes and for buyers to secure a property before Christmas. 

“If we think the offer is one of those auction-stopping offers, and the buyer is in a position to sign the contract and pay a deposit, then we are happy to take it,” he said. “Pre-auction offers are definitely coming back.” 

Samuel Thompson of LJ Hooker Manuka, who also sold the property at 19/3 Hansen Circuit, Isaacs, prior to auction, said selling a property this way could also work in the client’s best interests. 

He said there was always a hope the home would sell before auction, but they strategically proceeded with an auction campaign anyway.

“At the moment the market is very versatile and it is changing, so while having the auction campaign gives no price for the property, it really puts the home on a pedestal for exactly what it offers, which I think maximises the price for the home,” Thompson said. 

The running of auction campaigns in a changing market “can be dicey”, so getting a good sale through any means during the process is welcomed, he added.

“Off-market transactions and transactions done prior to auction are definitely happening more and more, and I think it’s because people are wanting to get any kind of result,” Thompson said. 

“Because of that, if you can find the right buyer and the right seller to put the deal together and optimise the sale, that is exactly what the agents need to be doing.

“Running complete auction campaigns without any interest is happening more regularly as there are more homes being listed, and declining auction clearance rates are only proving that.”