Canberra auctions: What to know if you are the sole bidder at an auction

Potential buyers who find themselves as sole bidders at auctions have recently been bidding against themselves to secure a sale, but is this the best tactic? 

Buyer’s agent Claire Corby of Capital Buyers Agency said there were many things to consider if you were the sole bidder at an auction, starting with identifying yourself as one. 

From there, Corby said the secret was to keep a cool head, as auctions could be “pressure-cooker environments”. 

“You’re going to be very nervous and emotional because. after all, it’s a home that you are considering to live in, which can hijack your brain and your ability to think clearly on the day,” she said. 

“If there is only one person registered at an auction, the auctioneer will still be trying to impress the vendors who employed them, as well as any potential buyers that may want to sell in the future in the neighbourhood.

“There is a lot of pressure put on buyers for this reason.” 

Domain’s August Auction Report revealed Canberra had the biggest annual drop in clearance rates of all the capital cities, hitting 55.2 per cent over the month, down from 83.3 per cent this time last year. This was also a 1.3 percentage point increase from the month prior. 

According to Allhomes data, just 54 per cent of homes sold under the hammer last Saturday. 

Corby said the current decline in clearance rates was largely to do with a gap in the market, and negotiations that occured post-auction were forcing vendors with potentially unrealistic expectations to find a middle ground.

“When prices in the market are softening, clearance rates are coming down, and we are finding there is more opportunity for buyers,” she said. 

“There is a gap between what vendors might have been hoping for at the time they decided to sell, and what buyers are prepared and able to pay now.

“But also now, if vendors are interacting in the same market, they are potentially paying less for their next home as well … they are forced to be more realistic as the market has changed.” 

Nik Brozinic of Carter and Co Projects said the drop in clearance rates was expected to happen this year, but auctions were still managing to produce strong sales in one way or another.

“With changing interest rates, there have been circumstances with buyers’ limits changing around their approval capacity,” he said. 

“There is likely also a slight fatigue in buyers wanting to participate in auctions coming off the back of the strong market we saw last year.

“We were expecting what we are experiencing now to happen earlier in the year, but it was slower to start flowing through the market. But we are also still seeing strong sales through auctions.” 

Brozinic added that the decreasing clearance rates provided other opportunities to achieve great results for both buyers and sellers after homes were passed in.

“Taking a property to private one-on-one negotiations if there are no multiple registered bidders creates a more comfortable environment for negotiations, rather than doing it in front of a crowd,” he said. 

“Sometimes there’s a bit more flexibility; we typically set the reserve based on a combination of evidence-based market value, comparable to recent sales, as well as pre-auction offers throughout the sales campaign.

“When a property is correctly appraised … there is really not much of a gap to compromise on. If anything, there may be more flexibility around settlement timeframes and deposit amounts if needed.”