Should homeowners sell by private treaty or auction?

Vendors often ponder whether to sell by private treaty or auction. Recommendations may vary depending on the state of the market, and – to a certain extent – insight into current conditions and buyer sentiment can be judged by clearance rates.

Clearance rates are a statistic that vendors hold in high regard, perhaps increasingly so considering Canberra house prices experienced a jump of 4.3 per cent to a median of $723,980 during the three months leading up to September. House prices are $68,512 higher compared with the corresponding period last year, a rise of 10.5 per cent, but prices are also $30,018 higher than they were three months ago.

House prices in Canberra produced the second-best performance of Australia’s major cities for the quarter. The figure was marginally behind the robust Hobart housing market, which steamed ahead by 4.4 per cent over the same period.

As prices strengthen, it is likely to spur confidence among spring vendors mid-way through an auction campaign. The final Saturday of October closed with a bang with clearance rates hitting 82 per cent, the highest result across Australia’s capital cities. However, like any big-picture statistic, once analysed it shows that the regions of Canberra perform to varying degrees.

The number of houses sold at auction in Canberra declined 0.8 per cent in the October 2017 quarter compared with the same period last year. The number of houses sold under the hammer increased in Belconnen and Gungahlin, whereas all other regions experienced a decline.

The number of houses sold under the hammer during this period was 5.2 per cent higher than the July quarter. Quarterly, all regions accounted towards the increased number of houses sold at auction, apart from the inner south and Tuggeranong, where numbers slid.

The highest clearance rate was in the inner north at 82 per cent, followed by the inner south and Belconnen at 79 per cent. Belconnen was the only region to achieve a marginally lower clearance rate compared with the July 2017 quarter, dropping from 82 per cent. The inner south had the highest median price at $1.3 million, based on properties auctioned throughout the October quarter.

Relatively robust clearance rates were recorded in Weston Creek and Woden Valley at 73 per cent and 71 per cent, respectively.

If 70 per cent is the benchmark to determine a seller’s market, technically only two regions failed to fall within this category: Gungahlin (69 per cent) and Tuggeranong (64 per cent).

The varied auction results across Canberra highlight the importance of understanding local market behaviour before jumping to conclusions from the city’s wider performance. Overall, Canberra continues to provide robust auction results.