'We needed that competitive rush': The five factors that supercharge your chance of auction success

Selling a property at auction is not for the faint-hearted. The pressure (or thrill) of getting your price on the day is an experience like no other.

But there are factors than can increase your chance of success, according to new research, including the day of the week and the month you choose to sell, your location, the state of the market and the attributes of your property.

Domain’s three-part In Focus: Auctions series has revealed that the proportion of sales by auction has almost doubled over the past 10 years. Sydney, Melbourne and Canberra continue to dominate, but sales have been rising in smaller auction markets like Brisbane and Adelaide as well.

Domain chief of research and economics Nicola Powell said Australia’s auction market had evolved in recent years and that a number of key factors now gave some sellers an advantage.

“It’s long been known that higher-priced homes are sold at auction rather than private treaty. This still rings true today and probably subconsciously skews a seller’s decision to opt for an auction,” she said.

But there’s more to it than just how expensive your home is, Dr Powell said.

“The transaction method, the day an auction is held, the rate of selling success and the price outcomes are not the only determining factors to consider when selling or buying. These can also be skewed by geographical location biases, property type and home attributes.”

“There is a criteria that will help home owners navigate selling decisions and provide buyers with unique insights to create an auction-day game plan.”

1. Day of the week

While midweek auctions are catching up, Saturday auctions still perform best by a long shot, Dr Powell said. After Saturday, the most successful days to go to auction are Sunday, Thursday and Wednesday.

2. Location 

In what may come as a surprise to some, the data shows South Australia and the ACT as the state or territory where a property is most likely to sell by auction.

Queensland properties are less likely to sell by auction compared to states like NSW and Victoria, the report found.

Dr Powell said auctions were also no longer just for inner-city homes.

“Traditionally, sales by auction were limited to premium higher-priced suburbs, but we are now seeing auctions cascade into middle and outer suburbs,” she said.

Australia’s top performing areas for auctions includes more typical areas like the eastern suburbs and inner-west of Sydney but also areas like Adelaide West and Outer-East Melbourne.

Andrew Dimashki of Harcourts Judd White is taking 2 Merrick Crescent, Glen Waverley to auction on Saturday, April 9, at noon.

In terms of ticking boxes for possible auction success, it’s already ahead of the game, he said.

“The eastern suburbs have become an auction mecca,” he said. “Sometimes there’ll be a rare occasion where we sell a house privately and people will come to us confused, asking us why it isn’t being auctioned. Buyers and sellers are very comfortable with auctions here.”

He said the three-bedroom, two-bathroom house had an American colonial style unique to the local area and due to its style, was hard to put on a price on.

“That point of difference immediately makes it suitable for auction,” he said.

SOLD - $1,412,000

2 Merrick Crescent, Glen Waverley VIC 3150

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Mr Dimashki said there was always a high demand for homes in Melbourne’s outer east – which included suburbs like Ringwood, Chadstone, Croydon, Glen Waverley, Blackwood and Burwood East – and that demand laid the perfect grounds for selling by auction.

“The competition is what fuels the auction environment,” he said. “Often it becomes more like a fight, like these bidders get completely focused on winning.

“Sometimes we finish up an auction and the buyer comes in and says ‘what did I pay?’ Because they got so absorbed in winning the competition, they did weren’t even keeping track of what they were bidding.”

There were certain properties that didn’t always suit selling by auction, he said.

“The only people who don’t like auctions are the first-home buyers who need a finance clause,” he said.

“So, there are typical first-home buyer areas where buyers are trying to stay under the $600,000 to $700,000 mark … those sorts of areas you’ll find auctions don’t work.

“The areas that are second-home buyers or investors or just affluent areas in general, we find auctions work a treat.”

3. Investment activity 

Dr Powell said because investors typically buy in a rising market, properties were more likely to sell at auction as the value of home loans to investors increases.

Justin Tongue is the owner of 2 Merrick Crescent at Glen Waverley and said despite reports the market was softening in Melbourne, there were still plenty of buyers in the eastern suburbs and houses were still “going gangbusters”.

“Even average properties are doing well at auction here, so for us , selling via auction was a no brainer,” he said.

“Around the corner the other weekend there was a knockdown that went for $300,000 above reserve – and you couldn’t live in it.

“The competitive rush and charge you get at an auction, that’s what I knew we needed in Glen Waverley.”

4. Month

The best time of the year to sell is February, the data showed, while January was the worst.

Auctioning a property during any of the other 10 months of the year would give an equal chance of success, the report found.

5. Property attributes 

Not only are houses the most likely property type to sell at auction, the research found it is specifically houses with two bedrooms and one bathroom that have the highest success rate.

Janet Hansen-Smith of Smallacombe Real Estate in Adelaide’s south is taking a three-bedroom, one-bathroom house on 836 square metres of land to auction in Mitcham, a suburb located in the Adelaide South region, on Saturday.

The property may not have two bedrooms and one bathroom but it was likely to do extremely well at auction anyway, she said.

“I think it comes down to the house, yes, but also the level of demand for that type of house in that area,” she said. “It’s a combination of all of those things.

“Lower Mitchum is generally a high performing auction suburb. Nine out of 10 properties there are auctioned, so buyers are seasoned to it. The success rate has been very high and the results have been very good and most are achieving well over their reserve price.”

SOLD - $1,050,000

43 Catherine Street, Lower Mitcham SA 5062

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She said a property’s potential capital growth was also a factor in an auction’s success.

“A house may have two bedrooms or three bedrooms but if it’s a nice street and the buyers can see there are other houses that have been extended and renovated, it gives them confidence to bid,” she said.

“This house, for instance, buyers can see evidence of similar properties in the street with extensions that go for $1.3 million to $1.8 million. It has easy access to the city, to public transport. All of that helps create that auction optimal environment.”