Most buyers believe that auction clearance rates reflect the overall performance of the market. But Starr Partners CEO Douglas Driscoll warns that these should not be the sole barometer for overall market conditions.
“Rather than just using auction clearance rates as a barometer, I urge Australians to consider other metrics such as the average days on the market and/or the price achieved as a percentage of the asking price,” said Driscoll.
He also offers the following three tips to determine market performance:
- Review the duration spent by properties on the market. When properties sell faster, it reflects a positive movement in the market. Likewise, the longer duration spent by properties on the market means the market is slowing down. Driscoll advises buyers to monitor how long properties stay on the market. It will also help to talk to local real estate agents regarding the performance of the market.
- Compare sold properties’ asking and selling price. Using a percentage ratio between the price achieved for a property and its actual selling price is an effective way to get an accurate picture of the market’s performance. For instance, if a property is listed for $550,000, but it sells for $520,000, the buyer achieved a discount of just over 5%. Driscoll recommends signing up for email newsletters detailing new listings and recent sales with price achieved. Another tip is to use free online tools that allow customers to track property history.
- Look at all the property facts. Looking at the bigger picture allows you to make an accurate market prognosis. Driscoll tells consumers to take approximately 10% off the reported clearance rates, as this provides a more realistic picture of the broader market. The Cooley Index by Cooley Auctions is also a great resource as it gives more information other than the auction clearance rate.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out