“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.