Whether a property is likely to be auctioned or not depends largely on its geographic location, the type of dwelling and the price points. The trend towards higher auction sales has been picking up pace since the middle of 2012. This overlaps with the beginning of the current growth phase in the property market.
2015 was a year of strong growth. This coincided with a high percentage of homes being sold at auction, approximately 19.2% of all dwelling sales (till the month of September). In phases of strong housing market conditions, auctions are a popular way to sell a residential property. Market demand is high and buyers are competitive which leads to the auction process providing the best possible prices on property deals.
This year, Australia’s auction market started off with a slow pace till the first week of February. Only 281 auctions were held across Australia compared to 419 during the corresponding period last year. However, the auction market is gathering momentum but is expected to remain behind the numbers last year. Read on to find out which residential areas are set to have the highest number of auctions this year.
Melbourne’s Largest Suburb
Melbourne in the state of Victoria, has traditionally seen the largest fraction of homes sold by auction. In the previous year till September, 32% of houses and 28% of units were sold at auction in Melbourne. The Victorian capital still rules the roost as in the list of the top suburbs with the highest number of auction recorded from October 2015 to January 2016, the top ten are from Melbourne.
Twelve kilometers north of Melbourne’s Central Business District, Reservoir is the largest suburb in Melbourne. It ranks first with a total of 205 auctions recorded during the same period. Out of them 60% were sold at auction. The auction market in Reservoir has been going strong in the recent past. More number of sellers are opting for an auction as a competitive method to sell their home.
People who are finding the popular inner northern suburbs like Thornbury and Preston too expensive are turning to Reservoir. A large diversity of buyers consisting of young professionals and families to investors are finding good value for money in the suburb.
Reservoir has more than 10,000 homes consisting of family homes on large blocks and modern, geometric townhouses and units. Also, the suburb has a diverse portfolio of homes ranging from the affordable $200,000 price range to million dollar homes.
Next in the list of Melbourne suburbs with the highest number of auctions is Mount Waverley. It has the second highest number with a total of 188 auctions from October 2015 to January 2016.
The suburb boasts of advantages similar to that of Reservoir. With a diverse portfolio in terms of both housing and people, Mount Waverley is family-friendly with a mix of older couples, families and young people staying independently. Facilities like schools, parks, golf courses, markets and good road access are in abundance.
Mount Waverley is a hub for the overseas buyer and median house price is high. Because of its growing popularity, median house prices have jumped from $1 million to $1.27 million. The suburb has been in demand for the lifestyle purchaser because of a good mix of modern amenities and a lush green belt.
Mount Waverley has turned out to be a lucrative market not just for foreign buyers but also for investors and buyers within Australia. They are recognizing the short and long term benefits of buying in the popular Melbourne suburb. Investors from Armadale, Kew and Hawthorn are flocking towards the area as they can see potential in the area.
Medium to large property developers are getting attracted towards the suburb. New homes, apartments and townhouses are coming up in Mount Waverley. Mount Waverley is middle-class in essence and provides all the necessary facilities for that section of the market.
Experts believe that in 2016, most properties listed will go to auction. The market is brimming with bidders and the demand is high.
Other Suburbs In Melbourne
Having looked at two of the top ten suburbs with the highest number of auctions during October 2015 to January 2016, let’s see which ones occupy the remaining eight positions. Next in the list, we have Glen Waverley with 177 auctions.
Glen Waverley is followed by Preston with 126 auctions, St. Kilda with 123, Craigieburn with 121, Balwyn North with 119, Richmond with 115, Brighton with 110 and finally Northcote with 109.
Rest of the Australian States
As we saw, the highest number of auctions is undoubtedly in the state of Victoria. Suburbs in New South Wales also saw a good number of auctions between the same time period and seem to have a lot of potential for auction sales in 2016. The suburb of Mosman saw a total of 97 auctions, Randwick saw 94 and Blacktown 82.
Queensland is the second-largest and the third most populous Australian state. The suburbs of Paddington, Calamvale and Sunnybank in Queensland saw a total of 32, 20 and 27 auctions respectively.
South Australia, on the other hand, witnessed the highest number of auctions in Prospect, Adelaide and Parkside with 22, 20 and 16 auctions respectively.
Over To You
Auctions are typically applied to properties with a higher price. Last year, almost half of the houses sold by auction were closed at a million dollars. The type of the property is also a big deciding factor for it to go under the hammer. It has been observed that houses are more likely to be sold than units at auctions.
The real estate market set to slow down in 2016 as against an aggressive market in 2015. As growth slows, the proportion of properties going under the hammer will also slow down as most sellers will choose to sell their properties by private treaty.