House auction premiums shrink as buyer competition weakens
Auction premiums in Melbourne and Sydney have halved from 2021-22 peaks, dropping to 8.9 per cent and 8.1 per cent.
Sellers who choose to go to auction still typically do better than those who accept an offer beforehand, but the advantage has narrowed sharply. Melbourne sellers gain an 8.9 per cent premium over the highest offer before auction, while Sydney sellers gain 8.1 per cent, according to Ray White data.
Previously, Melbourne had reached 13.3 per cent and Sydney about 11.5 per cent. The gap has closed because fewer buyers are competing for homes as the market grapples with rate hikes and a cost of living crisis.
Clearance rates have also fallen: Sydney's preliminary rate was 43 per cent last week, Melbourne's 54 per cent. Experts say auctions still move homes faster, even when they fail to sell on the day, helping avoid the risk of prolonged listings that erode value.
- 8.9 per cent
- Melbourne premium
- 8.1 per cent
- Sydney premium
- 13.3 per cent in October 2021
- Melbourne peak
- 11.5 per cent in February 2022
- Sydney peak
Why it mattersSellers need to decide whether the auction route is worth the risk when buyer competition is thin and accepting an early offer may be safer.
AustraliaAustralian property sellers are reassessing their selling strategy as auction advantages dwindle in a weakening market.
✓ Claims checked against the source and corrected before publish. checked 3 h ago
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