The much-reported auction clearance rates are often taken as an indication of the health, or lack thereof, of the property market, with many (incorrectly) assuming that a low auction clearance rate indicates a weak market and a high clearance rate means the market is galloping away.
In Townsville the auction market is best described as steady. It’s a type of sale that many don’t fully understand and this is probably why more people don’t choose auction when they decide to take their property to market. But when it’s done well, it can be a very successful way to sell.
We saw that recently with the North Ward property, 9 Cleveland Terrace, which sold for $1.825m by auction. It was a great result and an excellent demonstration of how powerful auctions can be, no matter what type of market it is.
Auctions are highly visible in the market so you can get an immediate feeling on how a market is performing by attending auctions and seeing up close what is selling and what is not.
In Townsville while auctions are a very popular method of sale obtaining broad market statistics on clearance rates is impossible as there aren’t any direct sources that collate the data. I think if you are considering that method of sale when selling your home the best approach would be to read the local papers and see which agents/agencies adopt this approach and go and visit some auctions yourself.
The good thing about auctions are they are very transparent and you can get a very clear feeling on the success of an auction by the number of bids, and if the property sells under the hammer or passes in.
If you are buying you can also see what prices are being achieved for certain types of properties and with the result unfolding right there in front of you, as a buyer you can begin to track the results for yourself and get a handle on the clearance rate as a percentage of overall sales.
In my experience, given Townsville is a regional market, the percentage of properties cleared at auction is usually far lower than that of markets in major capital cities such as Sydney and Melbourne.
Don’t take this as a sign of auctions not working in the market. It has much more to do with the fact that in Sydney and Melbourne the majority of sales are conducted in this manner and therefore their markets are naturally conditioned to buying and selling in this manner.
Don’t fear the auction. Whether you are buying or selling in Townsville there are major benefits to actively seeking out auction and you should ask your agent about the merits of auction for your property.