Pent-up buyer demand fuels a resurgence in Perth housing auctions

April 1, 2021

Pent-up buyer demand fuels a resurgence in Perth housing auctions

April 1, 2021

Perth’s booming housing market has led to a rise in the number of properties going under the hammer, with some auctions being attended by more than 100 interested viewers.

Caporn Young sales executive Michael Mort said the demand had resulted in a 100 per cent clearance rate at his agency and houses being sold well above the reserve price.

“Because of the pent-up demand, it just makes sense to bring certain properties to auction and we’ll continue to do that while we’re having this successful run,” he said.

“If a bidder is prepared – so they’re either cash or pre-approved – they don’t mind the competitive bidding because it’s very transparent.

“They can see who they’re bidding against as opposed to a private treaty, where they would be presenting an offer and then getting told they’re in a multiple offer situation and that there’s competition, but they can’t see what’s going on behind the scenes.”

Mr Mort said a house in Mount Hawthorn recently sold for $1.817 million under the hammer – a record price for an unrenovated cottage in the suburb.

“That was a property that was the first time to the market in 90 years and was a 979 square metre block in an R30 zone,” he said.

“We probably had about 120 people through it on the day.

“We had 12 registered bidders and in the end we had two young professional couples in their mid-30s slugging it out … it pushed significantly through the reserve price.”

CoreLogic research director Tim Lawless said Perth’s housing market typically shied away from auctions, but recent figures revealed a growing trend in those choosing to sell under the hammer.

“Only 1.6 per cent of Perth properties were listed as auctions sales over the past 12 months, compared with 34.7 per cent in Sydney and 28.6 per cent in Melbourne,” he said.

Auctions in Perth peaked at about 90 a week in late 2016 before experiencing a steady decline until November 2020, when the tide changed.

The number going to auction peaked at around 40 per week in December 2020 before the New Year break and Perth’s five-day COVID-19 lockdown paused the sales market.

In the week of March 21, there were 2710 auctions across Australia, with 23 registered in Perth.

The weighted average clearance rate – or houses sold at auction – was 80.9 per cent, compared to 56.9 per cent this same time last year and a 50.9 per cent clearance rate the year before.