Compared to other States and Territories, home auctions are less common in Western Australia. Only around 2 per cent of properties are sold using this method.
By contrast, around 23 percent of properties are auctioned in Sydney, 30 per cent in Melbourne, 11 per cent in Brisbane, 27 per cent in Adelaide, 16 per cent in Darwin and 10 per cent in Canberra. Across the nation the average number of homes sold by auction is approximately one out of every five.
The main reason behind the lesser auction culture in WA, seems to be the success of the 'Offer and Acceptance' form developed jointly between REIWA and the WA Law Society. This reliable document used for a sale by private treaty would be very familiar to most home buyers, and its simplicity is the main reason why private treaty dominates sales methods in our state.
However, the strong and fast market in Perth between 2004 and 2007 saw a renewed interest in auctions, and one which wasn't just confined to the leafy western suburbs or premium properties which has traditionally been the case.
When prices were rising so quickly during that period, it was often hard for agents to determine the right price for a property or anticipate what a purchaser might be prepared to spend, so an auction proved an ideal way to get the best price for the seller, often exceeding their expectations.
Of course, the market is no longer in that boom period. Prices are rationalising and the metropolitan median price retracted by around 3 per cent in March. However, there are still very patchy rises and falls between suburbs and regions that are unpredictable. In this unstable period, it can be advantageous to use the auction method to test the market and find the selling price people are prepared to pay.
Recent media reports have suggested many auctions are being passed-in at the fall of the hammer, recording no sale. However, this fails to appreciate that very often buyers will approach the auctioneer shortly after the auction to negotiate a sale by private treaty. Again, this seems to be part of WA's slightly different auction culture by consumers, but it still serves to attract genuine buyers and the right result for sellers.
Auctions in WA are undertaken using a code of practice for the profession following consultation by REIWA with the Australian Competition and Consumer Commission to ensure the code accords to best practice.
As a result, REIWA believes the new code of conduct lifts the benchmark for ethical auctioneering practices to the benefit of buyers, sellers and the reputation of the industry. Local auctioneers take their jobs very seriously and are keen to ensure the profession provides confidence to the buying and selling public.
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