Why are QLD/SEQ/Brisbane Auction Clearance Rates so low compared to the rest of the nation?

Maybe look at the properties that do sell,there seems to be small market within markets in small inner southside pockets from west end out too rocklea,some of the opportunities that are now up for auction over the next month 2 months that the titles have been held for over 40 years ..

 

But why are smaller places like Canberra, Perth and Adelaide having better clearance rates/auction results despite having net less auctions altogether?

Did the people in Melbourne and Sydney forget to teach Brisbanites how to bid at auction whilst spreading the gospel elsewhere?

 

I feel like you're very close to the biggest reason here. Sure, Melbourne and Sydney are very seller markets with less picky ie (seller friendly) contracts. But what I don't get is why other buyer friendly contract areas like Perth and Adelaide are doing better than Brisbane though?

 

Probably yes. much more than that..
Sure part of it may be as per above rpi posts, but also part of it is cultural ie...they would rather mull it over before pulling the trigger hence not much auction activity and more private treaty.
And thr market supports that with choice in Brisbane...it's not like there is so little choice there is fomo.
This gives a false impression that there is no Money up here...just that they don't part with it quickly nor easily.

 

I dunno...?i would beg to differ and say they are smarter and treating auctions the way they should be.....

I can gurantee that many auctions in Sydney the peol,e bidding are clueless many times.....like not understanding unconditional . ...no checks on building or strata or for pests or outgoing costs etc.......great for the vendors though......pass off almost anything in recent times.

 

Again, you're not getting FOMO in Perth or Adelaide or Canberra, plenty of choice in those areas too..?

It feels like QLD Culture is the only thing that could best explain it then?

 

I believe thats what it is....the culture.

The law is clear, an agent must act in the best interest of the vendor, and my view an unconditional cash contract where competition has taken place in the form of an auction to extract highest price which gives the vender an opportunity to sell and move on with their life is the best outcome for any homeowner, however the demand must be there.

Private treaty favours the buyer because they can pull out using either finance or pest and building if they change their mind, its an anxious period for a vender from contract signing date until U/C.
Buyers use private treaty to play one vender off against the other which consequently drives prices down. I get annoyed when I hear an agent has a property under contract within 48hrs of sining up a listing. Could they honestly say they have extracted the best price or are they thinking of their commissions.

 

Yep, its really common to do offers with subject to finance and/or building pest in QLD I guess, but they aren't as common down south I hear.

 

Well, in NSW, not once did I buy by private treaty and not have finance & B&P as a condition, you also get 5 day cooling off now.

 

though you do lose money during the 5 day cooling off period

 

My Sydney unit buyer bought with the 5 days cooling off and didn't seem to use a pest and building or finance clause. Hope it works out for him because it was only when the cooling off finished that I got a phone call from the agent saying they need a valuer to go through. In any case I have a letter from the agency that the contracts have exchanged unconditionally and that the 10% has been paid...

I guess it depends on the strength of the market and the confidence of the buyer? My agent said there was another group interested but they weren't finance ready. And another group put forward a decent offer but they didn't offer quite as much.

When we bought our stone home we couldn't have finance assessed by a certain lender until we had a contract in place, I guess it might have been a condition of that lender. Very weird. But the vendor wasn't keen to sign a contract without a definite sale.
Chicken and egg. In the end we went with a different lender anyway.

 

nothing to do with culture IMHO and more to do with other factors that affect demand and supply.

reasons i can think of for low auction clearance
1) As mentioned, buyers like to put in B&P to look for termites and other pests. This is termite country after all. Bug infestations are much more common.

2) There's just not that much buyer frenzy except in the more expensive suburbs.

3) Not many Chinese investors who just bid to win whatever the price -> they are all bunched up in sunnybank and surrounds. Pretty sure overseas investors prefer to invest in Gold Coast market, as that is where they usually visit first as tourist.

4) as mentioned, a lot of options for buyers, no point fighting it out at auctions.. (you can still get a nice 1 acre block for $400k today to build on, within 20kms of the city, of course there might be some trees and possums you have to clear out first)

5) QLD economy and employment is below national average except for Brisbane inner city.

6) Some auctions are a PITA to attend, they have them at an auction house somewhere in the city rather than on site.

7) It rains much more frequently here. And when it rains it can pour. Even the weather is against auctions.

8) oh and in the warmer months we have an abundance of midges / mozzies and flies which might cause you to accidentally do a bid when you raise your hand to swat them off your nose.

 

Hands up those who do/have done this?

Both my hands are up .

That is exactly why I like private treaty sales. I have bought a number of properties over the years (none at auction) and only ever sold one property (via private treaty).

I believe different skills are required when buying at private treaty vs auction. The major skill for private treaty is negotiation; the major skill for auction is strategy.

 

I don't even bother attending auctions anymore. it makes sense for the $1.5m+ stuff ($$$ for Bris) which are really "the market will decide" type properties, but every auction I've been to in Bris other than the top end stuff for a giggle has fitted into one of the following categories

• Something is wrong with it... E.g. one I put an offer in on pending B&P came back with termite damage + they'd just painted over mould in the bathroom rather than actually fixing the issue.. Obviously I did not proceed, it went to auction and sold to a southerner
• The owners are clowns who want way more than market rate and are praying someone gets emotional
• There are blatant dummy bidders

 

No, never once lost money.

You see, the difference is, you do not offer on what you will not be buying, where the QLD system has people playing games as there is no penalty.

You choose a place, and would only pull out if it had bad problems and vendor would not come to the party to rectify or negotiate over, or finance really was not possible.

The other way to do it, and I have done this too, is agree with the agent/vendor to do all checks before going to contract.

 

Gockie you sign the contract or give a unsigned contract, just do not "exchange", or you negotiate a longer cooling off.

 

The OP would say most if not all of these also apply to Adelaide and Perth..yet both of them have consistently higher auction clearance rates.

 

well then i guess only someone who has had experience in all three real estate markets will be able to answer OPs question.

I have only been to auctions in Sydney and Brisbane so cant really say for sure what differences there are in Perth and Adelaide.

Could be also the REAs suggesting auctions when the vendors expectations are too high to educate them on the market value.

Could also be how we have to put in written offers when making offer rather than verbals which auction doesnt provide for, so not so popular here.

very interesting question from OP though.

 

Its all relevant.....I use the safety net of conditions in my own negotiations. I recently discounted my own IP 10k for the buyer to waive the cooling off, P&B & finance......So it was a cash U/C upon signing on that dotted line.......next.....