Would selling your home at auction deliver solid return on investment?

Popular TV shows serving up the hustle and bustle of competitive buyers might have you convinced that auctions are always a safe bet, but they aren’t necessarily guaranteed to bring in the cash.  

Before you cough up auctioneer commissions (or apply for The Block), you need to be sure that an auction will deliver the highest possible return on investment for your home. 

If your property for sale has these three key features, an auction may just fetch you the best-selling price: 

When in doubt, google it.

Check the auction figures for your postcode, as properties in some capital cities do better than others. 

High-demand capitals usually attract higher auction clearance rates. For example, Sydney (57.7 %), Melbourne (68.1%) and Adelaide (63.3%) were the best performing urban hubs for the December 2017 quarter¹. This is compared to the clearance rates of cities such as Perth (39.7%) and Brisbane (46.7%), which have less of an auction culture. 

Pipped at the postcode.

Homes in prestigious, sought-after and/or well-located suburbs tend to do better at auction. Small, tightly held suburbs are more likely to attract cashed up buyers. If the market is strong, this will increase the competitiveness between those buying an investment property. 

Suburbs that are reasonably affordable and offer positive infrastructure development and employment opportunities also seem to do well under the hammer. For the December 2017 quarter, the best clearance rate from auction was in Melbourne’s Mernda (92.5%), a newly established precinct with bigger blocks and newer homes. Next best was Prospect in Adelaide (89.7%) and Queenscliff in Sydney (88.9%)². 

Size matters. 

Historically, houses sell better at auction than apartments³ , because auctions usually favour properties with unique qualities.

As apartments are usually part of larger complexes made up of similar properties, it’s easier for buyers to guess the market value. So they’re less likely to start a bidding war. 
Seeking the advice of an experienced selling agent will help you make the right choice between auction and private sale. 

While you can never fully predict how your house will sell under the hammer, checking off these three property features can certainly increase your confidence come auction day (or judging night on The Block).