{"id":8217,"date":"2016-06-09T10:00:18","date_gmt":"2016-06-09T00:00:18","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=8217"},"modified":"2016-06-09T10:00:18","modified_gmt":"2016-06-09T00:00:18","slug":"auction-clearance-rates-dont-rate","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/","title":{"rendered":"Auction clearance rates don&#039;t rate"},"content":{"rendered":"<p>The head of one of the country\u2019s biggest real estate groups says we have it all wrong when we use auction clearance rates as a measure of how the market is either improving or declining.\u00a0 He gives us some better indicators.<br \/>\n&nbsp;<br \/>\n<strong>Transcripts:<\/strong><br \/>\n&nbsp;<br \/>\n<b>Kevin:\u00a0 <\/b>Quite often, when we\u2019re looking at market sentiment, we look at a number of barometers but the one that seems to come up all the time is auction clearance rates. There\u2019s one school of thought that says it\u2019s not a good enough barometer on its own to measure what&#8217;s really happening with the market. This is a blog article that was recently written by Grant Harrod, who is the Chief Executive of LJ Hooker.<br \/>\nI guess, Grant, you would well and truly know whether or not it is a good measure. What\u2019s your thought behind this? Welcome to the show. Thanks for your time.<br \/>\n<b>Grant:\u00a0 <\/b>No problem; thank you. Look at the national stats around the number of properties that are sold by auctions versus private treaty, and it averages around 27%. Clearly, more than two-thirds of properties are sold outside of auctions through a private treaty arrangement.<br \/>\nIf you look at it by state, in some states, it\u2019s actually as low as less than 10%. Certainly, New South Wales and Victoria \u2013 or specifically Sydney and Melbourne \u2013 are the markets in which you tend to see auctions used a little bit more regularly, but if you move into regional locations or into other states around Australia, it\u2019s actually not a regularly used method of selling a property.<br \/>\nThe other side of this is that there are a lot of properties that probably start life in an auction process because, really, we see it as more of a method of marketing than necessarily a method of transacting a property. They\u2019ll start with an auction campaign, which has the benefit of concentrating the process into a three- to four-week period, and which obviously really benefits the vendor and the purchaser, and also the agent, as well. A number will sell before auction, and then a number will also sell after auction. Checking the clearance rate on the day is \u2013 in our view \u2013 not necessarily an indicator of the health and well-being of a particular property market.<br \/>\n<b>Kevin:\u00a0 <\/b>Just to take that thought one step further too, Grant, the day of the auction is influenced by so many factors, not the least of which is whether or not the property has a realistic expectation put on it by the seller, which is a direct reflection sometimes on the activities of the agent, how well the agent has been educating the seller, ready for them to meet the market.<br \/>\n<b>Grant:\u00a0 <\/b>Correct. I\u2019d also extend that to suggest the vendor, as well. You can imagine in a market like we\u2019re in at the moment, where you do have a number of real estate markets that are coming off a high point, managing the expectation of the vendor is quite challenging.<br \/>\nThey\u2019ve probably been considering selling their property for quite some time. They\u2019ve been tracking the market, they\u2019ve seen the home down the road go for a particular number, and they\u2019ve decided, \u201cThat\u2019s my price. I\u2019m going to put my property on the market.\u201d Of course, the markets are moving around quite a fair bit at the moment, and therefore, that may not necessarily be what the purchasers are prepared to pay for that market.<br \/>\nAn auction process is valuable in the extent that it gives both the buyer and the seller a very clear visibility<b> <\/b>to what the market is prepared to pay. But more often, from an agent\u2019s perspective, it\u2019s actually managing the vendor \u2013 the seller\u2019s expectation \u2013 that is the critical part.<br \/>\n<b>Kevin:\u00a0 <\/b>Given that we can\u2019t rely on those auction clearance rates as a barometer for the market, as you so clearly pointed out, what are some of the indicators that you would suggest consumers should be looking at to gauge where the market\u2019s at?<br \/>\n<b>Grant:\u00a0 <\/b>I think one of the most <b>[4:08 inaudible]<\/b> measures is time on market. As an example, in the Sydney market and certainly in some of the markets that are the closest to the CBD, we\u2019re seeing a very short time on market. There\u2019s a lot of buyer demand. There\u2019s a shortage of listings. So when properties are coming on market\u2026 And some are actually being sold before they come on market. Agents are reaching out to their databases in advance of actually starting the marketing campaign for the property and in many situations, selling it before a campaign has even been undertaken.<br \/>\nBut contrast that to, say, Perth. The average time on market in Sydney could be as low as 20 days. Then you go to Perth, and the average time on market there now is 60 days, if not heading now towards 70, even 80 days, where you obviously have a lot of listings, a lot of stock, but not enough buyers. For us, one of the key measures of the state of a real estate market is what is the average time on market for properties?<br \/>\n<b>Kevin:\u00a0 <\/b>Great advice, Grant. I really appreciate your time and your insight there. Grant Harrod, who is the Chief Executive of LJ Hooker.<br \/>\nGrant, thank you very much for your time.<br \/>\n<b>Grant:\u00a0 <\/b>Thank you.<br \/>\n&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The head of one of the country\u2019s biggest real estate groups says we have it all wrong when we use auction clearance rates as a measure of how the market is either improving or declining.\u00a0 He gives us some better indicators. &nbsp; Transcripts: &nbsp; Kevin:\u00a0&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":8200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,11,13,36,22],"tags":[101],"class_list":["post-8217","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Auction clearance rates don&#039;t rate - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Auction clearance rates don&#039;t rate - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"The head of one of the country\u2019s biggest real estate groups says we have it all wrong when we use auction clearance rates as a measure of how the market is either improving or declining.\u00a0 He gives us some better indicators. &nbsp; Transcripts: &nbsp; Kevin:\u00a0...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2016-06-09T00:00:18+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"Auction clearance rates don&#039;t rate\",\"datePublished\":\"2016-06-09T00:00:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/\"},\"wordCount\":915,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"podcast\"],\"articleSection\":[\"Buying a property\",\"Kevin's Update\",\"Latest Stories\",\"Property Investment\",\"Research\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/\",\"name\":\"Auction clearance rates don&#039;t rate - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2016-06-09T00:00:18+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/auction-clearance-rates-dont-rate\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Auction clearance rates don&#039;t rate\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. Anywhere, Anytime.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\",\"name\":\"rolanrush\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g\",\"caption\":\"rolanrush\"},\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/author\\\/rolanrush\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Auction clearance rates don&#039;t rate - Realty Talk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/","og_locale":"en_US","og_type":"article","og_title":"Auction clearance rates don&#039;t rate - Realty Talk","og_description":"The head of one of the country\u2019s biggest real estate groups says we have it all wrong when we use auction clearance rates as a measure of how the market is either improving or declining.\u00a0 He gives us some better indicators. &nbsp; Transcripts: &nbsp; Kevin:\u00a0...","og_url":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/","og_site_name":"Realty Talk","article_published_time":"2016-06-09T00:00:18+00:00","author":"rolanrush","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rolanrush","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#article","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/"},"author":{"name":"rolanrush","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"headline":"Auction clearance rates don&#039;t rate","datePublished":"2016-06-09T00:00:18+00:00","mainEntityOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/"},"wordCount":915,"commentCount":0,"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#primaryimage"},"thumbnailUrl":"","keywords":["podcast"],"articleSection":["Buying a property","Kevin's Update","Latest Stories","Property Investment","Research"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/","url":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/","name":"Auction clearance rates don&#039;t rate - Realty Talk","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#primaryimage"},"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#primaryimage"},"thumbnailUrl":"","datePublished":"2016-06-09T00:00:18+00:00","author":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d"},"breadcrumb":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/channels.realty.com.au\/realtytalk\/auction-clearance-rates-dont-rate\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/channels.realty.com.au\/realtytalk\/"},{"@type":"ListItem","position":2,"name":"Auction clearance rates don&#039;t rate"}]},{"@type":"WebSite","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website","url":"https:\/\/channels.realty.com.au\/realtytalk\/","name":"Realty Talk","description":"Your Trusted Voice For Property Investing. Anywhere, Anytime.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/channels.realty.com.au\/realtytalk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/384a57ac9e52cb9bf19896cb15eaa52d","name":"rolanrush","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/86544778804295a7fa45cbde097dc3a58a45ba6ed28859f17059ca74c38723d2?s=96&d=mm&r=g","caption":"rolanrush"},"url":"https:\/\/channels.realty.com.au\/realtytalk\/author\/rolanrush\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/8217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/users\/176692471"}],"replies":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/comments?post=8217"}],"version-history":[{"count":0,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/8217\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/media?parent=8217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/categories?post=8217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/tags?post=8217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}