With nearly double the number of properties selling privately, auctions are indeed facing challenges in the Melbourne real estate market.

Whilst the clearance rate is holding steady at 76% it gives a false sense of success, with there being many reasons properties are failing to sell at auction.

However, it’s important to note that auctions still remain a popular and effective method for selling property in certain markets and circumstances.

Yes, vendors in Victoria are cancelling home auctions due to a lack of interest in the property but there are many reasons as shown below:
– The property fails to meet the reserve price, leading to it being “passed in” or withdrawn from the auction.
– The vendor accepts a pre-auction offer.
– The vendor decides to sell the property through private sale instead.
– The auctioneer withdraws the property from sale during the auction itself.
– The agent and the vendor realise that the property has no chance of success at auction and is withdrawn to save a failed campaign.

Here are some points that highlight the struggles auctions are experiencing:

– Decreased demand: With more sellers opting for private sales, auctions are seeing fewer listings and less demand.
– Reduced competition: Fewer bidders at auctions means less competition, leading to lower sale prices and reduced agent commissions.
– Shift in market dynamics: The rise of private sales is changing the way people buy and sell property, making auctions less relevant for some sellers.
– Changing seller preferences: Sellers are increasingly preferring private sales for their convenience, flexibility, and potential cost savings.
– Agents adapting strategies: Real estate agents are adjusting their marketing strategies to accommodate the shift towards private sales.

To conclude we are in a changing market where some sectors are doing well but others are struggling, we do not have a property market that moves as one in unison but a multi faceted market much like the share market.

The difference is that the share market has low entry and exit costs and time frames whereas the property market has high levels of impediment to entry and exit.