2025 sees auctions overtaking private sales in property market surge

Recent data from REIWA indicates a notable shift in the property market, predicting a resurgence in the popularity of auctions for 2025.

Despite the rapid property sales rates of recent years, where many sellers opted for direct, private treaty sales due to their quick turnaround, auctions are poised to make a significant comeback.

Auctions vs. private treaty

Historically, auctions have demonstrated efficiency in the sales process.

Before the pandemic, properties typically took 51 days to sell on the open market but moved significantly faster at auction, taking just 29 days. The trend accelerated in 2024, with private treaty sales closing in just 10 days, while auction sales lagged slightly at 18 days.

However, by December, the gap narrowed with auctions taking only 17 days compared to 16 days for private treaties. This emerging pattern suggests that by late 2025, auctions might outpace private treaty sales as the preferred selling method.

Advantages for sellers

According to REIWA, auctions are not just about speed; they also offer potential for higher sale prices. This method creates a competitive atmosphere that can push the price closer to the property’s true market value.

Sellers benefit from the dynamic environment where motivated buyers escalate their bids in real time.

Control and flexibility in selling

Auctions provide sellers with enhanced control over the sale terms, such as settlement dates and deposit amounts. This control helps sellers steer the negotiations more effectively, free from the common delays related to buyer financing or inspections that can occur with private treaties.

Opportunities to secure a property sale

According to REIWA, auctions uniquely offer three opportunities to sell:

• Before the auction: Sellers can accept compelling pre-auction offers to sidestep competition.
• During the auction: The energetic bidding often concludes with a sale under the hammer, ensuring a definite transaction.
• Post-auction: If the property does not sell during the auction, sellers have the leverage to negotiate directly with interested parties, establishing a clear baseline for discussions.

Enhanced transparency and certainty

One of the primary benefits of auctions is the transparency they provide.

Buyers know what others are offering, which builds trust in the process. For sellers, this means a better assurance of receiving a fair market value.

Furthermore, as auctions typically conclude with unconditional sales, they eliminate the risk associated with buyers who might pull out due to financing or other contingencies, REIWA reported.

Auction activity cools, data shows

The REIWA report contrasts with recent findings from CoreLogic, which pointed to a possible slowdown in the broader market, following a noticeable decrease in both auction levels and clearance rates across the country.

In the week of Jan. 26, there were just 440 auctions in the combined capital cities, showing a decline from the previous year’s 476, while the clearance rate also dipped to 64.5% from 67.2%. This slowdown reflects higher-for-longer interest rates and flatlining property prices, influencing sellers to delay selling, hoping for better offers.

Read the REIWA article here.