Tuesday, January 21, 2014

Are Auctions A Good Way to Sell Property?

From a recent RP Data submission to the Queensland Government:

We conducted some analysis of auction sales in each of these two States for the period 1 October 2012 to 30 September 2013 in order to ascertain whether or not there were any material differences in terms of outcomes between the states. For each of the auction sales in the respective states during that period, we compared the sale price with RP Data’s estimate of the subject property’s market value at the sale date, derived from our automated valuation model (“AVM ”) and utilising only those AVM estimates we deemed reliable. The percentages in the table below demonstrate, by relevant price band, the extent to which the sales price exceeds our estimate of market value. For example, for all properties sold for less than $500,000 in Queensland during this period, only 14.9% of homes were sold for a price we consider to be higher than the estimated market value of the property at that time, with the remaining 85.1% of properties sold at or below our estimated market value.

No comments: