Sydney auction sales are at their highest levels as sellers look to cash in

MORE property sellers than ever before are choosing to take their homes to auction, as they hope to cash in on an iron clad Sydney housing market.

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MORE property sellers than ever before are choosing to take their homes to auction, as they hope to cash in on an iron clad Sydney housing market and intense competition between desperate buyers. Looking at some of the results for the year, it's not hard to see why, with homes across all markets delivering huge results.

A recent RP Data analysis of the number of properties sold over the first quarter of 2013 revealed a sharp rise in the percentage of auction sales.

"For that first quarter in Sydney, auction sales were responsible for 16.1 per cent of all properties sold," said Cameron Kusher, RP Data senior research analyst. "In 2011, when the market was much weaker, the figure was 12.8 per cent. In 2012, it was 13.4 per cent and even when the market was quite a bit stronger in 2010, the number was 14.7 per cent."

The lack of properties on the market means a good result is more likely than ever.

"When the housing market is seeing value growth, people are more inclined to go to auction," said Mr Kusher. "People feel it's the best way to get the highest price. When the market is not as hot, the sensible thing is to sell by private treaty."

The rise in percentage of auction sales coincided with a stark improvement in clearance rates, indicating sellers were spurred on by the success of others.

"Clearance rates have been up around 80 per cent for a couple of months now and they haven't been at those levels for four years," Mr Kusher said. "If you've got an 80 per cent chance of selling your property and are serious about selling, auctions become an attractive option."

Some may be surprised that the percentage wasn't higher in general, but Sydney was second only to Melbourne (25.2 per cent). The other capitals were below 10 per cent.

"People forget about the less glamorous areas of the city where auctions aren't taking place," said Mr Kusher. "It's not as common in western or south-western Sydney, as it is in the eastern suburbs or inner west."

This is changing, according to Laing + Simmons Granville agent Ray Fayad, who has recently noticed more auction activity.

"We have seen a big shift in the last 12 months across Parramatta, Granville and Auburn," he said. "Auctions have just about overtaken private treaties as a method of sale."

Mr Fayad said owners are overcoming an initial reluctance to go to auction, when they see that the return can far outweigh the cost.

"Going to auction can cost between $1300 and $1500 extra, depending on the campaign," Mr Fayad said. "A couple of weeks ago, I sold a house in Lidcombe for $108,000 above reserve. The best private indication we had beforehand was $450,000 and it sold for $558,000. The owners would have been kicking themselves if they sold private treaty."

Some predicted winter would stall the auction market, but it barely skipped a beat.

"Winter is one of the better times to sell at auction because there's less stock on the market, but the buyer demand is still there," said Stevan Vuk-Luboya of Devine Real Estate.

Mr Vuk-Luboya has seen auctions grow in popularity around Concord, which has been benefiting for the last decade from the outwards spread of the inner west.

Big results in 2013

148 Devonshire St, Surry Hills - Four-bedroom terrace, reserve set at $1.06 million, Sold for $1.355 million, by Belle Property Surry Hills

15 Allan St, Lidcombe - Two-bedroom house, reserve set at $450,000, sold for $558,000, by Laing + Simmons Auburn

36 Bold St, Cabramatta West - Five-bedroom house, reserve set at $1.1 million, sold for $1.205 million, by Laing + Simmons Cabramatta

125 Darcy Rd, Wentworthville - Four-bedroom house, reserve set at $900,000, sold for $1.111 million, by Laing + Simmons Parramatta