Hold fire or head to auction? It’s the big-money question

There’s no doubt the market is the strongest it’s been in years, as is buyer enthusiasmn

With Melbourne and Sydney prices screeching ahead the tough question for would-be vendors is whether to sell before Christmas or hope for an even better price by hanging on until next year.

They must take into account Friday’s data revealing prices jumped nearly 3 per cent nationally in October compared with June.

There’s no doubt the market is the strongest it’s been in years, as is buyer enthusiasm. Listings are at near-peak levels, with 1400 properties going under the hammer in Melbourne a week ago and 640 in Sydney. Both cities exhibited boom-time auction clearance rates of 80 per cent and 78 per cent respectively.

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And there’s plenty of stories of properties selling well above reserve: in Sydney’s Greenwich a sprawling house converted into two apartments and due to be auctioned on November 16 sold on Thursday for $2.8m. The reserve was $2.2m.

In all likelihood Sydney and Melbourne prices won’t peak for another six months.

But when that happens what energy will there be left to drive the market given the interest rate cycle will have bottomed?

Perhaps property economist Andrew Wilson should have the final word: Most sellers are buyers and most buyers are sellers, he says.

“There’s plenty of buyers out there and lots of competition. You will not get a stronger clearance rate or price growth. It’s a very good market if you are a seller in Melbourne and Sydney.”

As for the other capitals, don’t expect the same growth because they are at their price peaks and are not exhibiting the same catch-up energy as Sydney and Melbourne.