Newcastle property demand sky high

SO-CALLED ‘‘silent’’ or off-market sales and private treaty methods of marketing have dominated the Newcastle property market over the past 12 months.
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But the perfect storm of low interest rates, a shortage of stock and pent-up demand has also seen sheer buyer numbers regularly outstripping properties available for sale.

Yesterday, Australian Property Monitors reported 10 properties across The Hunter that were scheduled to go under the hammer last weekend.

Of those 10, seven were sold – four prior to auction and three on auction day.

That’s a very healthy clearance rate of 70per cent, and on par with booming Sydney.

With such a high auction success rate should Newcastle vendors be selling via private treaty or even prior to auction?

Recently awarded 2013 Auctioneer of the Year at the Australian Real Estate Awards, Damien Cooley said that despite popular opinion to the contrary, he believes auctions are not just for properties at the top end of the market.

He said the real benefit of auction is that it creates urgency for everyone involved in the transaction to make a decision by a certain date.

‘‘Owners often fear they are going to undersell their house. ‘‘What auctions do is gives a pool of buyers an opportunity to inspect the property, make a decision of whether they want to buy it and [through the buyer] feedback provide vendors with an opportunity to understand what their home is worth.’’

He said particularly in the top end of the market where real estate is often an emotional purchase, the buyer may pay even more for a property they love, than someone who is not an emotional purchaser.

He said auctions give the vendor an opportunity to create a competitive environment where buyers will pay a premium for their home.

‘‘For the buyer, the benefit is the vendor has four weeks to understand what the home is worth; they may find a vendor who needs to sell and they can pick up a good buy.’’

He said more importantly at auction as opposed to EOI campaigns or express sales, the buyer can see who they are competing against and knows the vendor is genuinely on the market to sell.

Auctioneer Damien Cooley sees advantages in auctions over private treaty sales.

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