Clearing Up the Numbers
Wednesday 08 Feb 2017
It is only February and already widely differing opinions, statistics and headlines are being presented around the prospects for the year ahead in terms of the residential property market. It seems clear to me that the market looks set for another strong year with good numbers of listings being met by equally strong demand. But I do want to sound a warning to those who monitor the endless market commentary.
Don’t get me wrong I think it’s very healthy for potential buyers, investors and homeowners to read and watch commentary on the market. I certainly read it all but I do get frustrated by the endless fascination with rises and falls in the auction clearance rate.
It is undoubtedly an interesting measure of activity. And I get that it’s an easy, quick figure to compile, to feed the news cycle and our insatiable appetite for commentary on the market. But it doesn’t tell the whole story and therefore shouldn’t be taken as the definitive market measure.
Let me explain. Our team believe very strongly in the value of an auction campaign to drive demand and secure the best possible price for a property. But it doesn’t always deliver a result on the day and that’s where the auction clearance rate statistic can be distorted. Many times an auction will mark the start of negotiations that may continue for several days or even weeks before the final deal is done.
It is a line in the sand but not one on which we should build an opinion about the health of the market. We are certainly excited to have a calendar of auctions lined up over the coming weeks and anticipate strong results but my opinion on the health of the market is already based on the strength of buyer enquiries fielded by our team and the dramatic increase in listing enquiries we are receiving.
Those factors indicate to me that there is a healthy appetite for residential property that will not be easily satisfied so there is no need to panic if the clearance rate ebbs and flows a little over the coming months.