The upcoming spring sales season is expected to be one of the most competitive moments for property buying in recent memory.
After a period of high interest rates because of the post-Covid spike in inflation, we have seen the interest rate fall from a high of 4.35% in February to its current level of 3.6%.
The Reserve Bank of Australia (RBA) has made three cuts of 0.25% and has hinted that it will make at least one more reduction before the end of the year.
Consumer confidence has increased as a result, according to one survey from Westpac Bank.
Adding to the positive market mood is the RBA’s prediction that the nation’s economic growth rate will be a relatively healthy 3.3%.
The market is also benefiting from the fact there are more buyers than properties available to purchase. Researcher Cotality (formerly CoreLogic) says that the number of homes for sale currently is 19% below the five-year average.
In this environment, buyers can expect some hot competition at auctions. We’re already seeing the signs of this. Auction clearance rates in July and August surpassed the 75% threshold on some weekends.
Auctions have once again become fast-paced, high-stakes events, and they remain a popular way to sell property, especially in Sydney and Melbourne, the biggest property markets.
Mastering the art of bidding can be the key to securing your next dream home.
Here are 10 strategic tips to win the deal:
Research the market – Become expert in your target markets. Attend as many open homes and auctions as possible to discover price trends and bidding patterns.
Watch the agent – Pay attention to the agent’s style and the typical price range they operate in. This research is invaluable for setting a realistic budget.
Stick to a budget – Emotional bidding is the biggest mistake at auctions. Before the day, decide on your maximum price. Write it down. It should include all potential costs and leave you with a comfortable financial position.
Arrive early – Get to the auction at least 20 minutes early and register as a bidder. Then, find a strategic position from which you want to bid. Make sure you can see the auctioneer and have a good view of other bidders.
Bid with confidence – Make your intentions clear. A firm nod, a raised hand or a clear verbal bid projects confidence and authority. Don’t hesitate or look uncertain. A strong, confident bid can unsettle other buyers.
Step up – Don’t be afraid to start the bidding when others hold back. You’ll set the tone but be prepared to be the focus of everyone’s attention.
Bidding increments – The auctioneer will try to set the bidding increments. While these can change on the fly, a strategy for your bidding is important. Small, consistent amounts show confidence and patience. Large, decisive bids can intimidate competitors and end the auction swiftly.
“On the Market” – The auctioneer will announce when the property is “on the market”. This means the reserve price has been met. Before this point, all bids are subject to the vendor’s approval. At this stage, you’ll know any successful bid will buy the property.
It’s not about winning – A successful auction strategy isn’t about winning but buying within your budget. If the bidding goes too high, walk away. There will be other properties. Sticking to your plan is your victory.