Newsletter Century 21 Auction Clearance Rates in Port Douglas

During the past 18months, Century 21 has held 10 Auctions with eight properties being sold under the hammer, the other two being sold within a week after the auction.

Auctions do set a “sense of urgency” to attain a result, as does the “tender process”.

This deadline concept is beneficial to the seller as they can organise financial affairs etc around the hopeful result being achieved at the auction or soon thereafter.

In a small community like Port Douglas we need to ask ourselves a few questions when we promote an auction.

Questions like:

1. Where will our buyers of the subject property come from?  (Locals, visitors or people/investors who are absentee, but interested?)

2. Is the property truly one that is in demand and will create interest among potential buyers? (Or is it one of many similar properties available?)

3. Is the owner aware of the true value of this property in the present market conditions? Has the owner been given a comparative market analysis to reveal the possible and achievable price, if an auction is held? Has the owner considered paying for a valuation to ascertain where a Valuer places the property’s value in the present market?

4. Have you considered the costs involved in marketing the property in the period leading up to the auction day, the auctioneer’s fee and marketing costs after the auction if a result has not been achieved.

5. Will absentee buyers participate by being “phone bidders” or will they actually fly to F.N.Q to participate first hand at the auction?

6. Have you studied the results of Auctions being held and promoted by each of the Agencies in Port Douglas?  Century 21 Port Douglas Real Estate, LJ Hooker Port Douglas,  Ray White Port Douglas and the Mcgrath agencies have been active in promoting properties to be sold at Auction.

7. What are Port Douglas Auction Clearance Rates? Some recent results are as low as 7%. That is compared to Auction Clearance rates of 72% in Melbourne on the same weekend.

As a seller, you need to consider the above points and ask yourself honestly:

Will there be more than one person wanting to buy more Port Douglas property?

Is my reserve price realistic ? Am I spending my marketing dollars wisely in Auction program that can be expensive yet not effective?

Above all,  a seller in these difficult market conditions must remember that prices are down because returns are down, capital growth is an expectation for the future and the uncertainty in the market place encourages buyers to expect a bargain purchase price.

Although most real estate markets around Australia are holding up well in a relatively flat market, areas such as Port Douglas are continuing to suffer due to low tourism activity and an oversupply of dwellings. Some properties within Port Douglas continue to record slight price decreases.

As far as property is concerned, Australia is a nation of two extremes right now. Whilst our southern counterparts are holding there own or doing well, like Sydney, and most of the capital cities the weak markets are definitely the tourist towns like Port Douglas, where heavy discounting is going on and there are a lot of similar type properties to choose from.

In these difficult economic times we are presently experiencing in Port Douglas, we are now dealing with “mortgagee in possession” auctions more than any time in the last 20 years.

Often the sale prices achieved for such Mortgagee Sales are below recently recorded sales prices for identical or similar properties. These depressed prices then set a “bench mark” for future sales and pressure vendors to meet the new but decreased prices for their properties.

Sellers needs to consider very carefully whether they are in a position “to hold” rather than “meet the present depressed market” expectations and wait for better times.

If you are a Vendor in a need to sell situation and you have weighed up the above points, you need to carefully consider the best method for achieving a sale price you will accept.