As the housing market adjusts to a buyer's climate, home sellers are increasingly opting for private treaty sales over auctions. This shift is driven by factors including a desire for confidentiality, a perceived lack of buyer urgency, and a slower overall market.
Nervous home sellers, aiming to gain an advantage in a buyer's market , are increasingly opting for private sales instead of auctions. A surge in property listings is evident nationwide, driven by factors such as investors unloading assets, the impact of rising interest rates, and homeowners seeking to capitalize on a slower market to upgrade their properties. However, private treaty sales are gaining traction among sellers.
Auctions traditionally offer a transparent process where the entire neighborhood can observe the market's valuation of a property through competitive bids. Conversely, private sale processes allow offers to remain confidential, which appeals to some sellers. However, this confidentiality can also lead to a lack of urgency and competitive pressure, potentially resulting in lower sale prices.Data from SQM Research reveals a 10.3% increase in nationally available properties for sale in January compared to the same period last year. Sydney witnessed a 19% rise, while Melbourne experienced a 15.9% surge. Notably, SQM Research founder Louis Christopher observed that this increase in listings appears concentrated in the private treaty market. Auction listings for the first two weekends of February were 7% lower than the previous year, with Sydney experiencing a 9.5% decline and Melbourne a 4.6% drop. Christopher attributes this trend to vendors seeking to avoid the pressure and transparency of auctions in a market where buyer confidence is waning.While it's early in 2025, Christopher anticipates continued shifts towards private treaty sales as the market adjusts to the lingering effects of high interest rates. Many homeowners selling now decided to list before recent positive inflation data hinted at a potential interest rate cut as early as this month or May. The presence of a significant number of stale listings – properties that have remained unsold for over 180 days – further indicates a slowdown in market participation. Sydney and Melbourne are experiencing 20.7% and 19.2% increases in stale listings respectively compared to last year.Buyers' agents Michelle May and Nicole Jacobs have also observed this trend towards private treaty sales, particularly among apartment sellers. May notes that the demand-supply dynamics differ for apartments and family homes, particularly in high-density areas where buyers have more choices. Jacobs emphasizes that seller reluctance to auction stems from a desire to protect their assets in a buyer's market, avoiding the potentially public and revealing nature of an auction day. She suggests that some sellers find the process emotionally taxing and may take a lack of buyer interest personally
Real Estate Private Treaty Sales Auctions Buyer's Market Housing Market Interest Rates Property Listings Seller Confidence
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