This edition of Auction Insights looks at the overall performance of auctions across the Ray White Commercial network for the 2017/18 financial year. This period we saw 240 Auction campaigns brought to market across the network (similar to the 223 recorded in 2016/17). These auctions yielded a steady selling rate albeit slightly down on the prior two years, a sale rate of 76.25% was recorded during 2017/18 with a total volume of sales of $285.95 million. The total 2016/17 financial year saw $310.93million change hands in auctions which represents 193 sales across a total of 223 auctions (a selling rate of 86.55%), while 2015/16 recording an elevated selling rate of 93.33%. This highlights the reduced urgency in the market as properties are taking longer to sell due to reduced sentiment and increased difficulty in obtaining finance for commercial investments.
We have witnessed buyer expectations adjust after a prolonged period of record low yields for quality investment stock. While it may take vendors slightly longer to realise this change in market conditions that have been fuelled by tightening in financing regulations. The competitive auction environment has slightly subsided this year with (66.67%) sold under the hammer during the 2017/18 financial year with 12.57% sold post auction. Last year we witnessed the sold prior to auction numbers increase as urgency was high in the market and the rush for some buyers to purchase prior continued through until late 2017. Over this past financial year we have seen post auction numbers increase to 12.57%, this rate is expected to continue upward until vendor expectations come more aligned to buyers. Purchasing under
auction conditions will continue to be difficult for some buyers, particularly those with complex financing structures.