We regularly see statistics that are put forward to add weight to a story line and the property market is no exception. Auction clearance rates are one such example, but another recent comparison might reveal a more positive sentiment in the market.

When a vendor is going to auction, they are usually advised by their agent what the prospects are of success on the day. That advice is usually based on prior negotiations with interested parties and of course the number of contracts that have been handed out along with building and pest inspections undertaken.

If no one has requested a contract to review, chances are, no one will be raising their hand when bids are called by the auctioneer.

Complimenting these hard measurables is what is called ‘market sentiment’. Market sentiment is that intangible factor that real estate agents encounter talking to potential buyers and sellers.

Sometimes it’s very positive such as when the FOMO (Fear Of Missing Out) drives market sentiment to a fever pitch.  At other times it can be diabolical, such as has been recently experienced when agents were banned from holding open for inspections and physical auctions.

In late May and early June, the market has seen a change in market sentiment which in part is reflective of the percentage of properties sold prior to auction.  By way of explanation, if you only have one interested party who is keen to buy, you are better off having your agent close that buyer prior to the auction rather than pulling the property from auction.  If you do the latter, that sends a clear message to the one and only buyer that they are the only interested party and they are now in the box seat when it comes to negotiating.

In early April, when market sentiment was flat, more than 80% of properties up for auction were sold prior to the event.  In the first week of June this figure had more than halved, proving that market sentiment was more positive with more vendors willing to take their chances at auction.  If more vendors are willing to do that, it shows that there are more serious buyers on the ground than there were a few months ago.  And given the importance of property to the overall health of the economy, that has to be a good thing.