The latest figures from CoreLogic show that dwelling values fell in six of Australia's eight capital cities in the month of January. With prices trending downwards, buyers have the upper hand at auction.
But lest you get overconfident, you'll still need to keep your wits about you to succeed at a property auction. By keeping a few tips in mind, you'll increase your chances of success and of walking away with a great deal.
Getting your finances sorted before you head to auction is crucial. If you get home loan pre-approval, you'll have a much better idea of the budget you're working with. If the property is passed in and enters private treaty negotiations, pre-approval will also give you a huge negotiating edge on other potential buyers.
To get pre-approval you'll first need to compare your home loan options. Find the home loan that's right for your situation and go through the application process to get yourself pre-approved before you place a bid.
Be a spectator
If you've never witnessed a property auction before, try heading to a few before you actually find a property you want to bid on. This will take some of the mystery out of the process. You'll have a much better idea of what to expect, the sort of bidding that achieves success and some of the bidding strategies that only serve to drive the price skyward.
There's another benefit to attending a number of auctions before you bid. There are a limited pool of auctioneers working in most capital cities and different auctioneers can run auctions quite differently. By attending a number of auctions, you can get to know the style of the different auctioneers in your area.
Ask for comparable sales
When you find a property that you like and you're ready to head to auction, be sure to ask the agent for comparable sales. This should give you a good idea of the vendor's price expectations and the price that the property is likely to achieve.
Pay close attention to the comparable sales that the agent provides. Try to determine if they're actually comparable to the property you'll be bidding on. Are the comparable sales newer? Have they been recently renovated? Are they on more desirable streets? Comparable sales that seem out of line with the property they're being attached to could be a sign that the vendor has unrealistic price expectations, and you can be more conservative with your bidding.
Bid with confidence
Start low, go slow and be confident. Get in on the bidding early to assert yourself as a contender and then increase by small increments. But show confidence. Don't be afraid to call your bid out loudly and to come straight back when someone outbids you. Showing confidence lets the auctioneer, the agent and the vendor know that you're serious about the property. Should it get passed in, you'll be top of mind when private treaty negotiations start.
Stick to your limit
Know your budget and stick to it - calculate the repayments you'll be able to afford before even thinking about bidding. Buying a house can be a very emotional process and it's easy to get attached to a property. But be ruthless in sticking to your maximum bid. It's tempting to go a few thousand over your budget, but that few thousand could put you in a world of financial pain if you end up the winning bidder.