Jon Williams: It’s time for the WA real estate market to embrace auctions

In the grand tapestry of Australian real estate, there exists a peculiar divide.

The east coast, in its wisdom, has fallen hard for the fast-paced, high-octane world of property auctions. In WA, private treaty is king. Compared to the adrenaline-pumping drama of real-time bidding wars, we’re stuck in the slow lane, where potential home sales unfold with all the excitement of a chess match in slow motion. Given the current competition for homes, I say it’s time we get out of our comfort zones, crank up the volume and make the transition to a pro-auction State.

For context, 2023 saw the Melbourne market auction 41,302 properties and Sydney 36,844. Perth scraped in a humble 661 auctions in the same year over its total sales of 53,895 properties. We know right now how competitive the housing market is. We know right now people are missing out on homes and putting in multiple offers for multiple properties. What we don’t know is if those offers would change if they were delivered in an auction environment.

So, what’s an auction, and why does it feel like the east coast is enjoying a thrilling party that WA just can’t be bothered with? Well, an auction is a public, transparent bidding war where potential buyers duke it out, sometimes with the ferocity of a seagull over a plate of chips at Fremantle’s Fishing Boat Harbour.

The market shows us that auctions are not just a spectacle; they are a bona fide selling strategy. But in fairness to the private treaty lovers out there, they are not a one-size-fits-all solution. They require a certain bravado, a readiness to perform under pressure, which is not everyone’s cup of tea. They can be intimidating, with the auctioneer’s chant setting the rhythm for rapid-fire decisions. Not to mention, there’s no backing out once the hammer falls. There’s no “subject to sale” and no “subject to finance”, it’s a done deal. In contrast, the low-pressure private treaty landscape that has dominated the WA market gives buyers and sellers time to contemplate their next move.

Think of an auction like the latest iPhone launch — there’s a buzz, a line, and everyone’s eyes are on the prize. Just as we confidently shell out $2000 for the new gadget because we see everyone else doing it, auctions bring that same level of transparent enthusiasm to buying a home. Buyers see exactly what others are willing to pay, emboldened by the crowd to up their game. This open arena of bidding creates a social proof that enhances perceived value, something that simply can’t be replicated behind the secretive curtains of a private treaty, where the only evidence of competition is the agent’s word.

Culturally, too, WA marches to the beat of its own drum. This is the state that famously once voted to secede from the rest of Australia; going against the grain is practically in its DNA. While Sydney and Melbourne markets get a buzz from the high-adrenaline auction atmosphere, Perth prefers the steady, predictable rhythms of private sales, where the drama is kept to a minimum and the front lawn theatre is merely something we watch on TV.

If there was ever a time to enjoy the pizazz of auctions, it’s in today’s frenzied market. They are transparent, efficient, and can turn a sale into a highly lucrative event. Having advised clients on both sides of this dilemma there is often an argument for both strategies, and as most will agree there is never a one-size-fits-all strategy.

But perhaps, just this once, the east coast may be on to something.

Jon Williams is the director of Perth Real Estate Exchange.