A new auction type is emerging in states previously averse to selling under the hammer
Cities like Melbourne have almost half of their property sales completed by auction, while the likes of Perth have barely any at all, but a new auction type is emerging.
When reflecting on the weekly auction clearance rates, it is evident that Adelaide and Perth are not an auction market.
As of the 21 September 2025, Western Australia only had three auction results, the same as Hobart.
South Australia had 105, but that represented less than half that of the private sales results for the same period. Queensland’s 237 sales are around a fifth that of the 1000-plus private sales.
By contrast, NSW and Victoria sat around the 1,000-auction results mark.
Some investors use the auction clearance rates as an indicator of market performance and strength, but in the case of Adelaide, Brisbane and Perth, if you were to assume that low auction rates mean a slow market, you would be mistaken.
Perth and Adelaide have seen a sweeping trend of silent auctions emerging across the state as the preferred method of negotiation.
Let’s start by unpacking the difference between a silent auction and a traditional auction.
Traditional auction
This is the most familiar format, particularly in Australian property markets.
Bidders gather (either on-site or online) and make public offers in real time.
The price rises incrementally as bidders outbid each other until the hammer falls.
Investor considerations:
- Transparency: every bid is visible, giving investors clarity on demand and competition.
- Urgency: auctions create pressure and emotion, which can sometimes push prices higher than private negotiations.
- Risk: properties sold “under the hammer” are usually unconditional, meaning due diligence must be completed beforehand.
- Strategy: setting a clear maximum bid and conducting full due diligence (valuation, pest/building inspections, comparable sales analysis) is critical.
Silent auction (sealed-bid auction)
In a silent auction, each interested buyer submits their best offer confidentially, often by a set deadline. Bids are not disclosed to other participants, and the highest bid (or most favourable offer) wins. These are not recorded in the auction data.
Investor considerations:
- Secrecy: investors don’t know what others are bidding, which removes the chance to adjust their strategy in real time.
- Overbidding risk: To secure the asset, investors may submit a higher bid than necessary, potentially reducing returns.
Quicker sales
The emergence of silent auctions over traditional auctions allows the vendor to sell the property quicker and for a stronger price than what they would likely achieve under the other formats of traditional auction or even a back-and-forth negotiation facilitated by the agent with multiple buyers.
A traditional auction campaign takes up to six weeks weeks of marketing, and in the Adelaide and Perth markets properties are commonly selling within days of being listed.
A silent auction also allows agents to deal with a high volume of buyers in a succinct manner.
Additionally, the fact that buyers just do not know what other bidders/buyers are offering, and they only get one shot at putting in their best offer, they will commonly make strong offers that result in premium prices being paid, for fear of missing out.
Auction strategy
For investors, this poses some significant challenges as to how to know what to pay for a property, leaving investors at risk of paying too much or repeatedly missing out if they can’t be competitive in their pricing.
The best strategy is to undertake thorough market analysis and set a firm ceiling price, have very sharp terms and conditions, then submit an offer that reflects true value and a number in which you are happy to walk away at.
If someone else pays more than you, you need to know that you will be content that you put your strongest position forward, up to the point at which you saw value.
Here are some tips that will allow you to get the competitive edge, other than just putting a big number on the offer:
- Longer or shorter settlement periods: you need to speak with the agent and find out what the sellers’ preferences are here and your bank/broker to ensure you will be able to meet the timeframes you have set yourself. But sometimes a vendor wants more time to buy another property, or a quicker settlement to facilitate another purchase.
- Shorter time frame for pest and building reports: If you are house hunting, speak with a few pest and building inspectors and ask how long they need to turn around a report. Some can do it in a matter of days so there may be no need to have a 10-day or 14-day P&B clause. You may be able to reduce it to just seven days or less.
- Shorter finance clause periods: again this will need to be a discussion with your bank/broker as to what they can manage for you. In other states it is common to only have five days to get your finance unconditionally approved, so you may be able to tighten up this time frame too.
- Make elements of the offer unconditional: if you are in a position where you know you can secure the purchase funds, such as having access to an overdraft or cash reserves that will ensure you can complete, you may like to take the finance clause out altogether. Or remove P&B if you plan to know the house down for a rebuilt.
- Offer a rent back period – if when speaking with the agent you find out the seller has not yet purchased another property, they may find a rent-it-back option appealing to allow them more time to buy and move.
- Be pre-approved for finance and advise the agent of this in the offer: this can show you are qualified and in a strong position to complete the purchase.
- Don’t offer a round number: most buyers make an offer that is a round number, such as $650,000, try something a little different to get you up and over the other offers, such as $651,500.
