How much more house sellers can make by going to auction

October 29, 2026 — 5:00amVendors who sell at auction achieve a better result than those who accept an offer prior, but the gap between the two has narrowed in both Melbourne and Sydney amid the market downturn.Sellers in Melbourne were likely to benefit the most, with an 8.9 per cent premium over the highest offer before auction, based on a rolling 13-week median, Ray White auction data shows. Sellers in Sydney had a slightly narrower gap, at 8.1 per cent, while nationally the difference was only slightly less, despite much smaller, more volatile markets in Brisbane, Perth and Adelaide.Sydney and Melbourne traditionally see a seasonal bounce for auction premiums, with Melbourne peaking in recent years at 13.3 per cent in October 2021 and Sydney topping out at about 11.5 per cent in February 2022. Both have failed to regain ground this year as the property market deals with successive rate hikes, legislative changes and a cost of living crisis going into the spring auction period.Ray White chief economist Nerida Conisbee said while the gap was narrowing, the data shows even in a downturn, an auction was the most transparent way to arrive at a price for vendors and buyers.“I think that’s important at the moment,” she said. “Because we have quite a significant mismatch between what owners are wanting for their properties and what buyers are prepared to pay.”She thought the fact the premium had narrowed across both major markets reflected a general lack of bidders, even as the number of houses going to auction dwindled.“When you have less competition, [the] gap narrows,” Conisbee said. “It’s definitely the case that if you’re a buyer, you’ve got time, and there’s a lot less competition.”Max Wagschall, an agent and auctioneer at Sydney-based Murphy Residential, thought the premium that vendors could expect to receive for selling under the hammer would shrink even further by the end of the year, as vendors and agents were increasingly viewing “testing the market” at auction as a risky proposition.With sellers often unsure there was enough demand for their home to meet their reserve, he said accepting an early offer probably looked like a more attractive option.Wagschall said the auction has become part of a “process of education” for vendors about the value of their home, with houses that failed to sell on auction day often selling within the following fortnight, “because you’ve spent four or five weeks finding out where the [price] level actually is”.Clearance rates in both Melbourne and Sydney remain below 60 per cent, which broadly correlates with a balanced market, Sydney’s preliminary auction clearance rate was 43 per cent last week, with Melbourne’s at 54 per cent, as reported by Domain.But Conisbee said Ray White data still showed you were more likely to sell your home within 45 days of it being listed if it went to auction, even if it failed to sell on the day, compared to selling via private treaty.Nelson Alexander auctioneer James Pilliner said 20 years of experience selling in the inner city had led him to believe an auction was generally the best way to get a good result for vendors.Simon Schluter“A property that is on market for a long time does tend to lose value,” she said. “And days on market are starting to increase quite dramatically.”Melbourne-based auctioneer James Pilliner, at Nelson Alexander in Fitzroy, agreed that an auction was probably the best way for vendors to achieve the best price for their home, but he thought there was probably an element of self-selection in terms of the kinds of houses that went to auction in the first place.“We would advise someone to sell by auction if they had a property that we thought could generate three or four potential bidders in the same four-week cycle,” he said, noting the homes he sold were in the inner city and tended to attract a large number of buyers.If that level of interest wasn’t realistic, he’d recommended selling via a different method – and if a vendor had already purchased another property and needed to sell, he’d encourage them to consider the risk of not selling on auction day and look at any reasonable offer made prior.Jason Lien of independent Melbourne auction consultancy The Auctioneer said he’d experienced a 90 per cent drop-off in the number of auctions he and his partners were running, and thought this was driven by a lack of bidders – even in the midst of falling house prices.“There’s not a lot of demand, and there’s probably a bit of supply sitting around,” he said, and this could motivate vendors to accept an early offer, rather than tempting fate at auction.But for the right property, he thought an auction was still likely to get the best result for sellers.“The best auctions are usually ones where there’s literally two people who really want it,” he said. “They become irrational ... it’s not always logical thinking.”More:Property marketProperty pricesSydney house pricesMelbourne house pricesAuctionsProperty listingsFrom our partners