You can switch to an auction, but it is most effective for properties with broad buyer appeal in suburbs with clearance rates above 65%. With current Melbourne clearance rates in the low-to-mid 60%, there is a 35–40% risk of a property passing in, which may lead buyers to anchor their offers below the reserve (CoreLogic/Cotality/PropTrack/REIV).
Switching to an auction can generate urgency, but current buyer behaviour is cautious. RBA rate hikes in February and March 2026 have dampened buyer urgency (Domain).
When to switch to auction
Auctions are favoured for properties with broad appeal that can attract multiple competing bidders. This method is most effective in the eastern suburbs and inner or middle-ring Melbourne, where auction culture is strong (CoreLogic/Cotality/PropTrack/REIV). It provides a transparent, unconditional sale by a definite date.
The risk of passing in
Approximately 35–40% of Melbourne properties do not sell on auction day (CoreLogic/Cotality/PropTrack/REIV). While most passed-in properties sell via private negotiation shortly after, the highest bidder has the legal right to negotiate first under CAV rules. Vendors should establish a firm walk-away price before the event to avoid emotional decision-making.
When private sale remains the better option
Private sale is the preferred method for properties priced above $3–4 million or those appealing to a narrow demographic (CoreLogic/Cotality/PropTrack/REIV). It is also the culturally dominant approach on the Mornington Peninsula and Bellarine Peninsula. This method allows for flexible settlement terms and accommodates interstate or overseas buyers who cannot attend an auction.
The anchoring risk
When a property passes in, buyers often anchor their subsequent offers below the reserve price. This occurs because buyers perceive the vendor’s position to be weaker than the agent’s framing suggests (CoreLogic/Cotality/PropTrack/REIV). This shift in leverage can make it more difficult to achieve the original asking price compared to a continuing private sale.
Frequently asked questions
What happens if my home passes in at auction?
If the reserve is not met, the property is passed in. The highest bidder typically gains the first right to negotiate with you under CAV rules. Most passed-in properties sell within a few weeks through private negotiation, though buyers may attempt to anchor offers below the reserve (CoreLogic/Cotality/PropTrack/REIV).
Why is private sale preferred on the Mornington Peninsula?
Private sale is culturally dominant on the Mornington and Bellarine Peninsulas (CoreLogic/Cotality/PropTrack/REIV). These lifestyle regions often attract buyers seeking flexibility in settlement terms and deposits, which is more easily managed through a private treaty process than the rigid, unconditional nature of an auction.
Does switching to auction guarantee a faster sale?
An auction provides a definite date for a result, but it does not guarantee a sale. With clearance rates in the low-to-mid 60%, there is a significant chance the property will pass in (CoreLogic/Cotality/PropTrack/REIV). Buyer urgency has also been dampened by RBA rate hikes in early 2026 (Domain).
Can I still negotiate terms if I use an auction?
Auctions result in unconditional contracts, meaning you cannot negotiate terms or conditions after the hammer falls. If you require flexibility regarding the deposit amount or settlement date, a private sale is more appropriate as it allows the vendor to accept, reject, or counter offers (CoreLogic/Cotality/PropTrack/REIV).
Questions to ask your agent
- What is the current clearance rate for my specific suburb over the last 90 days?
- Based on recent open for inspection attendance, does my property have the broad appeal required to trigger a competitive auction?
- If the property passes in, what is our specific negotiation strategy to prevent buyers from anchoring below the reserve?
This article contains general market information based on data current as at April 2026. It does not constitute financial, legal, or real estate advice specific to your property or circumstances. For an appraisal and tailored advice, speak with a Fletchers agent in your area.