The impact of auctions on residential property prices

Authors

Alessandro Frino, University of SydneyFollow
Maurice Peat, University of Sydney
Danika Wright, University of Sydney

RIS ID

117879

Publication Details

Frino, A., Peat, M. & Wright, D. (2012). The impact of auctions on residential property prices. Accounting and Finance, 52 (3), 815-830.

Abstract

This study assesses whether the sale method in residential real estate markets - auction versus private treaty - is a determinant of sale price. Utilising a larger and richer dataset than previous research, we test for a price effect in auction sales in Sydney and Christchurch. When self-selection biases are corrected for, using two-stage hedonic regression analysis and a matched sampling procedure, we find no significant difference between prices of properties sold at auction to those sold by private treaty. This conflicts with the conclusions of previous research in the Australian and New Zealand housing markets, which have documented a price premium associated with auction sales.