Auctions still slow in Victoria, despite the in-person ban being lifted this week

Melbourne auctions may not snap back immediately this weekend after the state government lifted its ban on on-site auctions on Monday, with agents warning they’ll be cautious about bringing back the in-person format.

Some in the industry are keen to get underway, but are worried about a second outbreak of the coronavirus which could devastate the property market.

Domain research analyst Nicola Powell said this was one of the quietest weekends outside of January and holidays since Domain records began, with just 79 auctions scheduled to go ahead.

Dr Powell said this was a low point for the city’s famous auction market.

“For some reason Melbourne didn’t take up virtual auctions at the rate that Sydney did,” she said. “I would expect that this weekend would be the lowest level we’d see and we’d see it rise in the coming weeks.”

Some weeks in February showed lower numbers of auctions outside of the traditionally quiet January period, but they were close enough that they caught the seasonal market weakness.

In-person auctions had been banned since coronavirus restrictions were put in place in late March to comply with social distancing rules and slow the spread of the COVID-19 outbreak, but not all agents were keen to snap back into the classic format.

Brad Teal’s Louis Saba was apprehensive about converting established online-only auctions to in-person.

He said the proliferation of the new format had given agents more tools to get sales done in tricky conditions.

“[An auction I’m running this weekend] is an online auction and we’re keeping it that way,” he said. “The private sales are working well, and almost every sale I did in April was subject to finance.”

Mr Saba said banks were apprehensive about handing out loans to buyers they were concerned might lose their income, so it made it hard for buyers to sign unconditional contracts at auction.

Ray White Cheltenham’s Kevin Chokshi said he wouldn’t shelve online auctions entirely either, despite converting one of his to in-person immediately.

“I think we’ll keep doing this. A sort of a nice combination of on-site and live auctions,” he said. “This weekend there will be some who bid online but others who prefer in person.

“We’ll continue it for apartments or properties a bit further out.”

Others were looking for opportunities to get auctions up and running, but weren’t ready for this weekend.

Nelson Alexander’s Ryan Currie would be considering trying to move stale stock through auctions in the next few weeks, before they could complete full auction campaigns for new listings.

“We’ve been saying to all our guys, if you have stuff sitting there and waiting, waiting, waiting, we’re going to convert a lot of these properties that have been sitting idle to auction,” he said. “I’m reasonably confident.

“I’m sensing, after the Queen’s Birthday [weekend], 13th, 20th and 27th of June, those weekends will be quite good auction weekends.”

Mr Currie said social distancing would be key going ahead.

“People need to respect the social distancing rules and not get lazy about what’s enforced, we’ve got to be more alert,” he said. “There won’t be Mr and Mrs Jessup coming out with a cup of tea to chat to the neighbours, and those ‘research buyers’ will sit on their hands.”

Dr Powell warned that buyers, sellers and agents would need to be vigilant.

“The biggest risk is if we have another outbreak, because any potential secondary lockdowns could have a more dramatic effect on the market than what this one has,” she said. “It’ll be devastating for many businesses to have to close their doors again.”