Canberra’s promising super Saturday scuppered by rising withdrawal rates

What could have been Canberra’s super Saturday with 92 scheduled auctions was thwarted after 27 per cent of homes were withdrawn, following the federal government’s coronavirus-induced bans on traditional auctions. 

The last time the ACT had more than 90 scheduled auctions was on November 17, 2018 when 96 homes were to go under the hammer.

According to Domain data, 25 homes were withdrawn from Saturday’s auctions, up from 20 homes withdrawn the previous weekend. On March 21, two homes were withdrawn from auction, while on March 7 and 14 only one home was withdrawn on each day. 

The ACT recorded an auction clearance rate of 42 per cent on Saturday out of 40 confirmed results.

Domain senior research analyst Dr Nicola Powell said withdrawal rates had been increasing across “our three main auction markets” of Sydney, Melbourne and Canberra.

“It is a much higher withdrawal rate than we would normally see,” Dr Powell said.

“That’s the reaction of vendors in light of the federal government’s ban on public auction gatherings … [the announcement] only gave vendors a handful of days to decide whether they were going to pursue the online auction or switch to selling by another method.”

Dr Powell said the market would likely see fewer virtual auctions “because it is a new method of sale for vendors so there will be a little bit of caution from vendors taking their homes through that virtual environment”.

“Over the next couple of weeks, we’ll see that withdrawal rate remain elevated but I think once we get to the period … where the vendor has listed their home knowing it’s going to be a virtual auction, those withdrawal rates will go down,” she added.

For Andrew Chamberlain of Blackshaw Manuka, who sold 92 Finniss Crescent in Narrabundah via AuctionNow on Saturday, it’s business as usual.

The auction had 62 viewers and seven registered bidders with four actively participating in the bidding process.

“Once you got into the rhythm of the online auction, it just felt like a normal auction,” Mr Chamberlain said.

“If ever we had any concerns about people embracing the change and the new technology, well that’s well and truly behind us.”

Bidding for the three-bedroom home kicked off at $500,000 which was countered by a $25,000 raise. This was followed by $75,000 increase by a third bidder and then a $5000 raise by the opening bidder.

Bidding continued in increments of $5000 and $10,000 until the price reached $710,000. At this point, a fourth bidder entered the raise with a $725,000 bid. When the price reached $785,000, there were only two bidders vying for the keys of the Narrabundah home. 

After 50 bids, and no forthcoming offers, the house sold to the opening bidder for $918,000 – $78,000 above the reserve price. The new owners were a local family looking to remain in their much-loved Narrabundah neighbourhood.

According to listing agent David Stokes of Blackshaw Manuka, despite the bans put in place, “the general sentiment has been good from buyers and sellers”.

“Obviously we have some unique circumstances [with coronavirus bans] but Canberra is lucky in a few ways that it’s quite a buoyant market and there’s always a lot of demand for homes,” Mr Stokes said.

“We haven’t seen too much of a change in inquiry, it’ll be interesting to see what the next couple of months will hold for everyone.”

Sellers usually aim to wrap up an auction campaign before a long weekend prior to open home crowds flocking away to enjoy Easter holiday plans.

However, in light of social distancing rules put in place, Canberrans will likely holiday at home with auctions also put to rest. This Saturday, only one auction is scheduled for the capital.