Market set for another weekend of online auctions at reduced numbers

Virtual auction numbers are set to remain steady on the weekend as people continue to buy and sell homes but at much lower rates.

There are 683 scheduled auctions on Saturday in the harbour city and Sydneysiders have continued to take the lead on the new method of transacting, with 26.1 per cent of those listings going ahead as virtual auctions, Domain figures show. 

Almost half of properties (44.3 per cent) have been switched to private treaty.

There are 821 scheduled auctions on Saturday in Melbourne. However, Melburnians still have not taken to virtual auctions with as much gusto weeks after the public auction ban came into effect – with an overwhelming 74.6 per cent of those scheduled auctions now converted to private sale. 

A meagre 9.3 per cent of Melbourne properties will go ahead through a virtual sell-off this weekend in what was once the auction capital of Australia.

Domain senior research analyst Nicola Powell said a fair assessment of virtual auctions would not happen until the property market is out of the COVID-19 period.

“It’s still too early to tell the [true] uptake of virtual auctions,” Dr Powell said. “We’re not going to really understand the appetite for online auctions unless we’re out of the COVID crisis because there are so many other factors stopping sellers from listing.

“But what’s quite promising … is most [listings] have been switched to private. They haven’t shied away from the market.

“We haven’t seen a massive shift in the uptake in auctions. That said, we’re also not seeing people steering away. The reaction is quite steady.”

Nelson Alexander auctioneer Arch Staver said the difference in the uptake between the two cities went back to the history of auctions in each.

“Melbourne has always been the type of auction city. A house auction is not a commercial transaction but it’s almost like a community event,” Mr Staver said. “All the neighbours come out and watch the street theatre. It has more of a community feel. Our auctions have always held a level of vigour.”

He said the harbour city was much more accustomed to remote auctions.

“Sydney for a great many years, up until quite recently, still held a number of auctions in auction rooms where people weren’t present on site,” he said. “Sydney used to transact this way some time ago.”

But regardless of the lower virtual auction numbers, Mr Staver said people continued to transact.

“It’s likely to track like this for the next couple of months. There needs to be a change in the metrics of market performance,” he said.

“Our firm this week alone has sold between 15 to 20 properties. There needs to be a different method in recording the health of the market other than clearance rates.”

He said there was a “huge upswing” in property inspections since the reversal of the ban during the long weekend. “Having that shutdown actually highlighted to the general public that inspections are still available.”

Meanwhile in Sydney, a similar pattern is occurring but with larger volumes of virtual auctions.

“The average registered bidder is at about four with active bidders being about two,” Ray White auctioneer Alex Pattaro said. “Eight weeks ago there were three active bidders. We’ve only dropped one [bidder]. It’s still a sign that competition is in the market.”

Mr Pattaro said he had sold three of four virtual auctions this week and many vendors continued to achieve their reserve price.

He said many of the technical issues around virtual auctions had slowly been ironed out too.

“People are most definitely starting to warm up to the process. The fear of the unknown was in play maybe three to four weeks ago,” Mr Pattaro said. “We’re seeing more auction bookings in late May.

“Whatever is on the market is selling, whether it’s before, at auction or after. Transaction date is occurring.”