Melbourne auctions: Agents won’t shake hands due to coronavirus fears, but crowds are undeterred
Melbourne’s auction clearance rate has slipped amid the economic uncertainty prompted by the global health crisis, even as buyers dropped large sums for top homes across the city.
Property buyers were still out in numbers on Saturday despite growing concern over gatherings of people because of the spread of the novel coronavirus, COVID-19.
Even as agents introduced temporary distancing measures such as banning handshakes, they said crowd and bidder numbers were steady.
A healthy 1,090 auctions were held in Melbourne on Saturday.
By evening, Domain Group had recorded a preliminary clearance rate of 68.0 per cent from 751 reported results. A fortnight ago, before the long weekend, Melbourne’s preliminary clearance rate was a stronger 77.4 per cent, later revised to a final 69.5 per cent as more results were collected.
The proportion of homes withdrawn from auction held steady, in a sign vendors were willing to go ahead with the sales process. On Saturday 31 auctions were withdrawn, compared to 32 a fortnight ago.
Ray White has been providing agents with packs which include signs and hand-outs saying handshaking is prohibited.
Chief Victorian auctioneer Matthew Condon said the company was being “contact conscious”.
“The message here is people are rightly being more cautious surrounding the current health issues,” he said.
But it did nothing to put off buyers and spectators.
In Collingwood, 60 people turned out to watch the auction of an unliveable home, which sold for $340,000 more than its reserve.
Biggin and Scott agent Andrew Crotty says the home at 44 Mater Street sold to a developer for $1.19 million.
“It had done the old owners very well for the past 50 to 60 years and was in need of repair now, so it would be demolished,” Mr Crotty said.
Five bidders took part and the home’s reserve was $850,000.
Mr Crotty said at an earlier auction in Abbotsford, 40 people came to watch, which was about what he expected.
“Crowd levels are normal so far,” he said.
Even so, the path of future property prices is in focus amid the global health crisis.
UBS economists warned that the significant disruption to labour markets from the coronavirus could push the unemployment rate higher and cut their annual home price growth forecast from 10-12 per cent to 5 per cent.
Domain economist Trent Wiltshire earlier warned a worst-case outbreak of the disease would lead to property prices falling, while in a more mild scenario price dips would be only modest and temporary.
There were no such jitters in Brunswick East, when dozens came to see a three-bedroom house sell under the hammer for $177,000 more than reserve.
The brick home had a hotly contested auction, with three buyers taking part.
Bidding opened at the bottom of the quoted price range, $1.3 million, but hit the top of the range and the reserve price with the very next bid of $1.4 million.
After that the three buyers traded blows until the price settled at $1,577,000, selling to a buyers’ advocate purchasing on behalf of an interstate investor.
Auctioneer and listing agent Mark Verocchi of Nelson Alexander declined to talk about COVID-19 or shake hands, but says economic jitters elsewhere had not yet reached the property market.
He said an investor purchasing in the current economic conditions is a good sign for market confidence.
Nelson Alexander director Arch Staver later confirmed the company was advising its agents against shaking hands at auctions and had postponed its monthly company-wide sales training.
“When people are taking money out of shares, they have to be putting it somewhere,” he said. “They used to put it under the mattress but now I think it’s safer in bricks and mortar.”
Global share markets plunged following the announcement that the COVID-19 outbreak had reached a pandemic status earlier this week, though Australian shares bounced back late on Friday after it was announced the government would make several exceptions to a ban on mass gatherings.
Earlier in Armadale, a two-bedroom house sold after a painstaking auction of more than 50 bids.
Spectators still came to watch and four bidders took part in the race for 1 Clarendon Street, undeterred by Jellis Craig agents also declining to shake hands.
Agent and auctioneer David Sciola said it was temporary company “best practice”.
But it didn’t matter when it came time to auction. While buyers were shy, they soon showed their hands once the home was announced on the market at $1.58 million.
After nearly 30 minutes, the home sold for $1,635,500, to an owner occupier.
“The share markets coming off 30 per cent does have a flow-on effect but we’re coming off such a strong few weeks in the property market and I think that will continue on for some time,” Mr Sciola said.
Later in Sunshine, a bungalow sold for $172,250 more than reserve in another marathon auction, with buyers fighting long and hard to secure the home.
The new owners of 79 Monash Street are a family from Seddon looking for a new, larger home for their young family.
Hockingstuart auctioneer and selling agent Marcus Fregonese said the auction went for more than 30 minutes, and the buyers even broke down into $250 increments because they were so keen to secure the home. It sold for $1,122,250. Its reserve was $950,000.
“It’s the lack of good quality family homes on the market [causing this],” he said. “There’s a lack of homes in Footscray and Yarraville which is driving them out into Sunshine and they see value for money.”
Mr Fregonese said his agency had only issued guidelines around contact because of COVID-19, but it was not strictly enforced yet.
“There’s a few buyers asking the question about if the corona[virus] was going to affect things but we haven’t seen that yet,” he said. “We’ve been warned, but we saw a couple of hundred people at the auctions today so people are out and about.”
In Melbourne’s east, a brick house in Rowville sold for $60,000 more than reserve with another strong crowd.
Bidding for the four-bedroom home at 370 Dandelion Drive started at $760,000, with two buyers taking part in the auction.
It sold for $910,000, Ray White agent Nick Strilakos said. He was confident coronavirus was yet to impact his local property market.
“Even in the current climate, people are still wanting to buy property,” Mr Strilakos said. “The theme of the day seems to be if people want the home then they’re coming out and bidding for it.
“The property itself was extremely well presented and ticked all the boxes and that’s the main reason we saw more than 75 people through during the opens.”
He said there were more than 65 people gathered to see the sale.
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