More auctions likely to be postponed as Melbourne's lockdown extended

For the second week running, real estate agents across Melbourne are working with vendors to postpone auctions or move them online, following the city’s lockdown to slow the spread of the latest coronavirus outbreak was extended by seven days.

On-site public auctions and property inspections are banned in Melbourne as part of the lockdown, which will run until 11.59pm on Thursday, June 10.

Before last Thursday’s announcement that Victoria would enter a seven-day lockdown, Melbourne real estate agents were preparing for their second-biggest auction weekend of the year, with a massive 1269 properties scheduled to go under the hammer.

While some were rushed forward to Thursday evening, ahead of the lockdown, others were postponed for two weeks, and others switched to an online format.

On Saturday evening, Domain Group recorded a preliminary clearance rate of 71.4 per cent from 878 reported results, with 207 auctions withdrawn, a slightly higher number than usual.

By Thursday evening, there were 1320 auctions scheduled for this coming weekend and while many will go ahead online, many more will be postponed until after the long weekend.

Chris Daly, of Jellis Craig, said there’s “not a one size fits all” solution for vendors who were scheduled to go to auction this weekend.

“Where you have a property that you know will have multiple bidders who are all technologically savvy, then our recommendation to our clients would be to go ahead with a Zoom auction, which we did in many cases last weekend with some really strong results,” he said.

But he said because many properties going to auction this weekend had had their campaigns cut short, due to the current restrictions, the group was recommending some vendors postpone their auctions until after the long weekend.

“Some of my colleagues are pushing out auctions that were scheduled this weekend until June 19, which is after the long weekend, which gives them a buffer for any further extensions (of the lockdown) and it just gives them that chance to potentially attract another buyer or two,” he said.

Nelson Alexander director Nicholas West said the group had a 96 per cent clearance rate last weekend, in spite of the move to virtual auctions, and expects dozens of auctions scheduled for this weekend to go ahead online. 

“I think that clearance rate is a strong sign that the market is now very attuned to online auctions and accepting of the process,” he said.

“And, it’s been interesting to watch how calm everyone has been both last week and this week with the announcements that there will be no in-person auctions. Everyone just knows what to do now, they are totally comfortable with the online process.”

He said in some circumstances where campaigns have been cut too short to allow buyers to do their “due diligence” or the vendors aren’t “totally confident” with an online platform, they are rescheduling auctions for later in the month, including mid-week auctions, to avoid a bottleneck on the last few weekends in June.

Mr West is confident that the current lockdown won’t dampen buyer demand.

“We know buyers are keen as mustard and are eager to participate in auctions, whether it’s from their living room or if they have to wait a couple of weeks, we know things will crank up again because the appetite is there,” he said.

Mr Daly said some buyers who had recently sold their homes and were looking to buy another one were becoming “increasingly worried about finding somewhere to live” since the announcement on Wednesday the lockdown would be extended.

“They are a little bit worried about not just finding something else to buy in time but also something to rent if they can’t find something to buy,” he said.

“Because from the rental side of things, our property managers let more properties priced over $1500 a week in May than they ever had, which means it’s getting even harder for families to rent a family home.”

Besim Kanacevic, of Belle Property Albert Park, said he expected significantly more auctions to be postponed this weekend than last weekend mainly due to the sales campaigns being cut short.

“Most of the properties that are planned to go to auction this weekend have only had two to two-and-a-half weeks of inspections which means many prospective buyers didn’t get to have those final inspections that often happen in that last week,” he said.

He said for first-home buyers, in particular, the lost opportunity to carry out a final inspection on properties going to auction this weekend, means he was advising some vendors to postpone.

“What usually happens with first-home buyers is they do all the running around and they’ll inspect a property once or twice on their own and then they’ll get mum and dad to come along and get their approval before they bid,” he said.

“That often happens in the last week of a campaign and for many properties going to auction this weekend that didn’t happen and so in those kinds of cases you would postpone the auction.”