Online auctions wobble in first weekend after coronavirus ban on public auctions
A foray into online auctions got off to a rocky start on Saturday with more than half the auctions scheduled changed to private sale.
More than 2700 properties were set to go under the hammer around the country on Saturday but a whopping 54.7 per cent were changed to private treaty, Domain figures showed.
A meagre 2.9 per cent were brought forward to the 25th March — the last day public auctions were allowed before a ban began to tighten social distancing rules and slow the spread of coronavirus — or earlier. Just 10.3 per cent were changed to online auctions.
Due to the high levels of vendors withdrawing their homes from auction and listing for private sale instead, the clearance rate as reported at 6pm dropped markedly — although the result is not a true reflection of the new virtual auctions’ performance given the mid-week adjustment. The clearance rate measures the number of homes sold, compared to the sum of the number of reported results and the number of withdrawals.
Across the country, 2723 auctions were scheduled on Saturday.
By evening, Domain Group had recorded 857 sales, from a combined 933 reported results and 1492 withdrawals, to give a national preliminary clearance rate of 35.3 per cent.
Sydney had 1058 auctions scheduled. Its preliminary clearance rate was 37.3 per cent, from 394 reported results and 547 withdrawals.
Melbourne had 1400 auctions scheduled. Its preliminary clearance rate was 35.3 per cent, from 470 reported results and 807 withdrawals.
The future of properties listed for imminent sale is still to be decided, with many agents left in the lurch about whether their vendors want to take their homes into the domain of online auctions or not.
What was once one of the greatest Australian spectator sports was diminished to pixelated, glitchy and slow video streams of auctioneers addressing unknown amounts of buyers and members of the public who were watching from kitchens, bedrooms and living rooms.
Many properties slated for online auctions simply did not go ahead despite links attached to listings for interested buyers or curious members of the public.
Other online auctions were slow to start as agents struggled to corral registered buyers and worked through technical difficulties, including internet connection and how to operate the many platforms on offer.
Even so, agents have been scrambling to protect their clients, buyers and the general public, racing to adapt to the change and adhere to the government’s rules while making sure planned sales can continue.
One online platform, Gavl, had 57 auctions scheduled of which only 15 went live. Of the live auctions, three sold and 12 passed in.
In Sydney, the sale of a four-bedroom house at 57 Brown St, St Peters got underway 20 minutes after its scheduled time.
An opening bid of $1.4 million kicked off the auction and rose slowly before it passed in at $1,520,000.
McGrath Newtown selling agent Adrian Tsavalas said despite three of the four registered buyers throwing their hats in the ring, many were holding back.
“The mood is certainly not buoyant,” Mr Tsavalas said. “There is nothing like an in-room or in-house auction where there is human interaction.
“I don’t think the platform itself will have any adverse effects for sales results,” he added, saying buyers being made redundant had a greater impact.
Mr Tsavalas said while the industry was given short notice of the ban on public auctions and open home inspections, they were fortunate to be able to transact.
“To be considered an essential service and make an income, I feel very fortunate,” he said.
“I’m still in a better position being able to work, represent my clients and trade property. We’ve seen people working in hospitality lose it all.”
The online auction of a five-bedroom house at 24 Trevitt Road, North Ryde dragged on for an hour on Google hangouts with more than two dozen people joining the video stream.
Ray White auctioneer Alex Pattaro reminded everyone to turn off their microphones and cameras to avoid any embarrassing gaffes, which has seen at least one person log onto an online auction shirtless this week.
A vendor bid of $1.8 million was placed to start the online sale but it did little to rouse any interest from the buyers.
Mr Pattaro continued to stoke interest while agents worked the phones.
“There is no better time to buy. Money is cheap,” Mr Pattaro repeated.
The price rose by a meagre $5,000 after half an hour before the auction was placed on hold with background music appearing on screens.
This continued for the majority of the marathon sell-off before the property was passed in at $1,833,000.
Another property however, at 46 Potts Street, Ryde had more success. The three-bedroom home sold under the virtual hammer for $1,655,000 at an auction later in the afternoon. All six registered bidders fought it out online for the keys.
Another successful auction was an older style one-bedroom apartment at 34/8 Macleay Street, Potts Point.
The deceased estate also sold under the virtual hammer for $1,208,000. Selling agent Ben Bickmore-Hutt from BHR Bickmore-Hutt Realty said it was his first online auction in 30 years in real estate.
“I knew I had really good interest in the property but the feeling was you didn’t really know how it was going to roll out,” Mr Bickmore-Hutt said.
Auctioneer Damien Cooley and owner of AuctionNow, one of the largest online auction platforms, said some agents were nervous about transacting property online.
“There has certainly been some nervous agents because they’ve never transacted this way before,” he said, adding that many were scrambling to get online because of the lack of focus in embracing online technologies.
A planned super Saturday was dashed by the amount of auctions changed to private treaty, Mr Cooley said.
“The numbers are vastly down on what they would have been if we were calling public auctions. But I think the industry has done incredibly well,” he said.
“They’ve done an exceptional job given the timeframe that they’ve been forced to run online actions.”
In Melbourne’s Tullamarine, a three-bedroom house passed in at online auction after being listed with a price guide of $525,000 to $577,500.
The home at 6 May Street drew an opening bid of $500,000, followed by a counter-offer of $510,000.
Harcourts Rata & Co senior sales agent and auctioneer Daniel Galea pressed ahead in the face of technical difficulties, but eventually made a vendor bid of $530,000 and with no further offers passed the property in.
The property was in negotiations on Saturday afternoon, Mr Galea said.
He had better luck with a three-bedroom house at 16 Sherwood Drive, Thomastown, which sold under the hammer online for $615,000 amid competition from four active bidders.
“Even the conversion throughout the week from our onsite traditional auction to our online platform, they [the vendor] felt it to be seamless,” he said.
“Online platform-style negotiations, it’s a little bit like a rainy July auction day onsite, it filters out the onlookers. You get all the keen buyers in with umbrellas and gumboots, but you don’t get the neighbours.”
Real Estate Institute of Australia president Adrian Kelly said there were already 3000 auctions booked for Saturday around the country when the public auction ban was announced this week.
He was impressed with the quick reorganisation to online auctions and different methods of sale, particularly by full-time auctioneers who faced a threat to their own livelihoods.
“We’re lucky that with the internet, there’s all these new online platforms,” he said. “Even in trying times we can still make it work.”
He acknowledged the teething issues but expects them to be resolved soon.
“Everyone had [three days] to get organised which is not a long time, and I’m not surprised there were a few issues along the way, and these are challenging times anyway,” he said.
“I suspect as next week rolls around and probably the one after, all of our auctions will be much more streamlined.”
In Brisbane, a five-bedroom house at 51 Primrose St, Grange sold at an online auction for $1,801,000.
All five registered parties threw their hat in the ring, raising the price in varying increments.
Proceedings were paused a number of times to speak with buyers and take instructions from the vendors.
The property was on the market after a vendor bid of $1.8 million and it sold after a final $1000 bid was placed.
Ray White Ascot selling agent Ian Cuneo said the transition to an online auction was normal but there was more legwork done to line up buyers on the day.
“There’s documentation, pre-registration. There’s definitely commitment from the buyers and the agent to make it happen,” Mr Cuneo said.
“It’s not possible for the buyer to just go ‘I’m going to buy this’. It’s a little bit more complicated.”
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