Real estate market gears up for return of on-site auctions following easing of bans in NSW

Australia’s real estate industry is ramping up for the return of public auctions this weekend, following a six-week hiatus due to the coronavirus pandemic.

About 320 homes across the country are scheduled for auction on Saturday, roughly half of which are in NSW where public auctions will be allowed from Saturday.

While many properties were still selling before auction or being withdrawn, there was a rush among Sydney agents this week to switch auctions from online to on-site – following the partial lifting of the nationwide auction ban which came into effect from midnight March 25.

“It’s quite clear that we’re seeing agents revert to the traditional on-site auction,” said Domain senior research analyst Nicola Powell. “There has been a pretty swift change since the lift was announced and I think that’s going to be the way forward in the coming week.”

As of Thursday, more than 70 per cent of Sydney auctions advertised on Domain had switched from virtual to on-site auctions.  While open homes and auctions are allowed from Saturday, strict social distancing rules and regulations around hand sanitising stations will remain in place, with many auctions limited to registered bidders.

The Agency, which has four auctions going ahead on Saturday, has switched all its properties back to on-site auctions. However, the way the auctions are run will be determined on a case-by-case basis, according to national head of sales and chief auctioneer Thomas McGlynn.

“There are going to be owners who request differences in how things are operated, there will be some where only registered bidders are [invited to the auction] and allowed to inspect a property … in other circumstances, particularly where there is a large property that allows for appropriate social distancing, they may allow for more people to attend.”

He said some on-site auctions would continue to be simultaneously streamed online, to help facilitate interstate or overseas buyers or those who did not feel comfortable attending an auction.

Mr McGlynn expected auction numbers and potentially clearance rates to increase in the coming weeks, but noted many properties were still selling prior.

“I had one private treaty campaign automatically converted to an auction for this weekend [after the ban was lifted],” Mr McGlynn said. “And up until Monday, I had two auctions scheduled for myself for May 30, that’s now at 10.”

Dr Powell also expected Sydney auction numbers to rise in the coming weeks due to the lifting of the auction ban, but said volumes would still remain low compared to previous years.

However, numbers in the other auction-centric markets of Melbourne and Canberra – which had 109 and 25 scheduled auctions respectively – would remain at their very low levels until auction bans were lifted, Dr Powell said. Meanwhile, Adelaide and Brisbane had just 11 scheduled auctions each on Saturday.

The ban remains in place in most parts of the country except NSW and the Northern Territory, where auctions where few and far between.

“Sydney is the test for how the market is going to react to the ban being lifted,” Dr Powell said. “We’ll probably see Canberra follow pretty swiftly … and the next test will be Melbourne, which has been even harder hit because sellers didn’t adopt to virtual auctions as readily as Sydneysiders did.

“Traditionally Melbourne has more auctions than Sydney but during this auction ban that hasn’t been the case … until that ban is lifted in Melbourne, those auction numbers will stay as they are.”

Nelson Alexander director and auctioneer Arch Staver has seen a significant drop-off in online auctions, with most transferred to expressions of interest campaigns.

“We’re not doing anywhere near the number we traditionally do. I understand people looking to the weekend as a barometer of the market, but I don’t think auctions [provide that right now].”

Mr Staver, who has no auctions scheduled on Saturday, said most virtual auctions conducted by Nelson Alexander were being done during the week.

He was hopeful the auction ban would soon be lifted in Victoria, and expected a “great deal of the vendors who’ve postponed sales will then flick the switch”.

Auctioneer Russell Cambridge, director of Biggin Scott, was also in for a quiet weekend with no auctions scheduled because properties were listed for private sale instead.

However he noted they were already signing up vendors for onsite auctions in June, in the hope that the ban would have been lifted by then.