Saturday auctions: How will they work now they are all online?

Normally on a Saturday morning, thousands of people would be preparing to watch property auctions. Not this week, and not for the foreseeable future.

Now, in a test for technology as yet not embraced en masse by sellers, hundreds of vendors around Australia will on Saturday try to sell their homes online.

A ban on in-person auctions and open-for-inspections announced by the Prime Minister on Tuesday night saw sellers and agents scramble to hold their auctions before it came into effect from midnight Wednesday, and others convert to online auctions or private sale.

The Agency chief auctioneer Thomas McGlynn said the bans and the move to online auctions was just another in a series of factors that would alter the property and auction markets.

“There’s no doubt the volume of auctions will fall,” he said. “That’s for a number of different reasons. People’s circumstances have drastically changed in the past 72 hours.

“But equally at the same time we are going to see an impact on clearance rates because of the uncertainty in the market … because day to day people oscillate between being very concerned and confident about things.”

Online auctions run like a mix between a live stream and a traditional auction, with buyers registering and placing bids while watching the video as if they were there.

Another method involves buyers sending off bids, similar to eBay, and the time allotted for the auction is extended by five minutes every time a bid is entered.

McGrath held an online auction for a property in Sydney’s Clovelly on Thursday night, with a two-bedroom house selling for $1.77 million after six buyers bid. Chief executive officer Geoff Lucas said it showed buyers would make the move online.

“We see it as a way of the future, not necessarily in exclusion of physical auction, but as an enhancement so more people can be involved,” he said. “[The lockdown] is accelerating the trust in the platform.”

Mr McGlynn said online auctions would be less transparent, but likened them to buyers using an advocate or bidding via phone.

“There is an element of trust involved. But people need to provide all their details to be able to bid online,” he said. “Obviously we’re only 24 hours into this but what I’ve seen so far is there have been a lot of examples down the east coast where there have been people competing and happy to bid online.”

Domain senior research analyst Nicola Powell said the changes to how property was sold might not affect the private sales market as harshly while private inspections were still allowed.

“We already see more sales by private treaty anyway and the auction market is skewed towards the higher priced properties,” Dr Powell said. “I’m of the view those buyers who have their finances in place and want to purchase will continue to purchase.

“I think the market will take a bit of a breather, but that said, there will still be transactions happening.”

With Tawar Razaghi