Sydney online auctions: Volumes down, but competition remains strong

The number of homes scheduled for auction in Sydney has dropped to its lowest level in almost six months amid the city’s ongoing lockdown, but strong competition remains for properties headed under the virtual hammer.

There are 515 properties scheduled to go to auction across Greater Sydney on Saturday, down from 800 the previous week, with the bulk of sellers now having hit the market after the city-wide lockdown was announced four weeks ago.

Many are unlikely to go ahead with their plans to go under the hammer, though, with Domain data showing fewer than one in five properties proceeded to online auction as scheduled in recent weeks. More than 20 per cent of the properties scheduled for Saturday had already sold by Thursday morning, with more likely to sell prior, while other auctions would be withdrawn or postponed.

The higher sold-prior rate – which stood at 50 per cent of properties last weekend – combined with fewer homes being withdrawn this time around, had seen the auction clearance rate holding stronger than in previous lockdowns, said Nicola Powell, Domain’s chief of research and economics.

“Withdrawal rates have been much lower compared to anything we saw in the early lockdown stages in Sydney or Melbourne last year,” Dr Powell said. “What that tells me is vendors are a bit more confident [as] we’ve seen [how] our markets react to lockdowns, and what was really interesting for Sydney sellers is that there has been a big shift to selling prior.”

Domain figures show 19 per cent of properties were withdrawn from auction last Saturday, compared to between 40 and 60 per cent of properties at similar stages in previous lockdowns in both Sydney and Melbourne, though vendors were more likely to postpone auctions now – at 29 per cent of auctions last Saturday – compared to less than 10 per cent of auctions previously.

Fewer vendors are also hitting the market, with new property listings last week about 26 per cent lower than they were four weeks earlier.

The longer the lockdown – which looks increasingly likely to extend beyond July 30 – goes on, the greater the impact would be on auction volumes, Dr Powell said. However, as long as one-on-one inspections go ahead, the auction market should fare better than it did during Melbourne’s extended lockdown last year.

“Sellers are definitely holding back and watching what’s happening,” said Ray White chief economist Nerida Conisbee.

About a third of Ray White auctions have gone ahead online in recent weeks, with many selling prior and others postponed or converting to private treaty, Ms Conisbee said, noting only two auctions with the group had been withdrawn last week. Total listings were also down, back to levels seen in 2019 and 2020.

“Buyers are still there, though, but they’re now struggling with lack of stock until we open up again,” she said. “What is interesting is that average active bidders are high at the moment; this week it was 4.4, when the average for the past 12 months is 3.3.”

Ms Conisbee said improved economic conditions, rising vaccination rates and experience with lockdowns and online auctions had likely given both vendors and buyers more confidence to continue with plans to transact in recent weeks.

“At the moment we’re only four weeks in, though, so things may feel different if this drags on until September,” she said.

Auction volumes were down but competition on properties was up, said Jesse Davidson, chief auctioneer at AuctionWorks. He noted the average number of registered bidders at the company’s auctions had climbed from 5.3 to 10.3 over the past four weeks.

“The auction numbers are down 40 per cent, which gives buyers fewer options to purchase,” Mr Davidson said. “The numbers have come off, but the engagement this time around has been mind-blowing; we got a lot of push-back in 2020 from buyers saying I’m not comfortable going ahead [during lockdown], but this time it’s quite the opposite.”

Sellers were also more comfortable engaging in auction campaigns this time around, and more confident selling online, he said, though he acknowledged many properties were sold ahead of their scheduled virtual auction.

With the scheduled July 30 end to lockdown looking unlikely, the coming weeks would reveal how determined buyers were to push ahead with plans to transact, Mr Davison said. As it is, few early August auctions have been rescheduled, though that could change if lockdown is extended.