In a turn of news that will shock no one, auction clearance rates are down. However, many properties are still selling — but they are using private treaty as the sales method instead (although more and more are being sold via online auctions). Over the past week or so, the market is definitely feeling more positive with that frame of mind likely to strengthen as we move towards an easing of some of the restrictions in coming weeks.
Sales agents and auctioneers quickly moved to conducting remote and online auctions as soon as the restrictions were put in place. They were able to do that because the techonology to do so has been around for a while already, although it was definitely not as widely used as it currently is. Adaptive technology has certainly been our friend over the past few weeks.
One of the most common strategies that has been adopted in the past few weeks is what is being dubbed “combo” auctions. These auctions combine old technology (like making a bid over the phone) with new technology (viewing the property online, with visual representations of bids in a live format). The main reason these “combo” auctions are in place are to ensure back-ups are available: after all, you don’t want to miss out on your dream home if the wifi suddenly dropped out or your laptop died. Buyers can also see what is going on in front of them, including the bids, which can help them feel more confident when bidding.
In a sense, they can hear and see the auctioneer and they are communicating with agents, which is almost the usual way – apart from everyone not being there physically.
While no one knows what is likely to happen in the months ahead, it is likely that online/virtual auctions will become part of the new normal. In cities, it is likely that most properties will return to the normal, live, in-person auctions we are all used to. High-demand properties or those in areas where interstate/international buyers take a keen interest may have some form of a live and online auction (ideally, where the buyer watching online is on the phone to the agent and watching online, just to ensure they can bid as easily as possible!). Auctions in hard to get to locations, such as farms, may adopt a remote system semi-permanently. This will be particularly beneficial to the time-poor, as they won’t have to travel in-person to buy what they want.
Auctions have long been a much-loved part of Australian real estate landscape and their presence is unlikely to change. Most agents know that only about 10 buyers at any auction are there seriously (barring a few outstanding properties every year). Everyone else just wants to watch the spectacle: neighbours want to see who’s moving into the street, investors want to get a feel for the market, and some people just find watching others buy homes exciting.