Bidding blitz beats lockdown blues

11 August 2021

By KATRINA CREER

The switch to online auctions has seen a massive spike in bidder registration numbers across Sydney – even higher than levels recorded before lockdown.

Clearance rates have remained strong throughout July, showing the continued resilience of the property market. Some virtual sales have attracted in excess of 30 potential buyers.

Clarence White from Menck White Auctioneers said the number of bidders is up from those attending auctions in-person during the market peak earlier this year.

In June, they averaged around 4.7 bidders per auction, but in July – when restrictions came into play - this number jumped to an average of 10.3 bidders.

“Basically, that has gone back up above the level that it was at during the height of the market in February which had an average number of 8.1 registrations per auction basis,” Mr White said.

Jesse Davidson, who chairs the REINSW’s Auctioneers Chapter said his company AuctionWORKS has recorded a similar upward trend. Their average number of bidders per auction has jumped from 5.3 before lockdown to 10.5 in the past five weeks.

“There has been such a reduction in listings that people are flocking to the stock that is on the market,” he said.

What’s different this lockdown?

Confidence has grown in the online auction process since last year with more agents deciding to push forward with campaigns.

Mr White, also a member of the REINSW’s Auctioneers Chapter, said people realised that it works, and they can achieve great results.

“Back in the first lockdown it was new and while it is still new for some people, they are at least peripherally aware of online auctions and realise it is a perfectly legitimate and transparent way to buy,” he said.

There is also less uncertainty about the economy than a year ago, which is helping to pave a smoother transition to online auctions.

“The buyers haven’t disappeared like last time although there is some hesitancy from new sellers when really there shouldn’t be,” said Leon Axford from Axford Auctions.

Which platform?

Technology is evolving quickly to re-create - as close as possible - the same experience as an on-site auction.

Some agents prefer to use an auction platform where only the auctioneer is visible, while others utilise Zoom or Google Meets that allows everyone to see each other.

Telephone bidding is used as a back-up in case a bidder loses connection mid-auction.

Asking buyers to turn their camera off when they are out of the running is also helpful, particularly if it is a popular auction.

“You can still see when someone is getting close to the budget or if they are already over it, it doesn’t change and it is bit of intuition,” said Mr Axford, who is also a member of the REINSW’s auctioneer chapter.

Popular platform AuctionLive will be adding Google Meets integration to their services later this month allowing both the auctioneer and bidders to be seen, if desired.

“Our system will automatically take care of all the Google Meet invites being sent out to people and that allows agents who want to use those videoing conferencing platforms to be able to do so,” said Anthony Nounnis, Director from AuctionsLive.

How to make online auctions a success

Whether you are auctioning online or on-site, the same processes are needed to ensure a sale.

Price alignment between the vendor and potential buyers is important as it isn’t as easy to resolve virtually.

Agents are also encouraging buyers to be prepared to start the bidding – this avoids any awkwardness and can set a positive tone early.

“It is all about preparation – all the work you’d ask an agent to do on auction day they need to do in the week leading up to sale,” Mr Davidson said.

Why now could be a good time to sell

Despite a large volume of properties selling at or above their reserve price, only a trickle of new stock is coming onto the market with listings down about 35 percent, according to CoreLogic.

Mr White believes this could be a missed opportunity as the current market is heating up with a tightening of stock.

“The advantage and time for sellers is right now – otherwise they are likely to be caught in a slightly flooded market once lockdown breaks,” he said.

Are virtual sales the way of the future?

Online auctions allow people to bid on a property from anywhere in the globe, however, they are unlikely to fully replace the on-site version.

Mr Davidson believes the system will continue to be used but people love the theatre of seeing a ‘live’ sale.

“Once we get good vaccination rates and everything gets back to normal, we will be off and away again,” he said.

Looking to get organised for spring - download the REINSW’s auction check list.