As a result of the COVID-19 pandemic and social distancing restrictions, the role of online auctions in the real estate industry has become a major topic of discussion.
In a recent REINSW webinar, expert auctioneers Jesse Davidson, James Pratt and Clarence White shared practical advice about online auctions, how they work and where they’re heading in the future.
Introducing the webinar, Davidson says: “We all feel very firmly that online auctions are going to play a very big role in what we’re doing, particularly until the conclusion of 2020.”
The state of play
“A bit of a process wasn’t it, when we all had to scramble very quickly and get up to speed,” White says of the rapid transition to virtual inspections and particularly auctions.
For Pratt, who quickly integrated digital technologies in response to COVID-19, this period been “really different” for his business, as well as the whole sector.
“We had the shock originally that restrictions were coming in, and I think there was a lot of pivoting and adapting by agents,” he says. “Then as the restrictions were lifted recently, we’re now seeing a different landscape across different offices. Some agents are still utilising online auctions; some agents are wanting to get back into traditional models.”
While the approaches of agents might differ throughout the state, Pratt is calling for some consistency in key areas.
“We need to have people out there at the moment that are wanting to buy property, and obviously having that process of an auction creates that urgency,” he says.
“So (there has been) a lot of change, a lot of agents looking for different models at the moment, but all having the same goal in mind, which is that we need to be getting urgency into the market, getting the best sale price, and really pushing auctions.”
Davidson then explains that while circumstances have been difficult, there could be a silver lining for the property market in the long run.
“What the online process during COVID-19 did was show us that we have the capacity well and truly to do deals,” he says.
The sale of two large properties during this period for in excess of $10 million, including a block of units in Randwick, also provides reason for optimism, according to Davidson.
“It’s really encouraging to see those high-end, savvy and astute investors who, no matter the conditions, are continuing to purchase good quality property. To me it’s a sign that property will come out of this,” he says.
What is an online auction?
Put simply, an ‘online’ auction is the same as a traditional auction but conducted online.
The panel also explains that an online auction involves any situation where communication is taking place remotely via a live stream.
“It gives you the opportunity to view the auction online, in real time, but also to purchase it (the property) online, which hasn’t always been there,” Pratt says. “It’s obviously a more virtual process each step of the way.”
There are two main categories of platforms for online auctions:
- Mass market video conferencing tools with bidirectional interface/interactivity between agents and buyers. These include:
- Google Hangouts
- Purpose-built, end-to-end digital auction products and solutions enabling ‘digital bids’ but offering only one-way video connectivity. These include:
“Lots of research, lots of time looking at different platforms,” White comments. They’re not all the same, they offer different functionality. And there are pros and cons for each.”
Why are online auctions still important?
On the day of the webinar, Davidson was preparing to run an auction where three buyers would be attending on-site, and eight buyers would be attending online.
“So anybody that thinks the days of the online auction are done, please think again,” he says. “We need to continue to facilitate the ability – particularly for aged purchasers – to sit on the comfort of your couch, bid from home and of course purchase a property.”
“The more you can get done online, the easier it’s going to be to create a bigger audience,” adds Pratt.
For everything you need to know about online auctions, watch the Webinar: Online Auctions – The Way Forward.