Coronavirus: How COVID-19 will impact Melbourne auction market
Coronavirus will inevitably impact Melbourne’s auction market, despite this weekend’s Super Saturday remaining intact. But technology may emerge as a white knight for the sales method.
Melbourne is set to host a Super Saturday of auctions tomorrow — but experts are warning the coronavirus crisis could curb the number of homes going under the hammer in the weeks to come.
Real estate agents are turning to online bidding platforms in droves to ensure anxious buyers can still compete while maintaining self isolation.
Property data firm CoreLogic reported a 65.6 per cent clearance rate from last week’s 1201 Melbourne auctions — almost a 10 per cent drop from the final week of February.
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CoreLogic auctions analyst Kevin Brogan said while 1215 auctions were still scheduled for Melbourne this week, the big unknowns were: “Will people attend? Will buyers participate?”
“I’m aware of a number of auctions where people are bidding remotely, and some auctions that are being quite strongly attended,” he said.
“But it’s not just about turning up — there may be people seeking to defer a purchase until they have more certainty.”
Mr Brogan said the clearance rate was still much stronger than a year ago, when it was 52 per cent.
Buyer’s advocate David Morrell expected “auctions to falter and more private sales to emerge”.
“People aren’t going to be out in public with other people,” he said.
“(As a result), a lot of campaigns that were due to start post Easter won’t.”
Peninsula Sotheby’s managing director Rob Curtain also warned bidder numbers could decline: “There’s a huge amount of fear out there, fear erodes confidence, and confidence makes a market,” he said.
The pandemic has already claimed one auction: that of a Glenroy villa unit.
YPA Glenroy’s Mel Merhi said 3/217 West St’s generous owner had been concerned about the spread of COVID-19, but decided to postpone when they received a request from their tenant worried about carriers of the virus coming into the home.
“She has tenants there and doesn’t want people going in,” Ms Merhi said.
But managing director of online bidding platform Anywhere Auctions, Gary Giritharan, said technology could keep the auction market motoring.
“If the need ever arose, (the whole property-buying process) could be done completely remotely,” he said.
Mr Giritharan said his platform allowed buyers to watch and bid at auctions in real time, and also sign sales contracts via an app and website. Plus agents could use it to complete digital sales authorities to sign up vendors.
“If you want to bid, within five minutes (of someone registering) we run checks — we collect a driver’s licence and passport, do a fraud check. We always ensure agents have the final say (as to who can bid),” he said.
He said Anywhere Auctions already serviced 10 per cent of Victoria’s auction market, through its partnership with the Real Estate Institute of Victoria and major agencies including Ray White, Barry Plant and Woodards.
But the coronavirus pandemic had spurred demand for the service from “agencies from all around Melbourne, from Glenroy to Port Melbourne to Rosebud”.
Buyers would also be able to bid at this year’s Good Friday Charity Auction for the Royal Children’s Hospital via the platform, Mr Giritharan said.
Gavl.com also allows buyers to watch, bid and buy property online.
REIV president Leah Calnan said auctions would “continue as they are at the moment”. But she forecast a boost in bidding online and over the phone, and in-room auctions involving only registered bidders.
At this stage, the REIV expects 1460 and 1220 auctions to be held over the next two weeks, before volumes plummet to 40 on the Easter weekend.
-with Jayitri Smiles, Nathan Mawby
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Originally published as Coronavirus: How COVID-19 will impact Melbourne auction market