Will COVID-19 Alter the Auction Landscape?
Auctioneering is much more than selling a home to the highest bidder. Across the state, there are many Queenslanders who attend auctions with no interest in buying the home – they’re there to find out the final sale price as well as the atmosphere or simply out of love for all things real estate. Let’s face it: auctioneering is a performative art. However, in the wake of COVID-19 where auctioneers have had to adapt to virtual platforms and now to smaller, in-person auctions, it begs the question – can a pandemic permanently shake up the way we sell homes under the hammer?
Prior to the State Government implementing the Non-Essential Business, Activity and Undertaking Closure Directions, auctioneers were beginning to acclimatise to the world of virtual auctions. Three-time Australasian Auctioneer of the Year Justin Nickerson says the world of virtual auctions meant having to adjust his call and method to suit the digital environment. “The major change to my call has been to slow it down, to allow more time for people to make decisions, and also for technology delays,” says Nickerson. The usual energy of an onsite auction seemingly cannot be replaced in a virtual format either, with most auctioneers typically relying on the crowd to liven up the auctioneering process. “In a lot of ways the environment is more sterile, which takes away a lot of the things that would usually provide inspiration for one-liners,” adds Nickerson. “This has created more technology ‘dad’ jokes!”
With restrictions now easing, Queensland auctions are currently able to have up to 20 people in attendance, with a maximum of three staff additional onsite to conduct the auction. While normalcy is beginning to return, Nickerson believes it’s not “business as usual” just yet. Auctioneers will still need to pivot their delivery to adjust to smaller numbers onsite. ”Working on the premise that effectively it will only be registered bidders in attendance for the next little period, I think you’ll see most auctioneers drop a lot of the excess with their property descriptions and be more in-tune with who their registered bidders primarily are,” explains Nickerson.
The return of onsite auctions has seen a rise in scheduled auctions – is it a sign that Australian buyers and sellers prefer traditional auctions over virtual ones? The latest CoreLogic Auction Market Preview shows that for the week ending 31 May 2020, 692 auctions were scheduled across Australia’s capital cities – a slight increase from 612 auctions the week prior. However, it’s important to note that while clearance rates have almost bounced back to pre-COVID-19 levels, volume still remains significantly lower than usual.
So, is COVID-19 set to shake up the way we hold auctions? Will smaller groups of registered bidders take preference over large crowds of sticky beaks and property enthusiasts? Or will it go one step further – will there be a rise in virtual auctions superseding on-site auctions? Realestate.com.au Chief Economist Nerida Conisbee doesn’t think so, stating that auctions will “return to normal” once restrictions are lifted. “Right now, clearance rates remain low,” she says. “It’s partly because the market has slowed significantly, however selling by auction online is a vastly different way to sell compared to selling at a live auction. Once COVID-19 lockdowns end, we do expect a pick-up in auction activity and in clearance rates.”
Nickerson agrees, adding: “I think we’ll see a wider adoption of technology, but as a nation we we’ll have a real appetite for the things we haven’t been able to do throughout this period. A big part of that is a nation that loves property are on-site auctions.”