Auction clearance rates across the country are expected to hold strong this weekend, despite growing economic uncertainty off the back of the coronavirus.
The number of homes going under the hammer has actually increased – more than 2100 homes are scheduled for auctions across our major cities, up from about 1920 last Saturday.
While some auctions are being brought forward and others postponed or moved online, it is still business as usual for most, albeit with some added precautions with social distancing.
Agents are reporting strong demand from buyers who still need to buy themselves a property, irrespective of what’s happening with coronavirus, and conviction from sellers who are keen to get themselves a result, with some rushing to transact amid the changing economic conditions.
Buyers kept their distance at a midweek auction at a rooftop auction by Ray White Sherwood. Photo: Supplied
Clearance rates have been holding steady week on week, said Domain senior research analyst Nicola Powell, but a growing number of homes were selling prior to the scheduled auction, particularly in Sydney.
“We have also seen a slight lift in [the proportion of auctions in Sydney] being postponed and those being withdrawn, week-on-week,” Dr Powell said.
It was too early to tell if this was a byproduct of the coronavirus, Dr Powell said. She said scheduled auction volumes across the country were expected to see their typical seasonal increase in the coming weeks, as vendors tried to sell before the Easter holiday.
“[But] given we’ve got economic uncertainty, I think vendors and buyers will be wary moving forward in the short term,” said Dr Powell, noting she expected to see a rise in virtual auctions and phone bidding as people looked to self-isolation and social distancing.
Melbourne will have the most auction activity, with 1145 homes scheduled to under the hammer, followed by Sydney, with 746 auctions, and Brisbane and Canberra with 92 and 54 auctions respectively. Perth and Adelaide both have fewer than 50 auctions.
Here’s what agents are expecting across our busiest auction markets:
Almost one in five auctions in Melbourne on Saturday will be in the inner city, with 225 properties scheduled to go under the hammer there. The inner south and east will be the next busiest, with 180 and 170 auctions, respectively.
“We sold seven out of nine properties at our office last Saturday and I don’t see why we shouldn’t have the same [clearance rate] again,” said Russell Cambridge, director of Biggin & Scott Richmond.
Apart from taking precautions, such as having house hunters pre-register to reduce close contact at auctions and open homes, it was generally business as usual.
“We’ve had a good listing week as well, they are still coming in,” Mr Cambridge said, but noted the among those looking to sell was a vendor concerned about job security and another looking to free up funds to pounce on the sharemarket.
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Vendors were looking to sell sooner rather than later, according to Gary Peer, director of Gary Peer Real Estate, who expects the proportion of homes selling before auction — at about 20 per cent last Saturday — to increase.
“There are buyers out who that are concerned that stock is going to get withdrawn and vendors out there equally concerned that buyers are going to start dissipating,” Mr Peer said.
It had been surprisingly busy given the economic uncertainty, Mr Peer said, but noted some buyers had dropped off due individual concerns about job security.
Helen Yan, director of Ray White Balwyn, who has two properties headed to auction this weekend, has also seen a small number of purchasers pull back, with some vendors also cautious about hitting the market.
“At the moment I do list a lot of property, but the vendors want to wait until next week and see how it goes,” she said. Those already on the market were also cautious, she said: “Vendors want to postpone, but I say I have a buyer, why postpone?”
She added numbers at open-for-inspections had dropped off, but those who still turned out were serious buyers.
Wendy Samrani, of Ray White Caringbah, has two of the 96 auctions scheduled in the city’s south, but expects one to sell prior.
“There are still motivated buyers,” Ms Samrani said. “The level of interest has dropped in the last two weeks, but we are still selling what we’ve got.”
She said entry-level properties in particular were still in strong demand, with first-home buyers still desperate to get their foot on the property ladder. She added vendors were reluctant to hold off selling.
“It’s really busy, it defies logic a bit,” said Catherine Dixon, of Phillips Pantzer Donnelley, who has gained additional listings this week and has had strong interest from professionals in the finance sector. While she has heard of some home-owners deciding against selling, her clients have been keen to get on the market faster.
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She has two properties among those scheduled for auction in the city and eastern suburbs on Saturday, but expects them to sell prior.
“A lot of people want the certainty of knowing they’ve got the property,” she said. “Most of the people we’ve got are really trying to buy something before their pre-approval runs out.”
In the inner west, which has the most auctions at 111, Simon Pilcher, of Pilcher Residential, has decided to switch all his scheduled onsite auctions to online auctions.
“Vendors were getting more nervous about having people in their homes, buyers more concerned about being in a crowded environment,” he said. “All my vendors are happy with the change and some are quite relieved we’ve gone down this path.”
Sellers were wanting to push forward their plans rather than hold back, he added, because the pandemic and its economic impact were a big unknown.
“They really want to get on with their life plans, I’m just explaining to them that the same goal may be achieved, but how we arrive at the destination may be somewhat different, and it may take longer,” Mr Pilcher said.
Conor Arnold, of Richardson & Wrench Ryde City, has brought forward the auction of a three-bedroom home in Ryde by two weeks, to take advantage of current buyer interest.
54 Greene Avenue, Ryde. Photo: Richardson and Wrench Ryde City
“I’ve got strong enough interest [after three open homes] to go to auction with confidence,” Mr Arnold said. “We don’t know what’s coming down the line and my vendor is happy for me to sell now and not wait around.”
While it will be business as usual for quality properties over the coming weeks and months, Mr Arnold said agents were “living in la-la land” if they expected to see hot auctions in two weeks.
In Brisbane, a healthy 92 auctions are scheduled, with the majority in suburbs in the inner city, south and north.
Agents have reported that the market was not just business as usual, but was flourishing.
“I was worried how coronavirus would affect everything, but our property inquiries since it all escalated last week have peaked higher than we had on average all of last year,” said Ray White principal Matt Lancashire. “Our open numbers on the weekend were ridiculous.”
Place Coorparoo agent Shane Hicks is taking three properties to auction on Saturday, one of them a five-bedroom, three-bathroom Queenslander in the leafy south suburb of Tarragindi, and he’s already got bidders registered for the 9am event.
“Look there are some jitters out there but the ones who want to buy a home still need to buy a home, and so they will,” he said.
“What we won’t see at this time is all the spectators. People who go to auctions and inspections for the sake of looking – they’re the ones staying home.”
Hamish Bowman, of Ray White New Farm, who is taking an architect-designed five-bedder in inner-city Auchenflower to auction, says his vendors have had no trepidations.
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“They’re committed to the sale which is great. Every day, I’m waking up with the news thinking things are going to change, but what we’re actually finding is there’s a real swing to the safety of bricks and mortar,” he said.
In Brisbane’s inner north, Ken Wearing, of Coronis, is confident a classic four-bedroom Queenslander will sell this weekend.
“We’ve had two offers prior to auction but it’s still going ahead. We’re getting a lot of activity at open homes and I’m expecting normal numbers at the auction on Saturday,” he said.
“More generally, our activity is off the hook and our position is that there isn’t a better time to sell. Buyers are still looking to buy – there just isn’t enough stock to sell.”
South Canberra will be the busiest region in the nation’s capital, with 11 auctions, followed by Weston Creek and Woden, with 10 and 9 auctions.
Andrew Chamberlain, director of Blackshaw Manuka – which has 11 homes headed to auction this weekend – said crowds would be down, but the number of bidders was expected to be in line with recent weeks, with the rate of inquiry also remaining strong.
“We have had discussions with a few people whose homes were scheduled to come onto the market and they would rather wait and see now,” said Mr Chamberlain. He noted if coronavirus did cause a drop in buyer demand, this would probably be balanced by reduced supply.
“The actual interest in each property could well be maintained or could possibly even increase,” he said.
Brett Hayman, of Hayman and Partners, has also seen a slight drop in those looking to sell, but said those already on the market were committed to selling.
“We’ve had more buyers trying to secure the home prior to auction, and we are seeing owners accept the offers more so than they would have a few weeks ago … for the certainty,” he said.
“[But] we don’t see it disrupting the market too much at the moment.”
As for requests to bid on the phone or online, most buyers were still happy to head along on auction day, Mr Hayman said.
“We get more people asking if the toilet paper in included in the sale,” he laughed.