Melbourne and Sydney homes achieve strong online auction sales

In these uncertain times, real estate agents have had to adapt at lightening speed in order to keep home sales moving.

While open-air auctions are forbidden during the coronavirus pandemic, there is evidence to suggest online auctions might be an effective alternative when it comes to selling property.

Online auctions are proving successful despite only 5% of homes being sold that way. Picture: Getty.

---

That evidence, however, does not lie in auction clearance rates, according to realestate.com.au chief economist, Nerida Conisbee, who says clearance rates are no longer a sufficient indication of property sales, namely across Victoria and New South Wales, where the majority of auctions take place.

“Whereas traditional auctions typically account for 15 per cent of properties sold, online auctions only account for five per cent of total sales. This makes online auction clearance rates a poor indicator of total market activity,” she said. 

Of those properties that were sold via online auction last week, the clearance rate was 60 per cent for Victoria and 57 per cent for New South Wales. These figures do reflect a decline in recent weeks with both states usually hovering around 80 per cent.

“It has been hard to work out whether the drop over the past month has been driven mainly by poor demand, very low levels of people choosing to sell via online auctions or a fundamental problem with online auctions as a selling technique. 

Despite this, while perhaps not as theatrical, several Melbourne and Sydney properties sold under the virtual hammer for well over their reserves last week, leaving their vendors very happy indeed.

Melbourne

The auction limelight was on on several Melbourne suburbs last week. The Victorian terrace at 85 Rowena Parade in Richmond sold in the vicinity of $1.85 million last Tuesday evening, about $100,000 above its reserve price.

Selling agent Stuart Evans, Director – Marshall White Boroondara, said he had predicted a price of $1.8 million to $1.85 million.

“We conducted an auction via Zoom, I was sitting in the office connected to four buyers, connected to vendors, we opened the bidding at $1.73 million and it ended up selling for an undisclosed price,” he said.

This renovated Victorian terrace in Rowena Parade sold in the vicinity of $100,000 over its reserve price. Picture: realestate.com.au/buy

---

“The underbidder was really comfortable and even thanked us for the transparency with the online auction. The buyers were obviously staggered that they managed to secure the property and were, again, really comfortable with that Zoom auction process.”

On Saturday, six bidders competed for 60 Roy Street in Donvale on Anywhere Auctions. The online bidding service received 87 bids before the hammer fell at $905,000, the four bedroom property fetching $75,000 above the reserve.

Barry Plant Doncaster East agent, Jason Stepanow, described the result as a “penny drop moment” saying they didn’t know what to expect from their first online auction, but as the day drew closer they knew it would be a success.

“The indicating factors were the number of private inspections that we were holding to start off with, and then the amount of people that were actually willing to participate in the online auction as opposed to private sale,” he said.

“[An online auction] gives buyers an opportunity of buying when they wouldn’t normally be able to. We had buyers that were at work bidding, we had buyers that were interstate bidding… it was, I suppose, unorthodox but at the same time now this is the new norm.”

Elsewhere, a three bedroom apartment at 4/719 Elgar Road in Doncaster sold at online auction for $105,000 above reserve at $605,000. There were five bidders who placed 42 bids between them for the property.

Sydney

It seems property in the sought-after suburb of Bondi Beach is still hot to trot with a two bedroom apartment at 2/44 Ramsgate Avenue attracting a sale price of $860,000 at online auction on Saturday, a whopping $140,000 over its reserve.

Selling agent, Marnie Senior, of McGrath-Coogee, said she valued the dilapidated property between $800,000 and $850,000 before COVID-19 kicked into gear, but launched the home with a written reserve of $720,000 amid the crisis.

This dilapidated apartment sold under the virtual hammer for $140,000 more than its reserve. Picture: realestate.com.au/buy

---

“We launched this property in the middle of COVID so we launched it at the right price, which then attracted a lot of people. So it wasn’t on the market prior to COVID then dropping the price mid-campaign,” she said.

“We had over 100 private inspections of the property throughout the campaign… I think in total we had 28 registered buyers online, there was only eight active bidders and over 140 actually watching the live auction.”

The southern suburb of Oatley also recorded a stellar online auction result, with a four-bedroom house on a 450sqm block at 16 Waterfall Road fetching $1.26 million, which was in the middle range of the $1.1 million-$1.2 million price guide.

Towards the West in Punchbowl, the four bedroom house at 14 Sunny Crescent sold for $960,000 after attracting three registered bidders who submitted 10 bids.