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Direct Auctions and Long-Distance Bidding: How the Australian Real Estate Market Past Pandemic | Instant News


An Australian public obsessed with property is taking part in live broadcast auctions, and real estate agents are working on the telephone in an effort to secure returns for their sellers when buyer demand begins to dry up.

It was a chaotic end to March for the Australian property industry because more than 1,000 auctions were canceled throughout Sydney and Melbourne following the March 26 federal government’s ban on public auctions amid the eradication of the corona virus. But some agents experienced the success of online auctions.

Hundreds are still ongoing while some of the country’s leading agents, including The Agency, McGrath Estate Agents and Ray White, are boosting their existing online auction services for sellers who are comfortable with continuing with technology.

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Agency auction chief and national sales chief Thomas McGlynn, who sends updates daily to his agency team, said the company had maintained a sense of calm because it adjusted its sales methods to the needs of each client.

“We believe there are still parts of buyers in the market who are willing to negotiate and move to property and there is still a group of owners regardless of the current situation that still needs to get results,” he said. “I think there will still be transactions. We have seen this in Melbourne and Sydney, especially for property which is a rare property that does not appear frequently on the market. “

The digital platforms adopted by the industry include live streaming sites Auction Now, GAVL and Facebook Live as well as Zoom Video Communications video conferencing software and Google Hangout.

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Become Digital

The digital platforms adopted by the industry include live streaming sites Auction Now, GAVL and Facebook Live as well as Zoom Video Communications video conferencing software and Google Hangout.

The most significant prestige transaction has occurred despite the coronavirus pandemic and government restrictions was the sale of A $ 18 million (US $ 10.78 million) last month from the former German consul general building in Trelawney Street, Woollahra through Elliott Placks from Ray White Double Bay, Craig Pontey and James Keenan.

According to industry sources, the buyer was reported to be one of the founders and founders of the Atlassian billionaire, Mike Cannon-Brookes, who paid $ 100 million for a Sydney harbor house in 2018, and made his latest purchase through an expression of interest campaign.

McGrath Estate Agents chief executive Geoff Lucas described the results of the agency recently as “extraordinary” and that the high level of activity they have experienced since the new restrictions and needed to be introduced will “surprise a number of people.”

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Of the 191 auctions, McGrath Estate Agents was scheduled for the first weekend after government legislation for social distance came into effect, more than 50 fell under the hammer, though online, attracting dozens of observers.

For example, 140-year-old sandstone cottage at Alexandra Street on Hunters Hill it has been architecturally transformed into a luxurious three bedroom house with vaulted ceilings, polished hardwood floors and saltwater ponds, mosaic tiles and lawns to the rear.

Interior view of Alexandra Street property.

McGrath Estate Agents

Tracey Dixon and Stephanie O’Sullivan from McGrath Estate Agents issued a pre-auction price guide of A $ 3.35 million with an online auction that attracted 130 observers and four registered bidders. Finally it was sold under the hammer for A $ 3,375 million.

“We are pleased to see many examples of auctions that are broadcast live across our network that have proven to be popular with our clients, with several bidding activities through the platform,” Mr. Lucas in a statement following the results.

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Ray White’s agent, who spends A $ 30 million per year on his technology, attracts four bidders registered at each of the 383 online auctions he took to market in the last week of March.

Within 72 hours of auction limits, 50 Ray White offices have implemented an online strategy, which has since resulted in strong sales, including by Ray White Surry Hills, which sells the Federation of two bedrooms, one separate bathroom in Darley Street in Newtown for A $ 1,415 million.

Two bedroom kitchen, home of Darley Street.

Ray White

Of the eight registered bidders who competed for Newtown property, four were active with eventual buyers, young professional couples.

The Australian Auction is not as big as you think

Australian auction permit rates get a lot of publicity, regardless of economic conditions and market movements, REA chief economist Nerida Conisbee said.

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But he notes the reality is that very few homes sell through auctions.

Nationally, only 14% of total residential sales are made through auctions in 2019. However, the proportion differs by city and country, with Melbourne considered the auction capital of Australia with 30% shares auctioned, followed by Sydney (19%) and Canberra (26) %)).

Other sales methods besides the auction include a personal agreement, where the property is listed at the advertised price; expression of interest campaigns that require buyers to submit bids in writing before a certain date; and off-market sales where transactions occur without advertising or public listings.

Ms Conisbee said the shift in sales methods would make the use of auction clearance levels an indicator of excessive Australian market sentiment.

“The number of properties to be auctioned [March 28] less than half of what was scheduled earlier this week, with most moving to other forms of sales methods, “he said.

While he said “trying to make predictions about prices is not possible at this time,” he said the trend of watching online nationally among buyers and renters compared to the same time in 2019 said.

The number of people viewing online listings is down 10% nationally, while there is a 4.7% increase in views among tenants as they seek alternative accommodation and short-term vacation listings that are converted to permanent rentals according to realestate.com.au data.

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Head of CoreLogic Asia-Pacific research Team Lawless said the Australian housing market has now begun to enter a “period of disruption” and will not be immune to decreasing sentiment and a weaker economy.

However, he said the extent of the impact on residential values ​​remained highly uncertain, with the number of residential property sales expected to fall “dramatically” over the coming months, due to declining consumer confidence, more Australians unemployed, and vigilance from the lender.

“The trend in capital growth will depend on how long it takes to control the virus, and whether there are additional obstacles to business or personal activities,” he said.

“This is the uncertainty of a health-related crisis, not an economic crisis, or financial catalyst, that’s a big difference here. There is more uncertainty, especially when you see some parts of the economy being closed for a long time. “

Price Advantages Start Slowing Down

CoreLogic RPData’s March the silent price index shows Australia’s rising value lifting 0.7% last month, the lowest monthly increase since the market began to move in July 2019.

The value of Brisbane rose 0.6% for a month, while Perth rose 0.5%, Canberra added 0.6%, Darwin jumped 2% and Adelaide rose 0.3%, while Hobart was the only capital city to record a decline, down 0.2%.

Every year, national values ​​increase by 7.5%, the highest increase since the end of 2017. However, this increase is expected to be short-lived, with leading market commentators such as chief economist AMP Shane Oliver predicting a 20% decline in house prices and double the unemployment rate to 10% or more.

In an effort to gain a better understanding of industry sentiment, CoreLogic also conducted a national survey of real estate professionals, asking more than 400 agents and principals if they had seen changes in the number of buyer requests by the end of March.

A third of respondents saw buyer demand decline by more than 50%, a result that was in line with a sharp decline in consumer sentiment and rising unemployment, which would make people less confident or unable to buy property.

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UniSa lecturer and property writer Peter Koulizos estimates the number of transactions will fall in the next six months, but he does not predict the value to plummet, given the country’s low interest rates, government stimulus packages and additional banking measures that allow home loan customers to pause repayment of their home loans for up to six months.

“Demand has really declined because people have more important things to think about now than improving their homes,” he said.

“They certainly don’t see vacation homes and they put investment property purchases on the shelves. Their main focus now is to keep their jobs and maintain their income.”

He warned, however, that the actual test would arrive in six months when the suspension of mortgage payments was scheduled to end and hopes would be for businesses to be reopened and normal working conditions to continue.

Major Australian banks have offered borrowers who have lost their jobs or suffered lost income because Covid-19 has the opportunity to postpone payment of home loans for up to six months. However, unpaid interest arising during this period will be added to the loan balance.

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“For property prices to fall, people must be forced to sell, and the last thing Australians do is sell their homes,” said Mr. Koulizos.

“The last quarter of this year is something to watch out for because we will wait to see what banks are doing and what the government is doing to help us get out of this crisis.”

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