AusFinance Gazette

How the property market is bouncing back as auction restrictions ease

Social distancing measures forced auctions online and inspections became private viewings, but things are now slowly getting back to normal

After a six-week hiatus, open houses and public auctions returned to the streets of Sydney over the weekend.

In step one of the Government’s plan to slowly reopen the economy, auctions and real estate inspections limited to ten people have been given the green light, under the condition that social distancing measures remain in place and everyone’s contact details be recorded. On Saturday, this new model was put to the test for the first time, and the results were encouraging. Here’s how it all went down.

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After the somewhat sudden announcement last week, over 70% of online auctions slated for Saturday in Sydney were switched to on-site auctions. 126 properties went under the hammer everywhere from Lane Cove to Bankstown, with a clearance rate of 68.1% and a median price of $1.1M. These numbers—particularly the sizable increase in clearance rates over previous weeks—provided a slightly anxious property market with a fresh wave of optimism and renewed confidence going forward.

Despite the change in scenery, most auctions were still streamed online to continue to cater to interstate and international buyers, potential buyers who weren’t comfortable being in attendance, and those who just weren’t ready to put on shoes again. Open inspection times were lengthened to allow for staggered entry to properties, with hand sanitizers at the door and a reminder to limit the touching of fixtures and fittings. Meanwhile, most auctions across Sydney were limited to registered bidders only, though not all. In Newtown, a small crowd of onlookers witnessed two first-home buyers duel it out for the keys to a three-bedroom townhouse that sold $85,000 above reserve for $1.585 million.

In the neighbouring inner-west suburb of Camperdown, a park side home went for $131,000 over the reserve for $1.231 million at an on-site auction that drew eight registered bidders. But it was a three-bedder on Macauley St in Leichardt that achieved the best auction results of the day, selling for $210,000 above the guide at $1.66 million. Assuming anxious property owners were watching this first weekend of eased restrictions closely, these results undoubtedly kept their worries at bay. Though uncertainties around the pandemic and its economic impact remain, the proof is in this weekend’s pudding: properties are still selling and yielding great results.

Though some of us had just gotten used to the virtual auction landscape and bidding from the comfort of our body-indented iso-couches, most agents agree that on-site auctions are the better option. Not only do they create a more transparent and competitive environment, hosting an auction on the property also evokes a stronger emotional response from potential buyers who have built a physical connection to the home.

Over the next few months, as COVID-19 cases continue to drop (and ultimately cease altogether), phase two and three of easing real estate restrictions will occur—first allowing 20, and then 100 people to attend inspections and public auctions. While we aren’t quite there yet, our post-pandemic future is starting to shape, and it’s looking even brighter than we hoped.

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