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Auctions up as confidence grows

Business

The number of housing auctions being held across Adelaide are bouncing back toward pre-COVID levels, with strong clearance rates reflecting a shortage of supply.

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But industry leaders say the revival could be short-lived, courtesy of a softening of forward bookings in August ahead of the traditionally busy spring season.

According to CoreLogic data, there were 62 auctions held in Adelaide in the week ending July 26, following 43 and 50 auctions the previous two weeks.

Clearance rates have also consistently been above 50 per cent in recent weeks, about 5-10 per cent higher than in July last year.

Although the number of housing auctions being held in Adelaide are still down about 10 per cent on July 2019, the number is relatively strong given that total sales are about half.

Auctioneers are also continuing to use online platforms such as Zoom to conduct “hybrid auctions” with some registered bidders physically on site while others participate virtually.

Ray White chief SA auctioneer John Morris said his auctions since July 1 had achieved average clearance rates of 52 per cent compared with 45 per cent prior to COVID-19 in the first three months of the year.

He said the average number of registered bidders per auction had also risen from four to almost five. while the portion of auctions with no bidding had fallen from 27 per cent to 12 per cent.

“Over the past few weeks of all the new listings coming on, 25 per cent of them have been auctions whereas usually in South Australia that’s more like 10 per cent – it’s offering certainty through an unconditional contract in uncertain times,” Morris said last week.

“I had an auction last Sunday in Clearview where we had 20 registered bidders including one online in Queensland and the online bidder was the winner at the auction.

“The last two bidders were an onsite bidder and an online bidder and we had somebody monitoring the zoom chat and calling out what the online bidder was saying – to a degree it added to the theatre.

“When we do an on-site auction at the moment it is rare we get an online bidder but as an example I’ve got an in-room auction tomorrow in Mt Barker where the majority of bidders will be online.”

There are about 160 house, unit and apartment auctions scheduled in SA between July 21 and August 21 according to real estate websites.

Morris said Ray White had 71 auctions booked in the next three weeks, 56 of which he would conduct.

He said the increased ability to use digital platforms for auctions had Ray White well placed to continue auctions if restrictions were re-introduced as the result of a second wave of local COVID-19 infections.

Property values in more than two thirds of Adelaide suburbs grew in the first six months of 2020, defying COVID-19 slumps in larger Australian cities, according to the June quarter’s PointData Lay of the Land report.

Real Estate Institute SA president Brett Roenfeldt, who is also an auctioneer, said his auction numbers in July had recovered to be on par with last year but he warned that forward bookings for August were relatively light on at this point.

He said clearance rates had been particularly strong with almost all of his properties selling at auction if not before.

“The numbers are reasonable because of the shortage of stock in the market and the lack of listings so it’s all relative to that but we are certainly seeing strong buying demand and that is being reflected in strong success rates either before auction or under the hammer.

“Right at the moment the forward bookings for August are a bit average and I would have expected a few more in there.

“We’ve got a couple more weeks of listings with the potential for auctions in August and then we move to September so it will be interesting to see what happens in the next couple of weeks.

“As long as we maintain the same level in respect to COVID then I think our markets will slowly build and the big test is going to be as we move into spring and the numbers that come out because that’s traditionally our busiest time.”

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