Live online auctions are exceeding expectations with commercial agents reporting great success from higher sale prices to greater bidder numbers. CBRE’s Head of Private Client and Metropolitan NSW for CBRE Nicholas Heaton said consistently maintaining live online auctions since the start of the pandemic had proved exceptionally successful.

Mr Heaton said up to 80 per cent of CBRE’s properties now went to live online auctions (as opposed to virtual auctions run over several weeks via expressions of interest with bids submitted on final days). “We never stopped doing these (live online auctions) whereas others came in and came out of doing so,” Mr Heaton said. “Definitely it’s been an education process but now our vendors and buyers are 100 per cent comfortable. Since lockdown we’re running at a 91 per cent clearance rate - and pre-lockdown it was 80 per cent so we’re in a bit of a boom.”

Bidding at the click of a button

Buyers have certainly warmed to the idea of buying at the click of a button so to speak. Since covid threw real estate across the board into online mode last year, one of the largest amounts commanded by a virtual auction in Australia was the $35 million winning bid placed for the 97,500ha Queensland cattle station Nardoo last October. Not only did the buyer spend their millions online they competed against 10 others one of whom placed an opening bid of $20 million. The sale was secured by Ray White Longreach.

Any commercial agency still wondering about the power of online auctions need only look to results as well as participation levels at recent metropolitan virtual sales. In July two eastern suburbs apartment blocks in Sydney fetched $21.21 million at a live online auction run by CBRE. There were 20 registered bidders for the auction and feedback had been received around the $15 million mark during the campaign. The fact the sale was virtual did nothing to quell confidence with many bids being placed in $500,000 increments interspersed with a few of $1 million.

On Tuesday August 3 CBRE recorded another successful online sale, this time of an apartment block in Randwick, also in Sydney’s east. The property comprising two blocks containing 12 apartments fell under the hammer for $13 million after price expectations had been set at around $11million. “We had 20 bidders on that one which is huge,” Mr Heaton said. “Pre-covid we would average 10 on a property like that. It’s scary. In general we were averaging about 5 bidders per auction campaign before covid – now during lockdown it’s an average of 10 so we’re 100 per cent up.”

Burgess Rawson is another agency experiencing extremely positive results in the online post-covid climate, this time with its unique live Portfolio Auctions run remotely. “No-one is as active in this hybrid space as we are,” explained Burgess Rawson’s General Manager Stephen Lovison. “It more ‘remote bidding’ – there is still a live auctioneer but the buyers can bid from anywhere via phone or an app nowadays. With our auctions, everyone can see what everyone else is doing as if everyone were in the same room.”

Growing buyer appetite

Burgess Rawson has long held its regular Portfolio Auctions in the Opera House in rooms overlooking Sydney Harbour. These have always been open to interested onlookers and bidders either to attend in person or view and participate via video link to a live broadcast. Now that Burgess Rawson Portfolio Auctions are confined to this remote process, buyer appetite and interest has only spiralled upward, according to the agency. “Our audience has come with us - there’s been no lack of appetite and we’re getting the same if not better results,” Mr Lovison said.

Aside from not being able to physically attend the other major difference with a virtual auction is a slightly lengthier pre-administration process.

CBRE’s Mr Heaton explains “legally we need people to register to phone bid and bid online - give us a copy of their driver’s licence and fill in a form. That is done a week prior and on the day of the auction the auctioneer checks all those bidding authorities.” Bidders either click to bid or give instructions to their agents over the phone.

For Burgess Rawson, pre-auction administration required for remote bidding has streamlined processes even more so than before. The boutique agency requires online bidders to produce identification and also pay a pre-deposit before each auction.

“We had altogether over 400 bidders registered between our Sydney and Melbourne auctions this month,” said Burgess Rawson National Director Darren Beehag. “Buyers have embraced the process. There’s no resistance to them having to register to be at the auction.

“Going forward even when covid eases and we’re back to more normal conditions we’ll still have this registration process – it’s here to stay now.”

The agency is also drawing more attention worldwide. “We’re able to trace now who’s watching our auctions,” Mr Beehag said. “We’re seeing people from South Africa America India and China all these places tuning into our auctions which is something we wouldn’t have thought of several years ago.”

Keeping it simple

The simplicity of bidding online is fuelling rising participation said CBRE’s Mr Heaton. “The ease of logging on and bidding online when you’re geographically challenged is what makes it so attractive,” Mr Heaton said. “We have a lot of bidders with 9 to 5 jobs – lawyers, doctors, accountants – and it’s difficult to take that hour off to commute to the auction and back whereas now you log on for 3 minutes between appointments during your day job.”

For this reason Mr Heaton like many others is adamant the live online auction is “here to stay”. Online has upped inspections too.

“We do video auctions, Zoom appraisals and video inspections and per campaign our average amount of inspections has risen by about 25 per cent,” he said. “It is also easier for us to qualify who the real buyers are as we use FaceTime mostly and if they’re interested most book a physical inspection.  

“The time to do a transaction for both a buyer and vendor I think has halved. It’s really exciting times. We have 32 properties on the market at the moment and usually we have 25.”