Downsizing to an apartment offers numerous advantages, making it an appealing choice for those seeking a simpler and more cost-effective lifestyle.
Market Trends
Are online property auctions here to stay?
Buying a home through a digital auction took on a whole new look during the pandemic, but do online auctions have a place in the future?
Having the ability to log in to an online property auction from the comfort of your couch by raising your digital paddle transformed the property market for both buyers and sellers throughout 2020 and 2021.
While the online auction technology was available prior to the pandemic, it had been designed with the intention to cater to the odd absentee, rather than running an entire event.
When auctions were initially put on hold in the early days of the pandemic, agents quickly switched to online auctions to keep up with escalating demand. Not only did online auctions allow the property market to keep ticking, but the auctioneering platforms also enabled agents to see and engage with registered online bidders – live.
The shift to online auctions also coincided in a time when buyers had already ditched printed property mags en masse, and turned to the internet to research their dream neighbourhood.
“We’ve found that there are a lot more people staying home doing their research about the property market online. They might not necessarily come along to every auction, but they know the local area well and know what they want because they’ve researched it online,” says Real Estate Institute of Victoria (REIV) President Adam Docking.
He admits that he too was surprised by how quickly the property industry embraced online auctions, with the quick shift to online auctions almost seamless. While the pandemic's disruption caused major disruption and stress for buyers, sellers and agents alike, the move has provided an additional avenue for sellers to find potential purchasers. “The new norm will be a hybrid of both in-person auctions and online auctions from now on,” he says.
Embracing the digital age
The COVID-19 lockdowns acted as a catalyst to allow prospective buyers to evolve from online researchers to online buyers – a behaviour the public was quick to adopt.
“I was amazed that the market adapted so quickly to online auctions. It was a really smooth transition, and people loved being able to bid from their own homes. They felt comfortable instantly with the process,” says Kay & Burton Director Gowan Stubbings.
The paperwork involved in purchasing a property has also shifted online, enabling electronic copies to be sent to all parties, including the banks.
“Online auctions have made the process a lot cleaner, and one of the unintended consequences has been the fact that it’s removed the need to try and decipher the terrible handwriting of a lot of estate agents, making contracts easier to read,” Stubbings jokes.
With the adoption of the new technology, bidders were also deploying new strategies to get the upper hand come auction day. “[They] can have friends or family logged into the auction, and text each other tactics or ideas throughout the bidding,” he says.
So with this new and exciting technology, making the buying and selling process seemingly much simpler, some would say that surely this is a trend that will prosper into the future.
However, the experts aren’t so sure.
Online auctions proved popular through the pandemic - but are they here to stay? Image: Getty
Online auction caution
With any new technology comes new behaviours, concerns, and obstacles to overcome, and when it comes to online auctions - it’s a whole new ball game.
“One thing I have noticed is that buyers do struggle a bit when competing in the bidding with someone they can’t see. They can’t pick up on the body language or watch each other, which does make it difficult,” says Stubbings.
While there is always confusion and a degree of distrust with new technology, he assures potential buyers that online auctions are not a 'ploy' to ramp up property prices. “The tools we use are genuine," he says. "There’s no difference in your bidding tactics at all, because you’re bidding against genuine data. We can’t fudge anything because the system is set.”
If you are still feeling uncomfortable with bidding online for any reason, REIV President Adam Docking says that you can always talk to the listing agent and get an idea of what your options are. “We aren’t here to bamboozle or fool you," he says, "We’re here to make it as easy as possible for you to buy your dream home.”
A fad or new future?
While online auctions served their purpose during lockdowns, it may seem that digital auctions were more of a Band-Aid solution, rather than a permanent progression.
“Online auctions are useful in some circumstances, but we don’t have any online auctions booked in, which I find really interesting,” says Stubbings.
Though online auctions provided an environment where a more concentrated crowd of genuine people - who wouldn’t normally venture out to an auction - have logged to register their interest, it seems that face-to-face auctions are proving to be the preferred method of doing business.
Stubbings says that some COVID-conscious vendors have favoured online auctions, “and we’ve been very happy to take them on that journey." But at the moment, it’s all going back to face-to-face.
“Both work incredibly well, and I’d be very happy to do either moving forward.”
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia ABN 93 004 208 084 AFS Licence No. 227678.
