Cashed-up home buyers are shelling out large sums for top-end homes during the lockdown as the market shifts to online auctions.
Unlike the last lockdown, pent-up buyer interest has meant significant demand for properties selling under the hammer as auctioneers livestream from their lounges.
New Zealand Sotheby’s International Realty Rotorua principal and sales associate, Shona Duncan, said there had “absolutely” been an increase in online auction sales this lockdown.
“Our central region auctioneer has sold properties under the hammer this week alone with prices ranging from the $500,000s to well over the $1m mark.”
A total 88 per cent of level 4 remote auctions sold under the hammer with sale prices ranging from 37.4 per cent to 70.8 per cent above rateable value, she said.
Duncan said bidding registrations had been lodged “right across the board” with first-home buyers successfully purchasing under the hammer this week as well as a “flurry of investors” returning to the market.
“We’ve continued to see local buyers engaging, and bidders from Auckland and Wellington have registered for auctions this week to bid on properties valued over the million-dollar mark.”
Duncan said the ability for buyers and sellers to watch the livestream enhanced their “remote” experience.
“A lot of people would still prefer to be there in person so that they can see their competition, but this is a great plan B.”
The technology was not in place during the first lockdown. Duncan said they moved quickly to future-proof themselves, including implementing technology to be able to livestream auctions.
“We’re just getting on with it.”
Duncan said this lockdown had been “business as usual in a slightly unusual way”.
“Right across the country, we’ve seen auctions are being conducted utilising live streaming technology and results have been phenomenal.”
OneRoof editor Owen Vaughan said there had been a “huge” number of online auction sales this lockdown.
“Buyers are willing to make big offers on properties selling for premium prices, which indicates unlike last lockdown Kiwis are determined to buy and are not fazed by virtual auctions and don’t need to be in the same room to make purchases.”
Real Estate Institute of New Zealand data shows only six out of 134 properties sold in the Bay of Plenty via auction under alert level 4 between March 25 and April 27 last year.
Four of 70 sales in Tauranga City sold via auction and none out of 25 sales in Rotorua in the same period. Data relating to the latest lockdown was not yet available.
REINZ chief executive Jen Baird said despite the Covid-19 Alert Level 4 lockdown a “sense of confidence” remained in the market this time around.
Baird said real estate professionals put in place new ways of working during the 2020 lockdown.
“This has resulted in a quick move to well-tested ways of working and, anecdotally, more activity when compared to the alert level 4 lockdowns of 2020…
“With all the technology available, it is becoming easier to do large parts of the real estate transaction remotely.”
Properties sold by auction since last Tuesday were likely to have had open homes and viewing opportunities pre-lockdown so buyers have probably been on site.
“Auctions are being effectively called online for currently listed properties, with the deal being finalised by the digital signing of electronic sale and purchase agreements.
“Parties should be seeking legal advice to ensure appropriate clauses are included to address purchasing remotely and how conditions/settlement will occur.”
Simon Anderson, managing director of the Realty Group Ltd, which operates Eves and Bayleys, said they had had “exceptional” auctions in the past few days.
Two Mount Maunganui properties sold for $2.4m and $1.5m respectively and a Katikati property sold for $1.3m this week. One Katikati property attracted 149 bids.
Anderson said they were better set up for online auctions this lockdown, with auctioneers calling from their living rooms taking bids via agents on Zoom who were communicating with buyers by phone.
“Last lockdown a lot of auctions were postponed or pushed out and we didn’t have the live stream capability to call the auctions.
“This time there is a lot of pent-up buyer interest going into lockdown and that interest has continued.”
Tremains Bay of Plenty managing director Anton Jones said a Tauranga property sold for above $1m via online auction this week.
Jones said auctions could continue in lockdowns if vendors were a few weeks into their campaign and buyers had the chance to view the property beforehand.
“You can’t really auction anything people haven’t seen. It is a hard ask to do auctions if you haven’t been there.”
Since the last lockdown, Jones said the company had made filming all auctions common practice. “That part of things will become the new norm for us.”
Live from the 'auction lounge'
Will Johnston has auctioned his first properties live from his living room.
A television, a sign, a lectern and his lounge were all he needed to “mimic the auction room” as best he could.
“It was definitely not how I saw my first auction going,” he joked.
“I don’t often get nervous but, I am not going to lie, there were a few nerves there.”
Johnston signed off as a radio announcer for The Hits Bay of Plenty show in Tauranga after two decades in the radio industry in June to become group auctioneer for Tremains Bay of Plenty, New Zealand Sotheby’s International Realty Tauranga and Colliers International Tauranga.
“You can’t see the people who are bidding so you can’t see how they are reacting. That’s a big part of auctioneering is being able to feel the vibe of the room and react to it.
“It oddly felt a bit like being back in radio.”
Johnston also said he had been filming auctions on his phone and using his wife’s phone as the “auctioneer hotline”.
“I’ve given way too many agents my wife’s phone number for my liking,” he joked.
But Johnston said it had been great to see how well people had adapted to the online auctions.
“Everyone has got on board with it. People are now experiencing the happy result of being able to say they bought a property from their lounge in lockdown.”
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