Auction clearance rates across Australia over the weekend dropped to record-lows, one week after the government introduced a ban on public gatherings of over 10 people, forcing realtors to go virtual.
In Sydney, clearance rates hit just 37 per cent, down from 58 per cent this time last year, with around 547 properties withdrawn from auction.
In Melbourne, clearance rates dropped to 35 per cent from 52 per cent this time last year, while Brisbane and Adelaide dropped to just 20 per cent, from 34 per cent and 52 per cent respectively this time last year.
According to SQM Research managing director, Louis Christopher, the last time Sydney and Melbourne hit these figures was in July 1989, when they dropped to 33 per cent.
But chief economist at REA Group, Nerida Connisbee, said the figures may not be what they seem.
“Clearance rate data was all over the place this weekend,” Conisbee told Yahoo Finance.
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The main reason being that while on Wednesday, Sydney had 1,000 auctions scheduled for the weekend, by Saturday, this figure dropped to just 350.
“The data was all over the place,” she said. “There’s no doubt the market has been hit, but I don’t think the clearance rate gives a good indication of what happened.”
What actually happened, Conisbee said, was that people moved to other forms of sale.
“At this stage what seems to be happening is that people are moving to private sale, sale by tender, they’re drawing on inquiries made on the property - there’s a lot of phone calls taking place at the moment.”
And auctions are going to be left behind.
“We’re not going to see many auctions taking place over the next month, instead we’ll see people selling by more traditional means.”
Conisbee said rental listings had picked up as a result of the coronavirus pandemic, but the seller market was different.
“We’re seeing quite a lot of distress in the rental market, but we’re not seeing distress in the seller market at this stage,” she said.
“It is likely to impact the number of properties that go to market.”
Realtors go virtual
As coronavirus hits the housing market, property firms are introducing other means for buyers to access properties.
“We’ve gone from having very standard ways of selling a home, you had open inspections, auctions taking place - it was a process that people went through - and it’s changed,” Conisbee said.
REA Group launched its Digital Inspections’ feature last week, which allows agents to use videos and showcase listings to potential buyers who can’t attend in-person inspections.
“We want our customers and consumers to know that the property market is still open for business and we’re doing everything in our power to support them and the long-term success of the industry,” REA Group Chief Sales Officer, Kul Singh, said.
But Singh, who noted a drop in search activity on the site, said some things could change as a result of the virus.
“It may become more commonplace for agents to use expressions of interest and private treaty methods to support buyers and sellers as an alternative to traditional auctions,” he said.
Another firm, Upside Realty, launched virtual tools too.
“It’s of utmost importance that government social distancing measures are implemented, and the industry needs to adopt quickly,” CEO Adam Rigby said.
Rigby said agencies needed to start thinking about how they can respond in a way that won’t impact upon the service they provide for their clients.
“We are now providing the option for our buyers and sellers to communicate virtually with their agents over digital devices for any real estate services they require,” Rigby said.
So far, the firm has introduced remote property appraisals, virtual client meetings as well as virtual open inspections.
“All agencies are being forced to innovate in one way or another, with working from home, no public open for inspections and no auctions impacting the entire industry,” Rigby said.
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