Revealed: Why are Auckland’s property auction numbers and success rates both exceeding pre-pandemic levels?

Figures released by Auckland’s largest real estate agency, Barfoot & Thompson, show that 123 residential properties were auctioned online in Auckland’s first week of Alert Level 4 lockdown, from 14 August to 20. Although this was slightly below the previous week’s 164 auctions, 85 properties sold successfully. The auction success rate rose by 7% compared with the week before lockdown, while the rate in central Auckland reached an astonishing 86%!

Data source B&T

Last week, from 2 October to 8, Barfoot & Thompson auctioned 141 residential properties—twice the previous week’s 70, and 9 times the 16 properties auctioned in the week from 18 September to 24. This indicates that, although Auckland remains under Alert Level 3 lockdown, online auction activity has grown strongly since the arrival of spring. The auction success rate reached 77%, almost unchanged from the previous week. This means online auctions have a much higher success rate than in-person auctions did before lockdown!

Data source: B&T

Despite strict lockdown measures and the first OCR increase in seven years, why are both Auckland’s property auction numbers and success rates exceeding pre-pandemic levels? Technology deserves much of the credit—

Last year, after New Zealand first entered Alert Level 4 lockdown, Barfoot & Thompson launched an online auction platform, greatly reducing lockdown’s impact on in-person auctions. This year has been no exception: after the move to Alert Level 4, many open homes were cancelled and in-person auctions moved online.

How do online auctions differ from in-person auctions? Does securing a property come down to quick reactions, luck or skill? With these questions in mind, YIJU interviewed several real estate agents who have recently been helping clients participate frequently in online auctions:

Lily Zhang from Barfoot & Thompson’s Browns Bay branch, Gavin Han from its Mt Albert branch, Sue Ma from Panmure and Kitty Long from Highland Park.

Q1: Could you briefly describe a recent online auction you took part in that particularly stood out?

 

Lily Zhang：I recently sold a property online with excellent development potential at 26 Kaipatik Road, Glenfield. The 840-square-metre site is in a zone allowing townhouses and apartments. Its CV was just $900,000. Bidding opened at NZ$1,500,000, and after 38 bids it sold for NZ$2,080,000, far exceeding the vendor’s expectations!

26 Kaipatik Road Glenfield

 

Gavin Han：A single-level brick-and-tile home at 55 Espalier Drive, Henderson, on a 401-square-metre site, with three bedrooms, two bathrooms and a double garage, was auctioned during Alert Level 4. There were 10 registered buyer groups and more than 40 bids. It ultimately sold for NZ$420,000 above CV. Both the vendor and I were very happy with the result!

55 Espalier Drive Henderson

 

Q2: How do you think online auctions differ from in-person auctions?

Lily Zhang：Communication and managing the process are more difficult online than in person. Buyers and vendors are already nervous at auctions and often unfamiliar with the procedure. At an in-person auction, for example, you can see how many groups are competing and have a better sense of control over whether to bid. Online, bidding and the overall process are harder to manage. Some buyers really want a property but sit at their computers without raising their hands, and we cannot tell what they are thinking. Some even try to increase their bid just as the hammer falls, sadly missing out on the property they want. So I encourage everyone to bid actively for a property they like, even from behind a screen.

Online auctions are also more demanding for agents and take longer than in-person auctions. During the auction, agents need to make repeated calls to buyers and vendors separately. A single client may require more than a dozen calls.

Sue Ma：In my observation, the biggest difference between online and in-person auctions is convenience. Genuine buyers can bid from anywhere without attending in person, while prospective buyers watching can follow the auction at any time and make their decisions.

Q3: What should vendors prepare before an auction? What do they expect from an online auction?

Lily Zhang：Before an auction, I recommend that vendors have an in-depth discussion with their agent. They need a clear understanding of market feedback on the property and how many buyer groups are competing, and they should decide what price they have in mind. Before entering the auction, they should agree on a specific plan with their agent: their bottom line, the price range they would consider, and the price they would be happy with. Having chosen an agent they trust, vendors should explain their expectations in advance—the earlier, the better. At an in-person auction, the agent can explain things on the spot. Online, the agent is not beside the vendor, and the vendor cannot see the reaction in the room, creating more uncertainty. Vendors therefore need to think these matters through beforehand to avoid making a poor decision during the auction. Agents also need to communicate with buyers in advance to work towards a good result. Overall, online auctions require more thorough preparation from buyers, vendors and agents alike.

Sue Ma：Vendors selling online need to use our company’s platform. As agents, we help owners throughout the process. Our expectations are the same as theirs: to use the convenience and reach of online auctions to find a genuine, unconditional buyer at a suitable price.

Q4: What advice would you give prospective buyers about to participate in an online auction? What preparations should they make?

Gavin Han：I suggest buyers watch several online auction videos beforehand to familiarise themselves with the whole process.

Next, arrange bank loan approval and have a lawyer review the documents. Third, it is best to register on the auction platform in advance and agree on a contingency plan with the agent—for example, how to contact them immediately if your internet connection fails.

During the auction, use a pen and paper to note your bidder number and each bid, and keep track of your competitors’ bids. If you are successful, you will sign electronically and pay a 10% deposit online.

Lily Zhang：As a buyer, you first need to understand the market feedback on the property you want. I recommend checking sales records for more than ten similar properties nearby, excluding the highest and lowest prices, then calculating an average price range. Buyers should also set their own expectations: what price they would consider and when they would stop bidding. Going twenty or thirty thousand dollars above or below the price you have in mind is understandable. If you find a property that suits you and that you really like, try not to miss out. My advice to auction buyers is to set realistic expectations and bid actively.

Also, because an auction is an unconditional sale, you need to have the property’s contract thoroughly reviewed before bidding. The deposit, settlement date and loan pre-approval all need to be arranged in advance.

Kitty Long：My advice to buyers participating in online auctions is:

1. Download the Bidder Auctions Live auction software in advance;
2. Ask the sales agent to explain the operating steps clearly;
3. Also sign a telephone bidding authority in case circumstances beyond your control prevent you from bidding online; 
4. Stay calm, make decisions quickly and react promptly;
5. Fully charge your phone or tablet, and ideally have a spare phone available so you can contact the sales agent promptly.

If a buyer requests changes to the auction contract, such as the settlement date or deposit amount, the buyer and vendor need to sign a Variation Form in advance to confirm the new agreement. Whether the auction is online or in person, vendors still hope for as many buyers as possible to participate, allowing competitive bidding to achieve the best possible sale price.

After reading these leading agents’ first-hand accounts, those of you looking to buy must be eager to try an online auction! Let us show you how Barfoot & Thompson’s hugely popular online auctions work.

 

Step one: Register for the online auction of a property you are interested in

Visit https://www.barfoot.co.nz/auctions-live/upcoming, find a property you are interested in, then click the auction buyer registration button and enter your details, including your email address and password.

Step two: Download the Auctions Live bidder APP application

Download the bidder app to your smartphone or tablet. It works on Apple and Android devices. Remember your login email address and password.

To download the app, click https://auctionslive.com/auctionslive-solutions/auctionslive-apps

Step three Obtain authorisation to bid

Once online registration is complete, the system will determine whether the registered client is legally eligible to bid and authorise them accordingly.

Step four Use the APP to bid at the auction

During the auction, once you enter the amount you wish to bid, the system will quickly tell you whether your bid has been accepted. The auctioneer and app will let you know when to start bidding.

If you have any questions about online auctions, contact a B&T real estate agent, who will provide the help you need:

https://www.barfoot.co.nz/find-us/find-a-salesperson

Want to know more? We have compiled some frequently asked questions about online auctions that we hope will help:

 

Q: Is online bidding the only way to participate in an auction?

A: During Alert Level 3 lockdown, buyers can choose to bid online or by telephone.

Q: Who can bid during an online auction? 

A: Anyone who has registered online and been approved can bid. The convenience of this technology is that you can bid wherever you are—even from anywhere in the world! Please note that restrictions on overseas buyers and anti-money laundering (AML) regulations still apply. Auctions take place in our New Zealand time zone.

Q: What if I make a mistake while bidding?

A: Do not panic! If you have placed a bid and wish to withdraw it, press the ‘Retract Bid’ button. If you have entered an incorrect amount but have not submitted the bid, press the reset button and enter the new amount you wish to bid.

Q: English is not my first language. What should I do if I cannot understand what the auctioneer is saying?

A: Barfoot & Thompson staff speak more than 50 different languages across more than 75 branches. If you need interpreting assistance, please let us know. We will be happy to provide this service by telephone during the auction.

Q: Can a salesperson bid on my behalf?

A: Yes. We recommend discussing telephone bidding with your real estate agent.

Q: I have won my auction - what happens next?

A: Congratulations! Your agent will contact you shortly to complete the contract and arrange payment of the deposit and other matters. The auction documents will be sent to you for signing. Remember, all bids submitted through Barfoot & Thompson’s online system are legally binding.

Q: If I am the successful bidder, how do I pay the deposit?

A: Before the auction begins, the real estate agent will explain to all prospective buyers how to pay the deposit if they successfully purchase the property. Please ensure the deposit funds are available in your bank account. Note that banks may have daily transfer limits.

Q: Can I change my mind?

A: You can withdraw your bid before the virtual hammer falls, but once the property is sold, you cannot. After the hammer falls, it is too late for either party to change their mind, because auctions, including online auctions, are legally binding. Once a sale is deemed final, we cannot reopen bidding.

Q: Can I still arrange special conditions?

A: Yes, but these must be agreed to by the vendor and confirmed in writing before the auction begins. Please discuss this with your real estate agent.

Q: Can I negotiate with the vendor after the auction?

A: No. All final auction sale prices are legally binding and cannot be changed after the auction.

Q: Can I make an offer before the online auction?

A: Yes. Salespeople and vendors welcome offers before the auction.

Finally, we wish you every success in securing your ideal property at auction soon. Here’s to celebrating!

 

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In Auckland, 1/3 of home sales are through Barfoot & Thompson, 

far ahead of every other real estate agency.

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