Add CategoryBuyers could be disadvantaged by a lack of transparency in digital auctions, as renewed COVID-19 restrictions once again ramp up reliance on online bidding platforms.
A flurry of Melbourne auctions were forced online in March, after Prime Minister Scott Morrison axed face-to-face auctions and open for inspections in an effort to curb the coronavirus pandemic.
While those restrictions were briefly eased, a new wave of infections has led to renewed bans across metropolitan Melbourne and Mitchell Shire, north of the city.
With public auctions and open for inspections banned for the next six weeks, more sales are expected to revert to the virtual auction format.
RELATED: Coronavirus: Melbourne vendors in pre-lockdown scramble to auction
Coronavirus: Melbourne public auction ban returns for six weeks
RBA holds but mortgage ‘rates keep tumbling’
Property Mavens chief executive Miriam Sandkuhler raised several concerning elements to online auctions that were particularly damaging to young, inexperienced buyers.
She noted the sale method was not “genuinely transparent”, given there was capacity for “abuse of fake bidding”.
Those bidding via the platforms also lost the ability to read other buyers, which added a layer of difficulty to the process.
“While I’m sure the platforms are technically okay, you can’t eyeball someone, you can’t see their face, you can’t see if they’re a genuine bidder,” Ms Sandkuhler said.
“The power of the in-person auction is also eliminated, removing the conscious impact of bidding in the hundreds of thousands, or millions of dollars.
“Data proves online bidding generates better outcomes for vendors, not for buyers.
“It’s just concerning for consumers, particularly first-home buyers.”
But Anywhere Auctions managing director Garry Giritharan said online platforms like his Melbourne-based site appealed to buyers and sellers.
“This is a shifting consumer behaviour that’s almost unavoidable,” Mr Giritharan said.
“Consumers demand convenience where they can’t physically be there, and vendors want to maximise their turnout.”
He said there was a “rigorous but simple registration process” all prospective bidders must complete, involving verification and a fraud check, ensuring the platform was transparent and legally compliant.
EYS Auctions director Fabian Sanelli said the virtual sale format could be damaging for vendors.
“Having the transparency with in-person auctions is so paramount to achieve the best price for the vendor,” Mr Sanelli said. “If I haven’t got that transparency, I can’t read body language, I can’t engage in physical conversation, I can’t be strategic.
“Online was great because it gave us another option in the marketplace, but it’s not the same.”
Mr Sanelli said attending auctions was a big part of the social fabric of Melbourne life.
“The moment you take that away from Melburnians you lose something,” Mr Sanelli said. “It’s like how we love football — you take football away from us, we feel lost.”
Realestate.com.au chief economist Nerida Conisbee said online auctions were a “fundamentally different way of selling” to the in-person equivalent.
“The whole reason you do an auction is to create excitement and generate interest,” Ms Conisbee said.
She said it would be a while before Melbourne auction levels returned to pre-pandemic levels.
“We probably would have got to Super Saturday (levels) again if we didn’t have issues with quarantine,” she said.
“Any time we see a surge in virus infections we are going to see this nervousness return. Things are looking dramatically better than they were towards the end of March, but things can get derailed very quickly.”
READ MORE: Bentleigh beauty the ultimate pad for wine lovers
Coronavirus: ‘Chronic shortage of social housing’ in Victoria
Open House Melbourne 2020: Virtual tours of landmark buildings