Why suburban onsite house auctions trump online auctions

The future of real estate purchasing has long been forecast as digital.

But conducting home purchase transactions over the internet rather than face to face is still a rare occurrence.

We know over 95% of people use the internet and apps to do their property research but the emergence of online auctions has never been widely embraced.

There are several online platforms these days where buyers can bid on properties rather than turn up to an auction or estate agent's office to sign up the deal. These listings tend to be properties that were likely more suited to private treaty, so they get a fillip via their online auction.

Being less frenetic, the bush also seems to have taken to online price per acre auctions of small farms.

Back in 2000 Di Jones Real Estate used pioneering technology to allow the viewing of its auctions live on the internet, but it was without the capacity to accept bidding, in part because of inbuilt time delays.

Within a decade inroom auctions were periodically being run by the industry in parallel with an online auction, opening up to people who could watch and make online bids.

Around five years ago we saw pure online-only property auctions - envisaged as eBay-like portals.

Dubbed as the logical transformative step, it was suggested it all was inevitable part of the online transition in the 21st Century.

Online auctions had been a proven success in other sectors – such as clothes, cars and travel. 

But it seems we are happy with the routine, structure and transparency of traditional property sales that have been relatively unchanged since the 18th Century.

Despite regulatory advancement, real estate agents - and the buying public - have been reluctant to adopt the innovative technology-enabled solution, preferring the face to face contact.

In 2015 a Lilyfield listing with $1.3 million plus hopes was auctioned online. The three bedroom terrace secured 22 bids over a three day period from three bidders.

The winning bidder paid $1,618,000, well above the reserve price. The vendor was also the founder of an auction online website.

The estate agency has since kept its preference for auctions on a Saturday morning.

There is good reason why Sydney's residential heartland loves their onsite 20 minute, pressure-cooker auctions.

Last month a three-bedroom home on Ocean Road Manly was sold by Clarke and Humel Property for $3.45 million.

There were the nine registered bidders until a dramatic pause when a 10th bidder stepped forward for registration having only inspected the offering minutes before. He was the buyer.

And two weeks earlier - also on Ocean Road - a jogger happened across an auction and successfully bid for the home.

Despite all the technological advancement, and our familiarity with it, I'd suggest the onsite ritual is irreplaceable.

This article first appeared in the Daily Telegraph.