Post lockdown, online property auctions will be increasingly popular in South Africa
With property markets around the globe significantly impacted by the Covid-19 pandemic, online auctions are proving increasingly popular among buyers and sellers of properties across the various sectors of the market, says MC du Toit, CEO for BidX1 South Africa.
“While the lockdown has brought some changes and enhancements to our model, being an established online auction platform has allowed us to continue trading despite the difficult circumstances. We've even seen an uptake in buyer interest and activity, including more cash buyers, as well as more people viewing properties online and even purchasing unseen. This includes a property in KwaZulu-Natal which recently fetched R1.02 million from an opening bid of R800 000.
“In South Africa, we are receiving bids from across the country as well as internationally from America, the Netherlands, Dubai, Germany, Singapore and Nairobi. Globally, BidX1 has been able to transact and sell properties in Spain, Cyprus, Ireland and the UK to buyers from around the world.
"It's not business as usual right now, but those businesses with an innovative, tech-focused approach to property transactions will remain at the forefront of the property industry post-lockdown. We believe that auctions, and especially online auctions, will become the most effective method of sale for any property.
“The fact is that technology has never been more important for our industry, enabling more agile and secure ways of working while still delivering results for our clients and bringing investment opportunities to the market.”
Du Toit says that the online auction method has gained traction both globally and locally, resulting in sales being concluded quickly and with no strings attached - namely, no restrictive conditions.
"At our most recent auction, a one-bedroom apartment in Century City, Cape Town, with no reserve price, drew 25 bidders, finally selling for R1.46 million – a fair, market-related price, and actually more than was expected given the uncertain situation.”
Du Toit’s advice to sellers is to consider fair offers, with the best offers being unconditional. “I would advise against listing a property at a high price and then negotiating down; it’s more effective to list the property at a competitive opening bid and get buyers involved. If this is done correctly, the seller will achieve the best result.
“For buyers, savvy property acquisitions are good investments – more so than ever in the current volatile economic environment.
Instant Online Offers
"Our platform also facilitates direct offers before an auction date has been set. This is via the ‘Make an Offer’ button on each property, which allows buyers to make offers immediately. Should buyers make a fair offer before an auction date has been set, the property does not need to go to auction and can be sold immediately through the platform. This is a user-friendly property marketplace where buyers and sellers can transact effortlessly.
“These immediate offers are becoming increasingly popular, a trend we expect to continue post-lockdown. We are seeing brisk activity in the private sales market and sellers enjoying increasing success, with unconditional offers presented. As with auctions, this transparent method of online sale allows the seller to determine the true market value as buyers are competing against each other for the property.”
Du Toit says that naturally, buyers want to transact at a price level where they feel comfortable. “On the BidX1 online platform they can do exactly that. Whether via private treaty or auction, they can see all other bids as they come through. While it is a bit early to predict buyer sentiment post-lockdown, we do know that serious buyers are willing and able to transact.
Advice for Buyers & Sellers
Adds du Toit: “Price has always been determined by demand and supply. My advice to both buyers and sellers is that the best way to determine a fair value on a property will certainly now be auction.
“For motivated sellers, we provide valuable data that they would not normally have access to, which will assist them in making informed decisions. This is more important than ever, as comparative sales are no longer a reliable way to determine the value of your property. Instead, the value will need to be determined by interest and competition.
“This is why we emphasise transparency and information. If all the information is available to buyers and sellers, the decisions they make will be informed, and not just based on a sales pitch.”
The latest properties for sale in South Africa are available to view here.
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