Real estate agents are turning their businesses digital as they adjust to Covid uncertainty. The switch is paying off for many with Hamilton agents Lodge Real Estate selling nearly $17.5 million worth of property at online auctions during the first week of New Zealand’s level 4 lockdown.
Managing Director, Jeremy O’Rourke, said the Covid pandemic was forcing the real estate industry to innovate quickly and reassess its traditional face-to-face approach to selling property.
Agents are navigating social distancing rules for house showings by taking more video so they could offer virtual viewings. They are also holding auctions entirely online and managing paperwork digitally using programmes like DocuSign.
“This lockdown was entirely different than April last year. Buyers and sellers are much more comfortable transacting online and real estate agents have learned so much since the first lockdown in 2020 where the market became very subdued.
“I believe this pandemic is a time of reckoning for our industry. The nimble will innovate, embrace digital and thrive while the staid, traditionalists risk being left behind. If weekly print advertising and in-room auctions are still at the forefront of your business model as an agent, this lockdown needs to be a wake-up call.”
In the first week of level 4 lockdown, which started on August 17, Lodge Real Estate conducted 17 auctions online, attracting 71 bidders who offered 267 bids. The online auctions were watched by 1509 people, as a total of $17,475,500 worth of property was sold.
In total the 17 properties sold for $912,000 above the reserves.
“People are used to Zoom and Skype and Microsoft Teams. Buyers and vendors have both adjusted to it easily during this lockdown. We’re using DocuSign to manage documentation, and everyone is comfortable transacting virtually,” Jeremy said.
Agents conscious of the potential for further lockdowns were placing more emphasis on video to market properties so they could still show buyers through listings and Lodge had experienced buyers who had bought property without physically setting foot inside it, Jeremy said.
Virtual tours, 3D walkthroughs and drone footage were being used to show properties. Figures from Realestate.co.nz showed the number of listings featuring a video was up 8 per cent between April 1 last year and August 28 this year, when compared to the period from November 1, 2018, to March 31, 2020.
The figures showed video had increased in every region, except the West Coast. Southland had the highest number of video listings, with 22 per cent of listings including a video. It was followed by Canterbury and Waikato on 18 per cent, and Central Otago/Lakes District and Manawatu/Whanganui on 17 per cent.
“It’s indicative of how the industry has changed, not just from the seller’s point of view, but from the buyers’ point of view also. The digital space is something we are comfortable with now and as agents we are asking, what are we trying to achieve and convey and how does that work digitally?”
He said, however, that it was not as simple as switching what you do in person as an agent to doing the same thing online. For instance, he said online auctions were vastly different to those run in auction rooms.
“As an auctioneer myself, I find you have to constantly be thinking about the audience and understand the nuances of how everything is being viewed and heard on the other side of the screen in that online environment.
“For instance you can’t have any downtime or silence in an online auction because people will become frustrated and tune out. The auctioneer must constantly adjust and fill any gaps to create a continual, positive, fast-paced atmosphere. It’s an entirely new skillset for us,” Jeremy said.
In the last week of August, as New Zealand moved to level 3, Lodge sold a further 4 houses at online auctions, with 11 bidders placing 65 bids. The average sale price was $927,750 and a total of $3.711 million worth of property was sold.
CoreLogic released August house price data last week revealing the average house price in Hamilton fell in value by 2.8 per cent over the month, and 0.5 per cent over the quarter, to $782,774.
While there was a slowing in the market which always came over winter, Jeremy said as spring started there had been a lot of activity with people seeking pre-listing kits and requesting home appraisals.
In total Lodge Real Estate agents sold 86 houses in August with a median house price of $860,000. This compared with 124 sold by Lodge Real Estate in August 2020 at a median house price of $683,000.