As we edge towards a new decade and assess what 2020 has in store, it is hard not to look back to see how far we have come as an industry.
The past 10 years have been fascinating from the perspective of change within real estate. We’ve had the rise of proptech and a shift towards space as a service; we’ve seen pressures impacting the retail industry with the closure of numerous high street stores; and the meteoric rise of the logistics sector, responding to the new age of internet shopping.
However, one area of the industry which has been slower to transition is auctions. Over the last 10 years statistics show there has been a slow growth of average capital values, and the total volume and total value of property transacted has remained largely unchanged.
Tech improvements
According to Essential Information Group, between 2009 and 2018 the average number of lots sold at auction approached 25,000 per year. The average sales total was slightly over £4bn per annum which showed small industry growth towards the end of the decade, but nothing too substantial. In essence, the industry hasn’t significantly grown.
This is, in part, symptomatic of buyer profiles remaining the same. We see the same type of investor buying and selling via auctions. This narrow field of buyers puts pressure on sellers and, with the industry seeing less movement than in previous times, they are looking for alternative routes to market.
Thanks to the accessibility and improvements of technology, we are now in an era where digital sales provide a tried and tested method for those looking to sell property via unconditional contract. While the seller profile remains largely the same, and market conditions remain trying, digitalisation has extended the reach of local sales to international bidders, resulting in a far wider pool of buyers across the globe.
In fact, our last UK sale on the BidX1 platform saw 164,000 views from 66 countries, including Australia, Luxembourg, South Korea and Bahrain, which translated to 1,270 bids being placed.
Over the past 30 days BidX1 Ireland has seen over 365,000 views from 61 countries, and BidX1 Spain has seen nearly 500,000 views from 73 countries. We are also able to see which countries viewed particular lots.
For example, bidders from the UK viewed a property in Majorca 3,675 times, while a property in La Rioja was viewed by a party in Mexico 304 times. This is proof that digital platforms such as BidX1 can facilitate sales across the globe simply and efficiently.
Digitalisation has also enabled greater degrees of transparency and flexibility, with sales no longer having to occur on one day – benefitting both the buyer and seller. Within the past decade technology has without doubt been a serious challenger to the traditional process of marketing and transacting real estate, and I’m confident we will see it continue to gather pace throughout the next year.
It is true that transactions in property, regardless of the method, are difficult. The current landscape is fraught with uncertainty and risk, and even more so with today’s global socio-economic and political events impacting the industry.
However, data opens up a new world of understanding and as the world becomes more connected the opportunities become greater. Over the next few years I foresee digital models gaining widespread acceptance, further shifting the industry’s vision of how to transact real estate, no matter the sector.
I look forward to the next decade and what it can bring. The world of traditional auctions, one of the last outposts for digital transformation in real estate, is already being significantly impacted and it is opening some exciting doors.
Oliver Childs is head of commercial auctions at BidX1
