Almost 2600 on-site auctions had been scheduled around the country this weekend.
All are now being cancelled.
Those with properties listed for sale will either withdraw, or pursue private or online sales methods.
Weddings, funerals, social and family gatherings, and recreational activities of certain sizes were also on the banned list.
“Real estate auctions and open house inspections – in particular, open house inspections – that cannot continue,” Prime Minister Scott Morrison told the nation following a cabinet meeting overnight.
The timing of the news is a sharp blow for the industry.
“We knew this was coming, but it’s a shame that it’s happened right now – it’s the two busiest weeks of the year, where we have the most amount of auctions,” Damien Cooley, Managing Director and Auctioneer at Cooley Auctions, told 9News.
Real estate agents and auctioneers may have to adjust their fees to reflect the latest change, but were quick to reassure that properties will continue to be bought and sold despite the lockdown.
Melbourne is the city most heavily-geared toward auctions – this weekend it was due to have 1348, compared with 983 in Sydney, 120 in Brisbane, 63 in Adelaide and 13 in Perth, according to data from Domain, which is part-owned by Nine.
“[The announcement] will completely change the process in the way that auctions are conducted,” president of the Real Estate Institute of Victoria, Leah Calnan, told 9News.
“There are a large portion of real estate agents that are prepared to make the transition across to technology and digital sales and auction processes, and the others will need to learn quickly on their feet.”
How buyers will be impacted by auction cancellations
Buyers can expect to be scrutinised about their readiness to buy, according to buyers advocate Nicole Jacobs, but should know the advantage has shifted in their favour.
“Agents might decide they won’t take you through (the property) unless you’re finance-ready,” Ms Jacobs said.
“You have to have driven past the property to see the location, if that ticks a box, then you have to look at our 360 degree, room-by-room inspection, and then make an appointment.”
Buyers and vendors are both pulling back amid the uncertainty, but those keen to buy should be driving a hard bargain.
“Some understand that this is an opportunistic market now,” Ms Jacobs said.
“We don’t have to factor in that high emotion level, because people are just wanting to sell.
“I can’t see flyaway auctions – because people aren’t standing out the front and getting emotional.”
Are properties going to be discounted?
“You’d be naive to think that they won’t be,” Mr Cooley told 9News.
“Any vendor that proceeds with sale are keen to sell.”
How does an online property auction work?
Two main types of online auction will be seen, according to Damien Cooley, who sees the change as “the future of real estate”.
How do live-streamed auctions work?
“The auctioneer is being live-streamed and viewed by registered online bidders,” Mr Cooley, said.
“They would bid as they would in a normal auction environment, and those bids are communicated to the auctioneer via the AuctionNow platform… we can accept or decline those bids exactly the same way as we can in other auction scenarios.
“The majority of auctions that we have booked in right now, that’s exactly how we’re going to run them.”
How do times online auctions house work?
An auctioneer virtually oversees the auction. It has a start date and end time.
The auctioneer can control the bidding increments, electronically from the back-end.
“For example, the auctioneer might say ‘we’re only taking $10,000 bids at the moment,'” Mr Cooley said.
For the auction to end, there must be no new bids within the last five minutes. Any bids placed in the final five minutes would trigger a small extension to the deadline.
“Both options will become more relevant in our industry. This is the catalyst for many real estate agents to become a digital,” Mr Cooley said.