Online, specialisation trends strengthen

SAIA

The industry has evolved, with new entrants and innovative operation strategies bolstered by the advent of technology.

The auction industry remains relatively buoyant despite the fluctuations of the economic climate, according to John Cowing, chairman of SA Institute of Auctioneers (SAIA.) He says there are more sellers in an economic downturn and an abundance of buyers and fewer sellers in an economy that is growing.

However, Cowing says fewer buyers in a tough economic climate will be reflected by lower prices, whereas more buyers in a fast-growing economy results in higher prices. At the moment Cowing says the industry is busy, though there are fewer buyers.

SAIA Director of PR and Marketing, Joff van Reenen agrees that the conditions in the industry are busy.

"We are seeing more and more private work coming through, more legal work, and more business rescue work. The best way of ascertaining the true value of a product is by public auction," he says.

Cowing says the local industry is following global auctioneering norms with the trend of specialisation particularly prevalent.

"Gone are the days of the jack-of-all-trades auctioneer. Nowadays auctioneers specialise in the asset class in which they have the expertise, experience and in-depth industry knowledge," he says.

"While there is still a place for the general auctioneer with lower valued assets, when it comes to the top end of the market, auction houses choose to be expert in a particular discipline - whether it's vehicles, antiques, art, mining and construction machinery, government and parastatal assets or property."

Another trend that is changing the face of the auctioneering industry is online auctions, which have broadened the bae of buyers and improved transparency and the audit trail associated with the digital process for sellers. Cowing says at the moment on the movable assets side of the industry, about 30% is sold online. Though live auctions are still the norm, he expects the percentage of online auctions to continue growing.

"While we are lagging online auctions in the US and Europe, all the top local auction houses already have an online auction capability. In 2004 the company that I worked for in the UK did only about 30% of its auctions online. Today, all their auctions are online and they haven’t conducted a live auction for the past five years.

Cowing says in SA, auction buyers still tend to enjoy the live auction event, so it may take time to head in the same direction.

James Dall, joint MD at High Street Auctions - which set an SA record of R96m for the sale of a Clifton residential property by the way of auction, and also sold the Kyalami Racetrack for R205m in 2014 - says the auction itself is a still a critical part of the sales process.