A Sunday Age investigation has found that many auction results are not being reported and therefore distorting clearance rates that are used by buyers and sellers to gauge market strength.
The investigation found that 27 per cent of all auction results published by the REIV in June were missing critical information – including the sale price, passed-in price or the reserve and many auctions were not reported at all.
Nearly one in five properties sold at auction are now reported to the REIV with the price marked ”undisclosed” – a significant increase from last year’s property boom, up from 11 per cent then to 18 per cent now.
The investigation also revealed that 43 per cent of properties scheduled for auction in June had no published quote range, further frustrating buyers’ attempts to obtain basic information. W
With Melbourne’s auction clearance rate slumping over the past year it seems that some agents are “forgetting” to disclose information about failed auctions. The passed-in price, vendor’s reserve price or both were withheld for 20 per cent of all properties that were passed in during the month of June.
Unfortunately agents who were doing the right thing were being disadvantaged because their clearance rates may appear lower than their competitors who withheld information.
I’m not suggesting the REIV is at fault – far from it. It can only report the information passed on to it by members and clearly it can’t force vendors to disclose private financial information.
REIV head Enzo Raimondo defended the institute’s voluntary reporting methodology, saying the ”small increase” in the number of undisclosed results did not affect the integrity of the system.
”It is not the role of the REIV to force home owners to publicly declare the amount for which their homes sell. If a person really wants to know the price for which a home sells, they can attend the auction,” Mr Raimondo said.
Minister for Consumer Affairs Michael O’Brien said the government had no plans to intervene. ”Mandatory disclosure would jeopardise the privacy of many people,” he said.
The bottom line is like with much of the property related data in the media, property investors and home buyers must be careful how they interpret it. If you’re not sure, why not get a good buyers agent , like the team at Metropole on your side.
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