Over the last few weeks there has been a little battle waged between the Melbourne Age newspaper and the REIV.
The Age which have raised some questions about the integrity of the collection method, the clearance rate and the number of sales reported by the REIV
As a result some people are concerned that the results published may not be representative of what is occurring in the market.
On its website the REIV had the following response:
Whilst we welcome scrutiny of the sales results collected and the clearance rate calculation, it is important that we set the record straight. The REIV provides all the sales results we collect each weekend to the media, this weekend we will collect approximately 1000 sale results. Whilst we make every effort to collect each and every sale, there are some, around four a week, are not reported to us. It has been reported that some sales are reported with an undisclosed price. The vendor has a legal right to request that their sale price is not reported.
It is important to understand there is no legal requirement on agents to report for publication any sales results; the REIV encourages members to report to us so that the public can form their own view on the market. In fact it was the REIV who started collecting and reporting both auction results and private sale results in 2004, this had not been done before. Some other companies, RP Data and APM also collect results but the REIV has the highest rate of collection which is why it is used by the media.
These results are first published on Saturday evenings on the REIV website and propertydata.com.au. They are also published in the Sunday Age and Sunday Herald Sun.
The clearance rate is available on twitter at around 6.30pm on Saturday.
Due to the need to meet newspaper printing deadlines, the collection of results closes at 5pm on a Saturday and 4pm on a Sunday. Results of auctions, which the REIV understands to have occurred, that are not received at that time are classified as ‘no result’. On Monday the REIV contacts these agencies and updates the clearance rate with these additional results on a Wednesday and produces a revised clearance rate.
The REIV is committed to providing transparent information about the Victorian property market and will continue to do so to help buyers, sellers and our Members.
How the clearance rate is calculated
Each week the REIV calculates the expected number of auctions to be held based upon the number of properties advertised for sale.
First calculated on a Saturday and then updated on a Sunday and Wednesday, the clearance rate is calculated by dividing the total of those sold before, sold at auction and sold after by the number of reported auctions.
Auctions that are postponed or withdrawn are not included because they have not been subject to a full campaign. In the last four weeks there has been an average of five postponed and four withdrawn per week. Over the same time there has been an average of four results where we have not been able to obtain the result.
Over the past seven years the REIV has adopted the same methodology for classifying results.
- Sold Before: Sold Before describes homes listed for auction but sold before the auction. Depending on market conditions around 20 per cent of all homes offered at auction are sold before auction day.
- Sold: Sold describes homes that are sold to the highest bidder at the auction or after the auction on the same day.
- Sold After: Sold After describes homes sold the day after the auction and which are subject to auction conditions. This occurs for only a few homes each week.
- Passed In: Passed In describes homes that are not sold. In this case, the buyers have not met the price expectations of the seller.
- Passed In on a Vendor Bid: Describes homes that are passed in but when the last bid was a vendor’s bid. It is a legal requirement that this information be disclosed if the result is published.
- A home is listed for auction at 3pm on Saturday.
- If the home is sold on Friday, it is classified as Sold Before.
- If the home is sold to the highest bidder at the auction it is classified as Sold.
- If the home is sold by negotiation after being passed in on the Saturday it is classified as Sold.
- If the home is sold on Sunday under auction conditions it is classified as Sold After.
- If the home is sold on Monday it is classified as a Private Sale.
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