Don’t believe auction results that you see

by Chris Lang on March 7, 2011

Auctions getting cancelled I don’t quote the news often, but this deserves your attention. Apparently quite a few agents are not reporting failed auctions in a desperate attempt to cover up.

In News.com.au they call them “embarrassed agents” – I, however, think this act has little to do with embarrassment – when a growing inability to sell a home at auction becomes visible, it’s bad for business.

We’re not talking here a couple of isolated incidents, because according to Australian Property Monitors and Residex over the last 3 weeks agents hid from 10% to 50% of auction results in Sydney.

A leading property analyst Louis Christopher, managing director of SQM Research, said:

“We are having a very high percentage of auction campaigns going unreported to the reporting bodies, and we strongly believe those unreported auctions are actually failed campaigns”

What are they trying to hide? That the situation in the real estate market continues to be what’s called “buyers’ market” and it is getting better for buyers and worse for sellers.

The lower auction rates go, the more houses are left unsold on the market, the more potentially flexible vendors there are who failed to achieve the prices they were dreaming of, who were hard-hit by reality, and who hopefully came back to their senses.

Good luck, home buyers. You guys have waited long enough – this could be your big break. As Mr. Cooley, the director of Cooley Auctions (Sydney’s largest independent auction house) said “The great side of that is that there’ll be brilliant buying opportunities over the next quarter of the year as there’s quite a bit of property on the market.”

I hope he’s right. Do you?

{ 3 comments… read them below or add one }

home extensions melbourne March 11, 2011 at 3:33 pm

wow that a new thing that the lower auction rates go, the more houses are left unsold on the market, i might think of that and go to auction thanks for the article

Reply

Nicholas Rait March 16, 2011 at 11:24 pm

This has been going on for years. Not only do many agents not report failed auctions, but I have also seen such entries disappear entirely off the REIV’s own database.

The biggest systematic coverup however is the misclassification of private sales made after auction. In a lot of cases sales made privately in the weeks or even months after a failed auction are counted as ‘Auction Sales’.

This means that if a property sells at any point after the auction, they remove the passed in result. Therefore manipulating the clearance rate they tell the media

Clearance rate is a highly doctored number.

The higher it appears to be, the more likely people are to sell. This is a great tool for agents.

Reply

kishna gaskarth December 21, 2011 at 8:20 pm

I don’t see the reason why some agents are embarrassed to report it. That’s life, you can’t control people to buy all your products.

Regards,
Kishna Gaskarth

Reply

Leave a Comment

Previous post:

Next post: