14/10/2021
Breaking 'Property Market' News!...
Please start to see the 'Warning' signs... I advise people to be very careful about this property market. Start looking for the signs each week in current auction results which may show a market beginning to form some cracks.The real estate agents and media are simply telling us what has sold. The properties that are not selling at auction are not reported. This distorts the results to the public, and will ultimately alter our perception about the so-called “booming market” and what's likely to occur in our property markets in 2022... It’s something the banks won't tell you, the media won't tell you, and the real estate agents certainly won't tell you (and Domain.com and realestate.com.au don't publish the real auction results) because it does not help any of their bottom line Profits!... The facts and auction results are as follows:
Every Saturday news reports across Australia have “auction clearance rates” at or around a booming 85%.
But, the truthful results are that up to 30% of the auctions scheduled are either withdrawn or did not sell, and those are simply not reported by the real estate agents to the media (probably because the estate agents do not want to report all their failures). Unfortunately for the general public these results are not included in the total numbers of properties scheduled for auction.
The report shows 611 scheduled for auction, but only 441 reported, 47 withdrawn, 377 sold, and 17 passed in. Applying the 377 sold against the 441 reported gives the 85% clearance rate quoted. However, 377 sold against 611 scheduled is a clearance rate of just 62%. With 441 reported, 47 withdrawn, and 17 passed in, what happened to the other 106 that were scheduled?
If the agents included the properties that did not sell, we would have a very different marketplace and auction clearance rates would be in the 60% range - the perception of what suburbs are actually booming would be very different.
If the real estate agents, Domain & Realestate.com.au and all the other media news reports would just simply publish the real auction results and report the truth about the auction clearance rates, then the property consumer would be better informed. This includes people looking to buy or sell in the marketplace, who base their decisions on the misinformation in the media.
Buyers and sellers must start to read between the lines with the auction results in the media and in news reports. Only a small percentage of the auctions are actually selling under the hammer on the auction day. The majority of the auctions are selling prior to the auction day probably because they have limited numbers of buyers for the property.
Otherwise the real estate agents and owners would go to auction to create more competition and push their sale price up. However, the sold-prior-to-auction result is included in the overall list of auctions selling on the day.
Take for example the two prestigious Sydney suburbs of Manly and Mosman. Both suburbs recorded on the weekend auction sales of virtually 100% and every auction listed sold prior to auction? And no list of any other properties that were withdrawn or passed in? If the property market is booming, why sell the property prior to auction? Unless, the real estate agents have only one real buyer for the property!
So don't let the “truth get in front of a dollar.” Property buyers and sellers need to know and to be aware that auction results are being manipulated by the real estate agents in the media to paint a picture that looks so much better than it actually is.
Robert Klaric, CEO and Founder, The Property Expert International
