An article caught my eye the other day:
Auction rates fudged by failed campaigns
EMBARRASSED agents are covering up a growing failure to sell homes at auction by not telling reporting bodies about their failed campaigns.
Figures compiled by research agencies Australian Property Monitors and Residex over the past three weeks show that between 10 per cent and almost 50 per cent of auction results across Sydney went unrecorded.
The reason was embarrassed real estate agents wanting to avoid reporting of failed auction campaigns, said leading property analyst Louis Christopher, managing director of SQM Research.
"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," Mr Christopher said.
Sydney clearance rates from last Saturday were recorded at between 61 per cent and 65 per cent by leading data property collection agencies. But the true figure is far worse.
** SNIP SNIP **
APM senior economist Andrew Wilson confirmed some agents did not report their results on purpose, but denied that the market was flailing.
"Our data confirms that while there is not a boom, there is a sense of recovery," Mr Wilson said.
"Auction clearance rates are reasonably robust.
"There are spot sales and anecdotal evidence that vendors are getting better results than expected and buyers are still active and competitive."
Residex had almost 20 per cent of auction results go unreported last Saturday.
It seems that Real Estate agents are not reporting as accurately as they could be. Of course this would be of no surprise to anyone watching the number of auctions going unreported by the REIV in their weekly roundup. Some of you may remember that I have been collating their data and the number of unreported auctions is on the increase...
As can be seen on the table above the number of unreported auctions has increased from around 8% to a figure often above 12% (sometimes much higher).
May 2010 -> July 2010 - Average = 9.7%
July 2010 -> December 2010 - Average = 12.5%
January 2011 -> March 2011 - Average = 18.8%
At least on June 12th last year when the number of unreported auctions ballooned out they had good reason (long weekend), it looked like 20%+ was going to be the norm there for a few weeks over late Jan/early Feb this year.
The article points out that auction clearance rates are reasonably robust, but that was the case in Melbourne over early 2010 before we saw rates drop from mid eighties to high sixties over 3 months! Could we see a similar drop in clearance rates over April through June this year? A similar drop in percentage points could take Melbourne's clearance rates down from 66% to below 50%... not impossible given the challenges property faces at the moment.
Watch this space!