The goosing of auction clearances

Never trust real estate agent (or a media company). News:

And Domainfax:

 

Never talk down the market.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. reusachtigeMEMBER

    Fake news. Auction clearance rates are very sound. Proper go-getting Aussies know this to be true. Only losers think otherwise.

    • proofreadersMEMBER

      Absolutely. Every smart real estate agent (which means all of them) knows that success is guaranteed by throwing in an invite to one of your relos’ parties.

    • Hi reusachtige,

      Initially I wasn’t sure if your comments are intended to be ironic or uplifting, however in the end I understood that it really depends on the readers’ perspective – in a basic sense whether they are bullish or bearish the market. The art of balance.

      • Reusa is full bull with a heavy dose of sarcasm and a topping of irony.

        Enjoy his comments but not his relations. Nobody knows where they have been.

  2. Barnabys Left Bollock

    Encourage you all to look for it in your local results… and look at that celebrated Damien Cooley spiv’s Twitter account.. he openly admits that the results not reported are those that DID NOT SELL.

    Its a cover up for whats really happenning.

    Spook the horses!

    • Lol at the fact that nobody has ever run a sanity check on the sales data to identify dupes.

      Surely now it is just a matter of a few months until Australia emerges as the world’s leader in AI, data mining and big data and other science sh!t because we’re bloody brilliant and innovation revolution ™(r)(c). probably just need the corporate tax rate to go to 20% for that VK Calais to hit peak awesomeness.

      • I once raised this very issue with the Courier Mail — am still waiting on a response 5yrs later.

        No doubt they are keen to rectify the issue and will get round to it when time permits ..

      • With a strange feeling of deja vu, I went to this property’s auction back in 2013 when it was being sold by the bank on behalf of the mortgagee.
        Bidding opened at $650k and all the auctioneer heard was the sound of crickets….. and the quiet breathing of the 15 people there.
        Then he said any offers? any offers at all…? and a guy said $550k. The auctioneer gulped, looked rather distressed and passed the property in.

        Two weeks later it showed up in the local paper as “sold at auction” with me crumpling the paper up in disgust and saying bollocks! I was there, it didnt sell for sh*t and this is a bunch of lies.

        Now, five years later, its been heavily renovated and fully fluffed with all the show furniture in place.
        The rental history has gone from $850 to $750 to $650 in 2016. The current average in this neighbourhood for a 3 bed house is $585.

        Apparently the bidding this time will start at $650k, the same as 2013. Like I said… deja vu

        https://www.realestate.com.au/property-house-nt-stuart+park-127598214

  3. Will not fix, working as intended…

    To be honest I’ve seen this a lot also, I recall seeing properties in Reservoir listed in clearance rates as “sold” and then a week later it’s showing as still for sale. But I see this ALOT. There is a lot of manipulation of results going on.

  4. And I always thought 853 auctions listed, 560 reported with 398 sold giving a clearance rate of 71% was an accurate representation of reality and statistically sound.

  5. Does anyone care ?

    If clearance rates are 100% or 0% does it reflect anything but the discrepancy between buyer and seller expectations ?

      • correct. but funny as clearance rates are presented as if they are improving and in positive light by the msm while prices are falling. yes, there will be few fools that will bid high because of the spin, but overall, when there is no competition there can’t be price growth. It will be even funnier if price falls accelerate once CoreLogic releases their data on Friday.
        Has anyone picked any MSM article that Syd entered YoY negative growth?

    • Not really. There is not much meaningful you can extrapolate from the results for many reasons:
      1) Its not regulated, check or controlled
      2) Its manipulated as you can see in the article
      3) Doesn’t reflect for sale listings
      4) Doesn’t require full reporting including sale price and when, and how it finally sold.

      • Unfortunately none of those points are mentioned when these figures are trotted out in the MSM to indicate the state of the property market.

    • The property industry cares enough to put time and effort into falsifying the results. They obviously care quite a lot. Why do you think that is?

      • They care enough to extract auction fees from vendors. High clearance rate is a way for them to con vendors to go to auction.

      • It creates an artifical demand and makes it appear the high asking prices are justified.
        The volumes are also a sign of whether its a buyer or sellers market. Life is easier for RE agents in a sellers market.

    • Domino effect incoming.

      Big construction company goes bust. So subbies go unpaid and go bust. Then businesses that rely on subbies go bust.

      Jobs lost every step of the way. Next – people without jobs can’t pay the mortgage. Mortgage defaults and forced sales. House prices fall further. Which means more construction projects do not sell or are halted.

      Which means…

      Another big construction company will go bust.

      Vicious, accelerating cycle. Timberrrrrr.

    • @Breton
      Thank God Melbourne is isolated from WA with 3406.4km buffer and another state in between so the debt, housing, building, bank, rent income, mining collapse etc can’t touch this!!! Yay

      • I’ll see your ‘No More Shall We Part’ and raise you a ‘First Born is Dead’

        Distant thunder rumble. Distant thunder rumble
        Rumble hungry like the Beast
        The Beast it cometh, cometh down
        The Beast it cometh, cometh down
        Melbourne Bound.

      • If we are going to have a Cave anthem to the property crash I’m going back a little further to Dead Joe off Junkyard.

        welcome to the car smash
        welcome to the car smash
        welcome to the car smash
        a-a-a-a-a-smash
        Dead Joe
        Junk-Sculpture turning back to JUNK
        Junk-Sculpture turning back to JUNK
        Junk-Sculpture turning back to JUNK
        ju-ju-ju-ju-junk

    • Classic hubris behaviour – when repercussions of one’s actions are abrogated, one ignores the limits as a matter of course. Then, you have the next generations which have not experienced anything but lack of repercussions. That’s when the good stuff starts really happening.

  6. pyjamasbeforechristMEMBER

    Could be legit depending on the individual reasons.

    Eg put up for auction > sold > reported as sold > sale falls through > re put up for auction > sold

    If it’s only 3 then thats pretty small impact and likely the legit nuance that can occur.

    If it’s high no. Then I’d raise an eyebrow

    • I check Melbourne results a lot and I’ve seen this behavior a few times, didn’t think too much of it, thought maybe the odd ball 1 or 2 reported as sold or often included in clearance rates when sold prior to action etc.. but it seems there is a systemic problem. The rates are really in the high 40’s to low 50’s range in my opinion.

      • Exactly right Gav. Start sending your findings to Louis and Lindsay David on Twitter. Louis hates spivs passionately and is a decent voice for change in RE

  7. It is just beyond belief that this is not investigated by ASIC etc – it is CLEAR financial deception, as clear as day.

    • @Sam
      No one is invetigating anyone or anything. After a visit to Binnies (predictive text – Ha Ha) and Davis in Altona I reckon ACCC or ASIC Or whoever oversees their charity status should investigate their extortionate pricing model. Retired 50 somethings retired on home winnings and equity maaaate doing their bit by volunteering at said charities and bringing inflated, overvalued, shiny mentality with them. Is nothing sacred? Nothing escapes housing scourge in Oz. Disgraceful! And Shameful never back of donated goods and & goodwill.

      • That would be Vinnies and Salvos!
        Sorry cracked iPhone screen & auto correct or some demon in my phone twisting my words. Urrrrghhh!!

      • TailorTrashMEMBER

        Was commenting in that exact observation the other day ….shocked at the prices last time I had a look in Vinnies …..given the stock is acquired free ( collection and processing costs aside ) …………..still the ceo who brought “a proper business approach “ to it needs to collect his fat Salary ……

    • Sam, it’s the authority of who issues real estate agent and agency licences. State by state difference. Department of fair trading. Then there are franchise agreements that would forbid it.

  8. A sure sign the property market is weaker than it seems. Goodness know how this sh!t show will turn out once the next global downturn hits and the party really gets started. Be careful what you wish for we might get a housing and immigration crash simultaneously and when we wake up the place will look like Brazil

      • I’m sorry, but the only way we can imitate Brazil is with poverty and overpriced essentials.

        There ain’t no transforming them local Bogan Fe-Whales into anything like Mulato Moisties.

        Edit: there might be a TAT-related exception, but probably not enough to move the needle.

    • A sure sign the property market is weaker than it seems

      Annualising the qoq figure, Sydney is falling 10% p.a. That’s already pretty weak.

      we might get a housing and immigration crash simultaneously

      The property boom is one of the prime pull factors for people to come here – it seems virtually assured that if there’s a true house crash, an immigration crash will follow.


    • What will bring the house down eventually

      What do you mean eventually? Sydney is already falling at an annualised rate of 10% p.a. How much faster do you think it can fall?

      • Well we currently have low unemployment and some economic growth. So under those circumstances – not much faster.

        But if those two things change – then much, much faster.

      • I guess it’s fortunate that the fact of falling house prices rarely influences overall economic growth or demand for labour.

  9. Only the tip of the iceberg ! Just about everything to do with agents is fake. Look out for those “under offer” properties that have no offer, and mysteriously come back on the market as a newly listed property weeks later. Where’s the regulation that governs “Offers” ? How do you even know if an agent has a genuine written offer ? They can say and do whatever they like to pressure you or create a sense or urgency into making an offer. Every transaction and auction should be cleared externally from agents. Real estate agents need a good shake up, just like what happen to cab drivers in Victoria. Its just one big rort !

    • +1. Correct William…..and it gets more complicated and/or corrupt because under private sale conditions people have a 5 day pulling out (cooling off) period after contracts have exchanged. So when Domain lists a property as sold it can reappear 30 days later under another agent, but still remains as sold on the Domain sold-site a month prior. It’s also frustrating when agents don’t provide you with other written offers; agents often conduct “shadow-auctions” and invent other fantasy-offers just to get you to increase your offer…..don’t fall for this agent-trick by offering more…walk away because every sale you lose, you are actually winning (making money). In our current declining market, any offers I give, only last 48hours….then I walk.

  10. According to published Core Logic auction results in Melbourne, between 17th February and 24th February had 26 reported duplicates.
    Since 21st October 2017 there have been 267 Duplicates.
    Goosing indeed

  11. @gramus
    They would never think to cover their tracks because it would never occur to them to follow tracks.
    It is impossible for dumb person to anticipate the thoughts of a clever person. Impossible.
    It is very difficult for a clever person to anticipate the thoughts of a dumb person, but not impossible.

  12. Place I’ve been monitoring failed to sell at weekend auction and (shock horror) wasn’t reported in the results. I’ve always just assumed that non-reports are non-sales, so Qld clearance rates are usually around 30%. Have also noticed loads of Brisbane properties being on the market for 6 months, being pulled off for a week (easy Reusa!), and then re-listed as ‘new’. Looking at historic sale prices, lots of Brisbane properties haven’t increased at all in the past decade. We rent our place for 800 (not the 850 realestatedotcom says) when it rented out 5 years ago for 1100, and “value” is supposedly 1.2 mil. Market is in the gurgler, but the property owning pollies and their financiers are desparately trying to hide it.

  13. The Horrible Scott Morrison MP

    This is the correct way to measure auction clearance rates. I learned this during my time at the Property Council of Australia.

  14. Nothing new in falsifying auction clearance rates. Neil Jenman has been exposing it for years but msm wasn’t interested. Why would they be? Rivers of Gold!!

    • Mining BoganMEMBER

      Yep. Was complaining about it ten years ago just before that idiot Rudd went final solution and opened up the floodgates.

      Hopefully this time it won’t go as bad for Australia as it did last time.

  15. Realestate.com, which uses Corelogic, usually reports increased number of total auctions.The same day/next day the total number of auctions is reduced dramatically.