Quarterly Property Market Update – July 2010

Based on The Age Sunday Results*

Market’s Pause A Welcome Relief… What Will It Mean?

Previously in our last quarterly update, we commented that a success rate at weekend auctions below 80% many might regard as a market slump! Well fortunately for property buyers, it is finally happening and on a recurring weekly basis. The days of almost every auction being a guaranteed sale for vendors – and a blood bath for buyers, are hopefully over for a while to come … at least. Slump it is not. More relaxed it certainly is.

As our guide to success rate indicates, any outcome between 60 and 70 per cent week in/week out is a very healthy place for the property market to be. It’s neither impossible to buy in, or to sell in. “One sided” markets are very difficult and invariably end up with one half of the transaction frustrated or just unfulfilled. However not so in this success rate range. Vendors will need to listen more closely to what the market is doing to set reasonable price expectations in order to sell, and buyers will have more opportunity to “shop around” without the pressing urgency of recent times. On balance, very equitable!

Auction quoting will now be interesting to watch. Whilst we at Renowden Buyers Advocates represent buyers, we are not supporters of the onerous regulations and unrealistic comments that have been offered up on this subject from many people both inside and outside the industry, in recent years. Our article “Underquoting At Auction – Getting It Right” conveys some of our views on this if you would like to read further. But suffice it to say, the practise now of agents not “quoting” any price guide at all which is occurring more frequently (i.e. under price you now see “P.O.A.”), for fear of the agent being prosecuted or written about, has resulted in considerable inconvenience to buyers (and work for agents themselves). Now very often, it is required a buyer makes direct contact to each and every agent for every property they are interested in considering or thinking of visiting at an open for inspection… Each response might take hours or days to receive from the busy agent, when instead, the internet can display some guide immediately. What a ridiculous outcome, born of legislation aimed at trying to help the buyer! An irritating situation – resulting in massive time wasting and totally unnecessary in our opinion. This backward, not forward, development, needs to be addressed intelligently and without fanfare.

Sadly though, the agents whom we admire and appreciate for still including a helpful auction price guide, may find their quotes are too high and over-shoot on price expectations if the same level of prices are not achieved as previously anticipated. Ideally these auction price guide quotes should be lowered to allow for this. Regrettably, the “regulators” of how agents should quote a property listed for auction (and provide punishment if they don’t follow these rules) have shown themselves to be deficient in knowledge of auction marketing; their rules are too inflexible for the needs of such selling. Now “over-quoting” to the buyers may become a problem for them because agents are not able to be sufficiently flexible in this environment …

(Did someone say this state is over regulated?)

In quieter markets, Renowden Buyers Advocates services can provide even more value to property buyers. Greater savings can be made on price, and avoiding impulsive decisions on the wrong property are just two benefits we can offer. Mention this to anyone you know who would benefit by this in their property buying. They will thank you for it.

Happy house-hunting,

Bruce Renowden