Based on Reported Auction Results*

Momentum Slows Into 2018 … Can Agents Be Prepared?

Autumn sales have lacked their usual pizzazz this year with both weekly auction numbers on the lower side and success rates weaker than in recent years. It would appear for the time being at least, prices generally are easing; a trend which began late last year.

According to some agents, the slowing of momentum has seen prices ease from 5 to 10% in the last twelve month period, with buyers fewer in number at auctions. As purchaser numbers decrease, they are less inclined to “pay up” given the weaker competition. Not surprisingly,  properties that are first impacted by a general slowing in the market are those which have negative factors such as main road position or poor presentation.

Most would opine the market is ready for a breather. We agree. Agents may be moving into a different selling environment and would be expected to adjust their marketing strategies accordingly, to fulfill their vendors’ objectives. There could however be a twist in this tale …

Ironically, the State Government’s desire to help buyers by dictating new restrictive pre-auction price quoting rules, will do the Government no favours at all. In the attempt at making expected sale prices more transparent to would-be buyers, “quotes”/price guidelines given to purchasers who enquire, will of necessity, be higher than they may previously have been had agents used their own judgment or discretion. Elevated quoting can be a major killer of successful sales of properties at auction: it’s a property marketing fact of life.

Fewer sales each weekend produces the result that Sate Government receives less revenue from purchasers Stamp Duty. We trust that in a market downturn, the Government is happy with the trade-off or cost that is a fist full of dollars, for a few more votes.

We have never supported government interference with property auction quoting practice. The simple fact government does not regulate auction quoting of anything else – only real estate, is suggestive its motive may be a little open to interpretation.

Unfortunately, sellers are put at a disadvantage caused by such agent inflexibility. (the party who pays the agent, by the way) What works in buoyant market conditions does not always work as well in quieter times. Should seller’s interests be disregarded? Does it really matter? But arithmetic quickly explains how this situation comes to pass. In a strong market – such as that which we have had for many years, buyers outnumber sellers probably four or five to one.

Never mind the principle, let’s be popular instead!