Auction marketplace deserves better price disclosure from agents in weekend results

Sydney’s weekend auction success rate was on the surface quite respectable.

Sydney secured a slight improvement with its 56% success rate – on initial returns – bettering the 54% of the previous weekend, according to Australian Property Monitors.

But there were three worrying undercurrents that don’t instil confidence in the ongoing market.

The first was the seasonally high number of missing results.

Australian Property Monitors had 494 auctions on its scheduled Sydney list, and managed to collate 394 results, so there’s another 100 yet to come. Melbourne likewise had 102 missing results in the REIV tally.

Certainly given it’s early in the year some agents are rusty when it comes to the voluntary reporting systems, but typically these late results are more likely to be passed-in properties, so they tend to drag down the initial success tally.

The next worrying bit of data within the result was the 12% withdrawal rate that casts a big shadow over the Sydney results.

GoodyerDonnelley agent Alexander Phillips had two withdrawn properties.

“We had no one on them, so we've put a price on them," he candidly acknowledged.

"Buyers are a little bit scared by auctions at the moment.

"If vendors have got a price they're happy with that's in line with the market, it's often best to put a price on it and generally they're then selling quite quickly," he told Fairfax Media.

The Sydney withdrawal rate was 13% on the previous weekend and 11% the weekend before.

It’s not a problem in Melbourne, however.

But both cities share the other worrying symptom – the lack of price disclosure when it comes to the sold price, and also the passed in price.

There were 41 Sydney successful sales where the result was withheld from publication.

There were also 56 Melbourne successful sales where the result was withheld from publication, along with 22 results from sold before negotiations.

One of the reasons is that the agents like to get inquisitive follow-up phone calls from those who want the result - from whom they hope to get their next listing.

But don’t try convincing me that there’s not an element of vendors (and agents) being slightly embarrassed at the price outcome.

If it’s a no bid auction of course there’s no price disclosure – and Sydney had 13 of them on the weekend.

There were 20 vendor-bid Sydney auctions where the vendors are at least telling the market a rough guide above which they will negotiate.

But there were 32 auctions passed in with no price disclosure in Sydney.

There were just the 14 auction passed in results in Melbourne where the result was withheld from publication. And Melbourne’s reportage typically goes the extra mile by giving not only the passed in price, but more often than not it gives the reserve price which is a handy addition missing from Sydney results.

But all up 35% of the 494 Sydney results are missing as of Monday morning. Melbourne had 92 results without prices, plus 102 results yet to be advised, making around 22% missing.

I am not in the same camp as Property Tycoon founder Mark Armstrong, who seeks mandatory reporting of all auction results within 24 hours of a sale. I think there are varying degrees of privacy entitlement – say, those sold before auction are more entitled to have non-disclosure until settlement.

But a publicly held auction is another matter altogether and there should be an onus on disclosure.

"At the moment people are flying blind,” Armstrong says.

“Just like in the share market, there should be 100% disclosure on performance so we can make the most informed decisions," he says.

We all want to know the auction results in a timely manner – so up-to-the-minute Saturday and in Melbourne even Sunday results are a vast improvement on yesteryear, when everyone relied on a limited number of results put up in agent windows or waited until newspapers published sales on settlements.

The Saturday figures are a reliable sample of market direction and sentiment, and those with a desire for more information can always glean it later in the week.

The REIV’s Robert Larocca is correct in responding that people have plenty of opportunities to go along to the auction see what's happening for themselves.

But reporting organisations such as the REIV and APM do have obligations that the data they release gives as best an accurate summation of the marketplace. But they will only truly succeed with agents in tow. 

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