Weakened auction results coverage becomes a war of words: SQM vs REIV

The simmering five-year war of words between property analyst Louis Christopher and Real Estate Institute of Victoria boss Enzo Raimondo has flared again. The dispute centres on the reliability of home sales data and who controls their publication.

And The Age newspaper sits in the middle of the barney yet again.

"What is happening to real estate information in Victoria is a disgrace,” Christopher says in his latest SQM newsletter.

“The Melbourne auction clearance rates that are currently being published by the REIV are inaccurate and misleading.

“These clearance rates are providing a deceptive representation that auctions are a successful way for vendors to sell real estate. The reality is they are not nearly as successful as what is purported.”

He was responding to Raimondo who noted on the institute’s website on July 21 that for the previous two Sundays, The Age had published articles questioning the REIV’s collection and reporting of auction and private sales results.

Raimondo noted that “to support one article, Sydney-based researcher Louis Christopher was quoted as saying the clearance rate is inaccurate and misleading. Mr Christopher is a past employee of the Fairfax-owned data company Australian Property Monitors (APM) who left that company’s employ under a cloud and has a history of disputing REIV research.”

That history dates back to 2006, when Christopher accused the REIV and “some of its inner circle of crooked agents” of “grossly unethical behaviour” when it came to auction result coverage.

Christopher accused the REIV of reducing the “level of bad news in the marketplace by controlling the information provided to the media” and making “a profit out of the data by reselling it back to real estate agents.”

An article written by Crikey in 2006, “Has Fairfax kicked out a fearless commentator for doing his job?”, gives the details of the dispute.

Christopher, who was not to return to his Fairfax job after the attack, now owns and runs SQM, an independent property advisory and forecasting research company.

He now suggests that in 2006 senior Fairfax executives chose to ignore the mounting evidence against the REIV.

“I believe the reason why they did this was for the protection of The Age's real estate advertising revenues – by ensuring certain organisations such as the REIV that could threaten those revenues by wielding their influence over real estate agents were kept on the side.

“But that's just my insider's opinion,” he says.

Christopher notes that The Age is now allowing the poor auction results allegation to be repeatedly reported over recent weeks.

“I am not sure, other than I suspect that the REIV, through its portal realestateview.com, are increasingly seen as being on an opposing team to The Age,” he says.

“Importantly though, it should be noted that [Age journalist] Chris Vedelago is thankfully doing his job, and I also know that Chris is seriously and personally interested in exposing these serious issues surrounding auction reporting.

“I'd say this is also the case with his editor, and perhaps that is all there is to it.

“And whatever the motives may be right now, The Age should be commended for bringing this to the attention of the wider public.”

Christopher’s spray ended by debunking the suggestion that non-disclosure of real estate pricing was a right of the vendor due to privacy.

“This must be the most devious reason given for not forcibly retrieving results from the industry,” Christopher says.

“You see, auctions are a public event. That means that what has transpired at the auction is entirely open for the whole world to see. Not just those who attended the auction.

“The public are entitled to all market pricing information including sales prices.

“To not provide them with this information enables crooks to deceive both buyers and sellers on what is considered fair market value for a property,” he says.

“Unfortunately what Enzo Raimondo and his institute seem not to be able to comprehend is that if we have a transparent housing market with reliable information that is easily available to the public, that will actually breed confidence into the market.

“Both buyers and sellers will be more active in the market because transparent un-manipulated information is good for the whole industry.

“As opposed to now where hardly anyone knows what is going on in Victoria, opening up the channels for those with ulterior motives to take complete advantage of the information black out.

“The battle is for information- who controls it and at what price.

“Sadly, for the Victorian public and indeed real estate agents, the battle has been all but won by the REIV and it this has been the case for a while now."

REIV communications manager Robert Larocca says in response the institute has used the same transparent methodology to calculate the clearance rate for about seven years.

“Every home we report sold is indeed sold,” Larocca says.

“The clearance rate is an indication of the market and should be viewed by people in conjunction with the attendance at relevant local auctions to form a view of the market in the suburbs they are buying or selling in.

“Consumers and media can see that the REIV's auction statistics are the most comprehensive and timely available, for example, last weekend The Age reported that the REIV provided 421 auction results (now up to 486) whilst APM only had 227.

“The system provides a very clear indication of the state of the market as evidenced by the fact that over the past year or so the REIV has reported clearance rates in the 80s, 70s, 60s and now 50s,” Larocca notes.