http://www.theage.com.au/victoria/agents-withhold-house-price-data-20110709-1h859.html?from=smh_ft
Agents withhold house price data
Chris Vedelago and Cameron Houston
July 10, 2011
Comments 15
Nearly 30 per cent of auction results published by the Real Estate Institute of Victoria in June were missing critical information.
MELBOURNE real estate agents and vendors are increasingly withholding or manipulating data provided to the Real Estate Institute of Victoria, prompting calls for the mandatory reporting of all property sales to protect consumers.
A Sunday Age investigation has found that 27 per cent of all auction results published by the industry body in June were missing critical information - including the sale price, passed-in price or the reserve. Many auctions were not reported at all, distorting clearance rates that are used by buyers and sellers to gauge market strength.
Nearly one in five properties sold at auction are now reported to the REIV with the price marked ''undisclosed'' - a significant increase from last year's property boom, up from 11 per cent then to 18 per cent now.
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The investigation also revealed that 43 per cent of properties scheduled for auction in June had no published quote range, further frustrating buyers' attempts to obtain basic information. With Melbourne's clearance rate slumping over the past year - only about half the properties on offer are selling under the hammer - agents are increasingly refusing to disclose information about failed auctions. The passed-in price, vendor's reserve price or both were withheld for 20 per cent of all properties that were passed in last month.
At the peak of the boom in March last year, when auction clearance rates regularly topped 80 per cent, only 15 per cent of properties passed in were missing this key information.
Real estate agents and vendors have been accused of deliberately omitting auction information to conceal poor results and create a more positive perception of Melbourne's ailing property market.
Last month, agency RT Edgar sent a newsletter to clients warning there was a ''serious question mark'' over media reporting on the market because many agents were withholding sale prices and passed-in results. RT Edgar director Michael Ebeling said agents who were doing the right thing were being disadvantaged
because their competitors' clearance rates seemed better because they withheld information.
''We cannot see how the media is getting reliable sales statistics, and as a result are reporting misinformation about the market,'' the email said.
Despite conceding that the reporting system is a ''bit rubbery around the edges'', the Real Estate Institute of Victoria has refused to back calls for compulsory reporting of all auction results.
Prominent real estate agent Barry Plant backed calls for mandatory reporting of all auction results to promote transparency.
''What happens at a public auction is obviously in the public domain. So rain, hail or shine, whatever happens on the day, the sale price must be included in all auction reports,'' he said.
He said agents often refused to disclose the price of a house sold at or after auction when the results were below vendor expectations. ''There's a lot of agents who have been embarrassed by the falling market because they've told a vendor they could get a certain price and failed,'' Mr Plant said.
''The trend is more pronounced at the top end of the market, and I know of several agents who are doing this as policy.''
REIV head Enzo Raimondo defended the institute's voluntary reporting methodology, saying the ''small increase'' in the number of undisclosed results did not affect the integrity of the system.
''It is not the role of the REIV to force home owners to publicly declare the amount for which their homes sell. If a person really wants to know the price for which a home sells, they can attend the auction,'' Mr Raimondo said.
But buyers advocate Christopher Koren said many agents were resorting to ''sneaky behaviour'' to mislead buyers over the true state of the market and that mandatory reporting was ''an obvious and necessary reform''.
''When agents and vendors are selling a property, they want the world to know it's on the market.
''But when it fails to sell or doesn't get the price they want at auction, we start seeing smoke and mirrors,'' Mr Koren said.
He criticised the REIV for its failure to introduce tougher reporting measures and called on the state government to take action.
But Minister for Consumer Affairs Michael O'Brien said the government had no plans to intervene. ''Mandatory disclosure would jeopardise the privacy of many people,'' he said.
The data collected by the REIV is regularly used by media organisations, including The Sunday Age, to assess the state of the property market.
The Baillieu government made a surprise decision last week to relax regulations protecting consumers from agents who buy a property they have been hired to sell despite the obvious conflict of interest.
Mr O'Brien said the onus should be on real estate agents to self-regulate.