Allan government plans to tackle underquoting have not convinced Victorians. Picture: Mohammad Alfares/The Australian.
Half of Victorian homesellers believe the state government’s plan to fix underquoting by banning them from auctions unless they disclose their reserve seven days ahead won’t work.
More than a quarter are also indicating they would reconsider putting their home to auction if the proposal passes in its current format.
A survey by Real Estate Industry Partners, including 197 Victorians, found 42 per cent did not think the policy announced in November last year would make the sales process fairer.
Another 8 per cent said it would make things worse, leaving just half indicating they felt it would work.
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The concerning response to the government’s proposal comes as Melbourne’s auction market fired up for the year again this week, with 648 auctions scheduled to test the market and a preliminary clearance rate yesterday of 70.3 per cent, according to PropTrack data.
REIP chief executive Sadhana Smiles said while she could understand what the government was trying to achieve, their current proposal did not have the support of the industry — or the public.
“I think you need to be higher than that (50 per cent) to be a pass mark,” Ms Smiles said.
“I think that where that leaves the government is that they need to have more conversations with the industry. And they have to be sure that what ever they take to the final draft doesn’t overly favour one part of the market.”
Real Estate Industry Partners chief executive Sadhana Smiles believes the government needs to make big changes to its latest proposed underquoting legislation.
She also warned Victoria risked losing its crown as the nation’s auction capital for at least a few months, given 26 per cent of survey respondents in Victoria indicated they would reconsider selling a home buy auction if the policy was legislated as planned.
Ms Smiles said the best solution to stamping out underquoting was AI-led analysis of pricing data to spot the largest inconsistencies for targeted intervention by government officials.
Prominent buyer’s agent Cohen Handler’s Nicole Jacobs said more transparency around pricing was a good thing for Victoria, and the government’s seven-day plan had merit from a purchaser perspective — though professional buyers already knew when a home was underquoted.
Cohen Handler Victoria managing director Nicole Jacobs believes few solutions to underquoting will ever contend with emotional buyers pushing prices above expectations.
“But what we can’t factor into this whole equation is emotion, if two parties want it, the emotion will take over,” Ms Jacobs said.
The REIP survey, which was run by Renowned, comes just weeks after the Real Estate Institute of Victoria outlined their own proposal suggesting disclosing a price range that included a reserve three days before auction.
Ms Smiles, a former CEO of one of Victoria’s biggest real estate firms, Harcourts, said the proposal from the REIV was more likely to provide a fair environment for sellers and buyers — but she believed it could be done on the day of the auction if paired with more technology-led enforcement activity.
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