There’s a big issue with The Block. Picture: Supplied/Channel 9
The Block auctions that aired to conclude the last season of the tortuous Channel 9 renovation show were harmful to the ever fragile image of auctions.
Much of the bidding was simply about self promotion for the show ponies.
The paucity of interested mum and dad buyers was troubling.
But the most telling takeout of the event was the concerning issue of under quoting.
Auction reserve prices are best set within the publicly quoted price guide, not significantly higher as was the case with the winning Hampton East house offering renovated by the Sydney contestants Steph and Gian Ottavio.
Their five-bedroom Japandi-style residence was advertised with a $2.8m to $3m price guide but its reserve was $3.35 million.
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The paucity of interested mum and dad buyers was troubling. Picture: Supplied/Channel 9
That 10 per cent hike above guidance was unacceptable conduct by the decision makers at the television network with the low balling guidance a lure to draw more bidders into the mix.
Consumer Affairs Victoria inspectors were in attendance, so let’s see what emerges.
But the Victorian Government undertook to review underquoting in September 2022 with nothing yet to emerge.
The NSW situation is similarly thwarted.
The Minns Government told The Daily Telegraph last year that it was investigating whether laws need to change, with Fair Trading Minister Anoulack Chanthivong saying if “rules need to be strengthened we’ll act”.
“It’s disgraceful for hopeful buyers to be taken for a ride while trying to make the biggest financial commitment of their lives,” he said.
“Licensed agents should know the rules and they shouldn’t be looking for loopholes.”
Earlier this month, NSW Premier Chris Minns said his government was establishing a task force to crack down on real estate industry allegations, including underquoting.
NSW Fair Trading has periodically conducted agency raids targeting underquoting often after complaints. It issued 43 penalty notices totalling $94,000 in fines in the first seven months of 2023 following 51 complaints.
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The Block auctions were harmful to the ever fragile image of auctions. Picture: Supplied/Channel 9
Eleni Petinos, who was the responsible minister in the dying days of the Perrottet government, signalled that repeat breaches would see these agents require licensed colleagues to sign off on their comparable pricing advisory.
But it never eventuated.
Buyers agents who see the occurrence more often than other market participants have increasingly given up reporting transgressions. Solicitors see it too with one noting Fair Trading was under-resourced and under committed to investigation and prosecution.
The laws were improved in 2016, but there are still loopholes.
Many had pinned their hopes on the 2021 appointment of John Minns as the NSW Property Services Commissioner to implement strengthening of regulatory responses to unethical and misleading practices.
In announcing the task force John Minns said underquoting was “happening more often than the complaints we’re receiving”.
“The ones I’m most concerned about is the deliberate and systemic underquoting which we believe exists in a relatively small number of agencies,” he said.
“We recognise that we need to raise confidence in the visibility of compliance action in NSW.”
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