A survey conducted for the REIV has revealed major concerns over the Allan government’s auction plan.
A shocking 94 per cent of Victorian property owners have revealed they would look to dodge government plans to ban auctions unless sellers disclose their reserve price.
One in five are considering ditching the sales method entirely, a “massive concern” that could cost Melbourne its status as the Australian auction capital and has the state’s leading real estate body calling for significant changes ahead of this year’s Victorian election.
The Allan government is just months away from implementing a requirement for sellers to inform buyers of their minimum sale price seven days prior to an auction being held in a bid to stamp out underquoting — expected to be in force prior to this November’s poll.
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New research commissioned by the Real Estate Institute of Victoria and conducted by Lonergan Research has found just 6 per cent of the state’s homeowners would make no change to the way they would sell a home after the change.
Meanwhile, 28 per cent said they would set a reserve price higher than they otherwise would have and 22 per cent said they would swap to a private sale instead.
Another 13 per cent said it would make them more likely to try and get an offer ahead of the auction.
Auctioneer Tate Moore in action on a Saturday morning, conducting one of Melbourne’s favourite kinds of street theatre. Picture: David Crosling.
Almost a third, 30 per cent, said they would consider all three of the alternatives proposed.
REIV chief executive Toby Balazs said the survey results were a key reason the state election needed to give deep consideration to the property market — and a sign the government’s auction proposal would cause more harm.
“It is likely to compromise transparency by triggering inflated reserve prices, a fall in clearance rates and an increase in offers prior to auction as indicated in the survey results,” Mr Balazs said.
“It’s a massive concern. What is supposed to improve the buyer experience, based on our research, it will do the complete opposite and remove Victoria’s title as the auction state.”
Additional survey results provided a warning to the government with a quarter or respondents indicating the government was seeking an undue say in how much they sold their home for, and 27 per cent felt they were having key controls over their decision making taken away.
Mr Balazs said the government was already seeing signs that their rental regulations and taxation of landlords in recent years had led to a decline in the number of active residential rental bonds in the state’s own data, and needed to make urgent changes to avert similar issues in other market segments.
REIV chief executive Toby Balazs believes major changes are needed from this year’s state election to get the property market back on track.
Using the survey’s findings as a base, the REIV is calling for substantive reforms to regulatory and tax settings to better attract investment and sustain economic growth, improved transparency for home sales and a more stable housing market.
“Because what we are continuing to see across much of the sector – not least in the state’s flatlining rental market – is flawed, one-sided policy initiatives that are failing to address material issues,” Mr Balazs said.
Lonergan Research polled responses from more than 1000 Victorian respondents.
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