Half of Victorian sellers say new auction booking rules won’t work – realestate.com.au

Half of Victorian home sellers believe the state government’s plan to solve underquoting by banning them from auctions unless they declare their reserve seven days in advance will not work.

More than a quarter also say they would reconsider putting their home up for auction if the proposal is passed in its current form.

A survey by Real Estate Industry Partners, including 197 Victorians, found 42 per cent did not think the policy announced last November would make the sales process fairer.

Another 8 percent said it would make things worse, while only half said they thought it would work.

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The worrying response to the government’s proposal comes as Melbourne’s auction market resumed this week, with 648 auctions planned 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 that 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 have to be higher than that (50 percent) to be sufficient,” Ms. Smiles said.

“I think this will require the government to have more conversations with the industry. And they need to be sure that whatever they include in the final design doesn’t favor one part of the market too much.”

Sadhana Smiles, CEO of Real Estate Industry Partners, believes the government needs to make major changes to its latest proposed legislation on underquoting.

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She also warned Victoria was at risk of losing its crown as the nation’s auction capital for at least a few months, as 26 per cent of respondents in Victoria said they would reconsider selling a homebuyer auction if the policy were legislated as planned.

Ms Smiles said the best solution to eradicate underquoting is AI-led analysis of price data to spot the biggest inconsistencies for targeted intervention by government officials.

Nicole Jacobs of prominent buyer’s agent Cohen Handler said more transparency around pricing was a good thing for Victoria, and the government’s seven-day plan had benefits from the buyer’s perspective – although professional buyers already knew when a house was underpriced.

Cohen Handler Victoria director Nicole Jacobs believes few underquoting solutions will ever have to deal with emotional buyers driving prices up beyond expectations.

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“But what we cannot factor into this whole equation is emotion. If two parties want it, emotion will take over,” Ms. Jacobs said.

The REIP survey, conducted by Renowned, comes just weeks after the Real Estate Institute of Victoria outlined their own proposal, which suggested disclosing a price range, including a reserve, three days before the auction.

Ms Smiles, former CEO of one of Victoria’s largest property companies, Harcourts, said the REIV’s proposal would be more likely to provide a fair environment for sellers and buyers – but she believed this could be done on the day of the auction if it were accompanied by more technology-based enforcement activity.

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