5 hours ago
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More than half of property vendors in Sydney who can’t get the price they want at auction are setting their hopes even higher in their selling quest.
Of the 2765 Sydney properties which were passed in over the six months to the end of February, 54 per cent had a new price guide above the top of the original guide when re-advertised, data from property research and tracking platform Homer App shows. Across NSW overall, it was 51 per cent.
Homer App’s data shows, of all relisted homes in the harbour city, 19 per cent had a new guide that was well above (more than 10 per cent higher) the original one, while 35 per cent were relisted with a guide less than 10 per cent above the initial guide.
Henry Pedersen, chief executive of Homer App, which launched this month, said it collects every sale listing in the country.
The discrepancy between a passed-in home’s original guide and higher re-advertised guide demonstrated that properties were being initially advertised at a “price point that is below where the vendor was seeking,” he said.
“Basically, every single one of the properties that listed at a higher price, a conversation could have happened earlier, potentially to understand where the vendor truly lies and try to pre-empt the auction.”
This comes as authorities look for ways to provide more clarity for home buyers and clamp down on underquoting. In NSW, property sellers will be forced to advertise their price guide. The Victorian government plans to force agents to publicly advertise a reserve seven days before an auction.
As part of its collection methodology, Homer App’s data includes all suburbs where homes were passed in then relisted, with the listing remaining with a new price for over 24 hours, by the same agent. The relisting must have been on a major listings platform, not just on the agent’s site.
Across Sydney’s regions, the inner west had the most passed-in properties re-advertised at a higher guide price than initially, with 68 per cent above. This was followed by the inner south-west (62 per cent above).
Pedersen said these were “incredibly competitive” markets and common spots for first home buyers.
“You’ve got a highly emotional group of buyers out there who are trying to secure their foothold in the market,” he said of the inner west and inner south-west.
The northern beaches was the one Sydney region where a home was more likely to be relisted for less than the price guide. But, even then, 38 per cent of properties were still relisted above the top end of the price guide.
Michelle May, principal of Michelle May Buyers Agents, who works across Sydney including the inner west and the lower north shore, said she had seen examples of passed-in properties being re-listed above the top end of the initial guide.
“There have been ones where I thought ‘oh wow, that’s quite different than what you guys were guiding’,” she said.
The NSW government reforms are designed to ensure “reliable” price information, said Minister for Better Regulation and Fair Trading Anoulack Chanthivong.
“We are also raising expectations of agents by requiring them to back up their price estimates with clear evidence,” he said in a statement.
Erin Howell, 28, and her fiance spent around a year searching to secure their Sutherland Shire duplex. They found price guides a point of frustration.
The pair went to “multiple” auctions as part of their research, said Howell, who works in tech and used the Homer App, where a property was sold for well over the advertised guide.
They also tried, and failed, to negotiate for a property that was pulled from auction after spending money on lawyers and pre-purchase inspections.
This was even though they made an offer above the top end of the advertised price guide straight after, and the readvertised price guide some months later, which was in line with the initial one.
They were knocked back both times because the vendor wanted more. Howell questioned why the price guide was lower than the vendors’ expectations, “and I didn’t get a reply”, she said.
May said there were a few reasons for higher re-listed guides, one being that it could be underquoting, and the property was rejected by the market on auction day.
“It could also be the vendors’ reserve being higher than, realistically, [what] the property was worth with comparable sales, so it didn’t achieve that on the day,” she said.
Henny Rahardja, the principal buyers’ agent at OH property group, said after a property passes in at auction, a vendor could remain optimistic.
“They may feel like ‘no, you know the market’s not that bad’ or ‘my house is better than my neighbour’s house’. So, they’re actually holding onto hope,” she said.
Real Estate Institute of NSW chief executive Tim McKibbin said he found it “a little difficult to understand” how a property could go back on the market at a price greater than what the market has told the agent and vendor it is not prepared to pay.
“It could be the case … sometimes during our recent history, where the market was moving so quickly upward that you might do that. But to say that there is a pattern of it happening more often than not surprises me,” he said.
There could be instances of it in regional areas where there were sharp price movements, McKibbin noted, or if an agent was able to find a new buyer cohort interested in the property.
Across NSW, of those properties that were relisted at a higher price after a pass-in, Homer App data shows that 8 per cent got less than the initial price guide, while 92 per cent got more than the initial price guide or above the revised price.
“That really, to me, indicates that for all those properties, that was the correct price to have on it to begin with, and the market has substantiated that,” Pedersen said.
