AUCTION TRUTH OUT OF CONTROL
Pity about the sales results.
Article originally published JANUARY 27, 2005 –Reviewed and approved.
By Neil Jenman
The event was headlined in the local newspaper as a roaring success.
A full-page report under the banner “Auction starts off with a bang” showed a photo of an “auctioneer extraordinaire” being congratulated on his “successful performance”. The person showering the congratulations was an agent.
According to the report, Scott Kennedy-Green of The Block fame had travelled from Sydney to Noosa to “strut his stuff and loosen up the purse strings of those present”.
Described inaccurately as “chief auctioneer of the largest residential agency in Australia,” he had been “especially commissioned to wield the gavel” over six Noosa properties, including plush apartments, luxury houses and a prime block of land.
And the outcome of all this bang-bang-hype?
One property sold. The others attracted little more than a murmur beyond the vendor bids. The auctioneer extraordinaire delivered a clearance rate of 17 per cent.
It was little better elsewhere on the Sunshine Coast on the same day.
A total of 34 properties offered at auction, with just six sold. A top bid (via that suspect mobile phone) of $970,000 for a Noosa home, more than half a million dollars below the owner’s price of $1.5 million. And no bids at all for a Tewantin cottage where the owner wants $795,000.
The highest bid for a Buderim property with a reserve of $357,000 was $320,000, but the Ray White agent said: “It wasn’t a bad auction – we did have some bidding.”
Another Buderim property, with an asking price of $655,000, was passed in at $575,000; the agent claimed buyers “may have thought the house was going to be a lot dearer than it was and this perhaps distracted interest”.
Ray White failed a third time at Buderim, with a best bid of $375,000 for a home where the owner wanted $425,000. Incredibly, the agent commented, “It was a good auction – there was a crowd of around 50 people.”
Lately, it’s the same every weekend on the Sunshine Coast, which consistently challenges for the nation’s lowest auction clearance rates. But the Sunshine Coast Daily devotes 6-8 pages every weekend to editorial coverage of the agents’ auction hype.
There are similar scenarios around Australia. In the face of growing sales failure, agents continue to promote auctions as the best way to sell homes.
Many local newspapers have a vested interest (advertising revenue) in aiding agents to hype auctions. And many sellers are being caught. They are paying thousands of dollars to promote the agents and support local newspapers.
When their homes fail to sell, the sellers then have to read the headlines which describe their no-sale auctions as a “roaring success”.
In December, Sydney delivered clearance rates of only 35-38 per cent, despite the total number of auctions being half the number of a year earlier. Even the auction capital, Melbourne, has struggled to achieve 40 percent clearance rates over the past 12 months – while Brisbane and the Gold Coast seldom manage to sell even 30 per cent of properties offered by auction.
With auctions, the spin is roaring, but not the sales.
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