The rising number of ghost auctions (unreported auctions not called in by real estate agents) is distorting the housing market.
The REIV’s weekend clearance rate was 57% on 480 auctions. However, 102 were ghost auctions and not included in this figure. Being fiscally conservative, one should automatically add these to the denominator. 267/582 = 47%
Shocking – a genuine clearance rate of 47%.
That would not be the headline the property lobby wants. The ‘Dont Buy Now!’ warning bells would be even louder if that was the case.
Over the last month we have seen similar trends.
April 3 – 4:
Published Clearance rate – 61%
Genuine Clearance Rate – 53%
April 9 – 10:
Published – 61%
Genuine Clearance Rate – 55%
April 16 – 17:
Published – 62%
Genuine Clearance Rate – 54%
April 23 – 24 (Easter break)
April 30 – May 1:
Published – 57%
Genuine Clearance Rate – 47%
May 8 – 9
Published – 60%
Genuine Clearance Rate – 52%
Ghost auctions have oscillated between 91 – 121 unreported auctions each weekend. If sharebrokers or companies cook their books, ASIC is soon on their case. Legal cases, large fines and even criminal charges may follow. It is unfathomable that the real estate industry, close to four times the size of the Australian stock exchange, has few checks and balances. They even have the lead on generating statistics. Imagine Goldman Sachs having the responsibility for inflation and unemployment figures?!!
The real estate industry has no or little oversight. We don’t even have a dedicated Federal Housing Minister anymore. Who is speaking up for the people? We urgently need a Real Estate Ombudsman. We urgently need a decent tax system.
If prospective buyers knew the Genuine Clearance rate, even fewer would be willing to enter the market. Housing prices would drop faster. The pain might be more intense initially, but at least the market could act rapidly and it would be over faster than allowing it to limp along.
Please read this key article on what such oversight has encouraged. Despicable.