Earlier in the week, a reader sent me a link to a recent Real Estate Institute of Victoria’s (REIV) news release. The release contained the following quote [my emphasis]:
Members report positive expectations for market activity in the March quarter at the same time as a drop of 3–5 per cent in the median house price is expected.
This comment has attracted quite a lot of interest amongst housing bears and was quoted extensively in the comments sections of news sites. I originally wasn’t planning to report on it as I didn’t consider it particularly newsworthy. That was until I found out that the REIV appears to have pulled the article from its website, presumably because of the attention that it had received.
Now when the link is entered into the address bar, an error message appears saying “Cannot find news item”. Has the REIV attempted to cover-up its claim to reduce the risk of ‘talking down’ the housing market? It certainly appears so.
As it turns out, the REIV hasn’t done a very good job in covering up its comment, because its March Real Estate Property Update video (provided below) contains the quote 45 seconds in. Here’s the screen shot:
The REIV must be very concerned about confidence in the housing market if they are ducking and weaving like this.
The original article can still be found in Google’s cache, here…
http://webcache.googleusercontent.com/search?q=cache:7AS-yE94U_wJ:www.reiv.com.au/news/details.asp%3FNewsID%3D1049+Auction+preview+12+and+13+March+2011+-+REIV&cd=1&hl=en&ct=clnk&gl=au&source=www.google.com.au
So yes, the article has been pulled by REIV. It will disappear from Google’s cache as well after a while. Screengrab it if you want to keep the evidence.
Shadow.
hmmm
methinks someone should grab and host that video…for evidence
Better cached link http://webcache.googleusercontent.com/search?q=cache:7AS-yE94U_wJ:www.reiv.com.au/news/details.asp%3FNewsID%3D1049+http://www.reiv.com.au/news/details.asp%3FNewsID%3D1049&cd=1&hl=en&ct=clnk&gl=au&source=www.google.com.au
Why don’t you actually ring the REIV and get a response from them? It would make the post more informative.
Why bother? They’d be too busy destroying evidence from last week’s data – usually in the form of 15-20% of ‘unreported’ auctions.
Actually, we determined that the unreported auctions aren’t really making much difference to the clearance rates. Even though more auctions may be unreported, the average revision (after that initial unreported data is included) in 2010 was only 2.5%. The full analysis and investigation is here…
Auction Clearance Rates Fudged? Not really…
We know there are unreported auctions. There always have been. The issue of rising numbers of unreported auctions was first raised in early 2010, and the question is whether that increase in the number of unreported auctions had or is having a significant impact on revisions to the clearance rate. The conclusion is that clearance rates were revised by an average of only 2.5% in 2010, and 3.9% in the first few weeks of 2011, which could not be very much higher than historic norms.
And on 25% of occasions, the clearance rates were actually revised up, not down!
Cheers,
Shadow.
Sorry Shadow I don’t waste my time with B grade websites.
Good for you Jimbo, and no need to apologise. Thanks for posting to let me know.
so 75% revised downwards?
Keep dreaming shadow you sorry-arsed spruiker. Go back to the rat-hole you crawled out of, your nothing more than an annoyance on here.
Christian. Please calm down. Shadow is entitled to his point of view. Further, he is always polite when commenting and does not deserve to be treated with such disrespect. Play the ball not the man.
hear hear…
This website is so informative in part because of the quality of the comments. Please don’t turn this into a flamefest. Not only is it disrespectful, it also brings down the credibility of everything being posted here.
Good on shadow for having the ball to highlight ‘the other side’.
Yeah, keep the flame wars for other sites and forums, thanks (if at all…)
Christian by name but not by nature.
There is no need for that scorn or ridicule. These are open forums and everyone is entitled to make a comment. How dreary if we only heard one side of the “argument”
Well said ericskeric. This forum encourages diversity of opinion.
Diversity of opinion is fine, but when I come to this site I expect people to back up their opinions with some evidence. I therefore challenge Shadow to show us some hard, verifiable and clear evidence for his contentions, particularly the contentions that are to me rather surprising, viz:
a. the rate of unreported auction clearance rates in 2011 is “not very much higher than historic norms”, and
b.clearance rates have been revised up, not down (with the clear intended inference being that even in 2011 clearance rates have been regularly revised up as well as down).
The link does not, to my mind, clearly back up the opinion expressed. I will admit of the possibility that somewhere in the link to 11 pages of random posts there might be something, but I didn’t see it. If the info is in there, it is fair enough for people to call Shadow in making the link more specific or otherwise to highlight the data (he or she) thinks backs up the opinion.
I must say that in this area of auction clearance rates, my personal opinion is that the data is incredibly opaque, reliant as it is only upon agent’s advice, with no effective regulatory mechanism to require accurate reporting. In those circumstances, my opinion is that to attempt to draw any kind of reliable conclusion about year on year or month on month changes is fraught with obvious difficulty. The only way to be sure of auction clearance rates would be to track all real estate ads for proposed auctions in the weeks leading up to a particular weekend and then quantify the status of that property 1 or 2 weeks after the originally proposed auction date. As far as I know, no auction clearance rate agency does this – they all leave wriggle room for auctions to be cancelled, withdrawn, changed to other kinds of sale etc before and/or after the proposed auction date.
Hi Endrortsonhousing,
The evidence is all there in the thread. I can’t really point to one specific post because the investigation was conducted by many people over a long period of time. One of the people interviewed in the original media article is a member of the forum and contributed with data. Up to you whether you believe it or not, of course.
And to ‘Christian’… calm down, it’s only a blog, no need to get yourself all worked just because someone has a different opinion to yourself!
Cheers,
Shadow.
Great find Leith.
Reading through Shadow’s linked thread, it is quite clear that quite a number of his own forum members do not agree with his opinion, having clearly ridiculed and summarily dissected his arguments. Nor do they appear to back the conclusions he is espousing here – some of the points made by Rastus2 are particularly deceisive against Shadow’s position on the auction clearance statistics.
I wonder if he is looking for support here? That would not be surprising given that the level of discourse found here is of a generally high standard and much less infantile in comparison. However, being unable or unwilling to articulate the rqeuested evidence makes fulfilling that request difficult.
Going back to the topic of the REIV itself, regaring their clearance numbers it is also clear that they are removing past auction statistics from their website each week and sneaking their revised figures into the previews for the next week.
There are places that are keeping a constant watch on the REIV numbers which is reassuring. This link in particular is quite clear on how much manipulation is actually going on and pays particular reference to auctions which have mysteriously gone missing and other discrepancies.
http://www.simplesustainable.com/topic/2295-melbourne-clearance-rates/
I’d recommend that people take a look, especially those put off by the more juvenile antics found in Shadow’s linked forum.
Shadow – the thread you speak of and the data shows that the after taking into account the “unreported auctions” the true clearance rate is about 10% lower than what the REIV reports as the clearance rate each week.
So when the say the clearance rate was 66% it was really 56% (or less).
The average revision in 2010 was 2.5%, and so far in 2011 the average revision has been 3.9%
Hi Shadow
Unless I’ve read incorrectly, I’m sure the owner of Simple and Sustainable is a property investor who also contributes to the bullish Somersoft property investment forum thus it seems extremely counterintuitive that ‘bulls’ are not allowed at her forum. As such, I think yours is a peculiar conclusion to draw, and you might very well be mistaken on your assertion “bulls aren’t allowed.”
Regardless of the actual makeup of said forums, it is hard to disagree with the persuasive nature of the arguments in the link previously specified thread regarding the impact of missing auctions (calculated based on comparing initial results with subsequently released revisions) compared with the publicized clearance rate. The longer practice of this kind is detected, the more it hurts the reputation and casts doubts over the motivations of property related organizations like the REIV. However, any forthcoming clarity from Mr Larocca and his counterparts such as that located below is always welcome.
Counter-intuitive? Perhaps, but if you name same a single bullish member of the forum I’d be very surprised.
I must admit I have been a little surprised by the comments here. Every week we post an auction preview. On Monday, after the results are reported on our site I remove it because it is no longer a preview.
It is very pleasing to know that people are interested.
The fact that we repeated the comment in a video would suggest we are not trying to hide anything.
Not only did we tell the public via our website but we also advised the media of the same thing and even tweeted it.
The REIV reports market results as we collect them. For instance in the last March Quarter we reported a 2 per cent drop in the median house price.
Thanks again for the interest.
Cheers
Out of interest why don’t you guys report the clearance rates for Jan 11 on your Auctions v Clearance Rate – Monthly chart under the property research section?
Robert, in all honesty I’m surprised you’re surprised. As a developer, I like many used industry data like yours in the course of normal market analysis. However, I noticed a major change circa 2007 in the quality and accuracy of this data.
There is without question some major holes in the REIVs work and the manner with which it is used in subsequent press advertorials.
Take today’s Melbourne Herald Sun. It’s running two articles that completely contradict each other, both referencing your comments.
The first, is a positive one http://www.heraldsun.com.au/news/victoria/melbournes-house-hunters-going-west/story-e6frf7kx-1226024280583
The second is less complimentary and not surprisingly, is not available online. It is however titled, ‘House Prices set to Tumble’, by Craig Binnie.
Despite the headline you comment that the strongest areas so far this year have been the inner eastern suburbs, followed by the inner south, then inner north. There is no mention of the booming western suburbs. And, this is in direct contrast to aforementioned article where you said the ‘blue ribbon eastern suburbs’ have suffered the most!
Is it any wonder the public is now a little sceptical of the REIV’s output? It has good reason if the data results in such conflicting analysis. Either the REIV is deliberately misrepresenting it’s data, ergo the true state of the market or there is a serious need for better quality control in there. Which is it?
I’m surprised that anyone would be surprised at a RE agent being surprisd at the public expressing doubt about their methods of data collation / dissemination.
Robert, we are just going by what is prominently reported in the media by professionals from your own industry.
.
http://www.news.com.au/money/auction-rates-fudged-by-failed-campaigns/story-e6frfmci-1226016477643
.
Can you tell us how REIV plans to tackle the problem where auction clearance rates that it puts out on a weekly basis are fudged by member REAs not reporting on failed campaigns?
I dont watch the REIV stats, but I do watch APM and RP Data. I notice that RP Data did not post auction clearance rates for the week ending 6 March. (Until yesterday they had Feb stats, and then jumped to the week ending 13 March) Funnily enough, that was a bad week for auctions here in Canberra.
Forgive me if I suspect it may have been a bad week elsewhere as well – Canberra not being big enough to count and all.
Robert you should replace the “i” with an “l” – as “institute” makes your “lobby” group sound professional. In most real professions service to the public good and ethics are their foundations. The REIV masquerades as professional experts when really it is a gang of spruikers and peddlers with as much understanding of economics as a sheep.
Robert – when can we expect your answer….we’re waiting?