AquAsia financial strategist, Mark Bayley, has today lambasted auction results reported by the Real Estate Institutes and private data providers, claiming they paint an overly rosy picture of the market and provoke over-excitement based on misleading figures. From the AFR:
“At best, these figures provide only a rough guide to a small sample of the overall sales, and that sample is inherently biased”…
“Looking at the data over the last six months, the reported clearance rate cannot even be relied upon to give a basic trend”…
“With so many auction results that aren’t recorded, should so much credence be given to these dubiously calculated clearance rates?”…
“At the moment, these clearance rates are heavily referenced by the RBA, banks’ analysts and media.”
Last Saturday, APM reported 83.7 per cent for Sydney, RP Data 78.6 per cent.
“By my calculations, the real clearance rate was a meagre 49.9 per cent – 394 from 789,” Mr Bayley said.
…the figures I calculate are transparent, real, and reflective of what is really happening, but the ones that are used by the industry and media are not.”
Concerns about auction statistics are nothing new, with commentators like Louis Christopher questioning their accuracy and bias many times over the years.
Many of the problems stem from the voluntary reporting system, which gives unsuccessful agents the option of not reporting their results, as well as the need for timely statistics, which inevitably leads to a large number of results being undisclosed when preliminary figures are released to the market.
A potential solution would be to make auction reporting compulsory by, say, the Wednesday of the next week. While this would not overcome the need for timeliness, it would at least ensure that all results – successful or not – are ultimately disclosed.
