I have read with interest a number of published articles in the last month around the inaccuracy of reported Auction Clearance Rates. Firstly, I’m surprised that it has taken this long for a publisher to pick up on the fact that most agencies will only publish voluntarily results they actually want published! The Real Estate industry is very competitive and agencies will want to make their results sound better then others.
The discussion on Auction Clearance rates serves 2 purposes a) It is used by mainstream newspapers as a way of reporting the ‘buoyancy’ or lack there of of the property market, or b) Real estate or auction agencies promoting their ‘statistics’ as better then their competitors. There is no question to the validity of ‘ Auction Clearance Rates’, however by focusing only on the auctions it fails to tell the reader the complete picture. It is safe to say that not all properties sell by Auction, (here is a statistic) within our business approx 20% of properties that we market are by way of public Auction, therefore the discussion on auction clearance rates is only based on 20% of the market? I’ll let you decide if that is a fair enough market analysis or not.
The reason why auction statics have been the accepted measure of the real estate market is because they can be. Every week, the properties that ‘Go Under the Hammer’ are given a pass or fail, tick or cross depending on their outcome. Its a simple measure that until now was never in dispute. So this brings me to my point, out of the other 80% of the market or thereabouts, how many of those properties sold on the weekend? What was the clearance rate of the Exclusive Agencies? (properties marketed with a price) and how does this compare to the Auctions.
I think if you decide to take an interest and look closer at this discussion, you will form the opinion that ‘yes’ 86% of statistics are just made up but most importantly, Auctions have much greater success rate of selling as compared to exclusive agencies, wasn’t this the point of the auction clearance rates discussion? If you want some statistics, just ask me.
Dan Sowden | Principle of Ray White Maroochydore