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Data compiled over a recent six-month period by property app Homer reveals that, in Sydney, properties tend to sell for a median $117,500 above the top of the advertised range. And more properties in NSW have been selling above guide (49.8 per cent) than below guide (39.7 per cent) – with only 10.5 per cent at the guide price.
The recent data reveals that across all capital cities, the typical above-guide sale overshoots by four to nine per cent, while the typical below-guide sale undershoots by only three to five per cent. It probably goes without saying that Sydney sale prices tend to overshoot the price guide figure by the most in Australia.
The CEO of Homer, Henry Pedersen, told The Guardian that the real estate industry has a widespread problem with transparency, which leads buyers to invest time chasing properties they can’t afford.
“There are so many different signals buyers are getting. It’s really hard for you to know who you can trust and who you can rely on and what data points are fair and transparent and which ones are just trying to drive inquiry to a property and then sell it 10%, 15%, 20% above that.”
While there are laws in place to prevent deliberate underquoting in NSW – agents risk fines of more than $100,000 – a house selling for more than its price guide doesn’t necessarily mean that the agent has broken the law, especially given how unpredictable auctions can be.
This may start to change, though, since the recent tax reforms announced by the Federal Government for the Budget – last week, more capital city homes failed at auction than sold. That means upcoming Cotality data is expected to show that the "clearance rate" (the rate of properties sold at auction) has been dragged below 50 per cent for the first time in six years. Good news for those looking to purchase property – not so much for those wanting to sell.
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