Correction, crackdown finally put Melbourne home prices on the money

Correction, crackdown finally put Melbourne home prices on the money

Melbourne househunters have never had a better chance to buy a home without second-guessing the advertised price.

Tougher selling conditions and a crackdown on underquoting are behind the shift, experts say.

New figures show the average home in the city sold within 2.3 per cent of its listed price in December — less than half the average 5.1 per cent gap recorded in January last year.

It’s also a fraction of the 16 per cent surplus added to the average advertised price in February 2016, according to research from price tracking group REALas.

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REALas product manager Mark O’Neill said the figures should “give buyers confidence to shop in many suburbs across Melbourne, where houses are selling very close to the advertised price”.

Across last year, Melbourne’s most accurate property price quotes were found in Docklands, Lilydale, Clayton South, Cairnlea and Burnside Heights.

Advantage Property Consulting buyer’s advocate Frank Valentic said price quoting was “as accurate as it’s ever been”.

“Before we used to have to add 5-10 per cent minimum to the top of the range,” Mr Valentic said.

“(Now), the right buyers are turning up to the right properties”.

Consumer Affairs Victoria also reported a “noticeable improvement” in the difference between the estimated and final sale price of homes in the past financial year.

In 2015, the consumer watchdog beefed up its policing of underquoting — when an agent misleads a prospective buyer about the likely selling price of a property — by setting up a taskforce to monitor auctions and investigate complaints.

It has issued 145 notices to agents demanding they prove how they arrived at an advertised price since May 2017, when tougher laws against the dodgy practice came into effect.

The legislation introduced heavy fines for guilty agents, the possibility of commissions being stripped and required clear price guides be publicised on all homes.

The Federal Court has also slapped four underquoting Melbourne agencies with six-figure penalties of up to $880,000 since 2016.

CoreLogic Australian head of real estate Geoff White said agents now had to be “thoroughly transparent” — not just for fear of enforcement, but because buyers wouldn’t accept it.

“The industry has cleaned up,” Mr White said.

Real Estate Institute of Victoria chief executive Gil King said it was important to draw a line between the “heartbreaking” scourge of underquoting and homes selling above expectations.

A declining market means some homes will sell for less than their advertised range, Mr King said: “So in any restricted market it’s (the advertised price) going to be more accurate.”

-with Samantha Landy

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Docklands — 2.42% average difference between sold and quoted prices

Lilydale — 3.23%

Clayton South — 3.39%

Cairnlea — 3.46%

Burnside Heights — 3.48%

Wandin North — 3.56%

Seaholme — 3.62%

Kingsbury — 3.8%

Albanvale — 3.89%

Yallambie — 3.9%

Source: REALas, for 2018

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