December 27, 2021

#133: Purchasing laws in each state - Part 2: The problems with underquoting and how to solve it. When and why vendor bids are made? Do vend

58 minutes

https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market update 1. Proposed land tax changes in Queensland In a surprise move, the Queensland government has put forward in their mid-year budget update plans to change the calculation of land tax so that an investor's entire investment portfolio is taken into account, (not only the land owned in Queensland). The trio discuss the probable impacts for demand for Queensland property, property values and also rents. Not to mention the potential that other states will possibly follow suit. 2. Regionals outstripping the capitals in unit growth When looking at property growth over the last 12 months, units in combined capitals have increased by 12.6%, while units in combined regions have increased a whopping 23.1%. The trio discuss the possible reasons behind this perplexing bit of data. 3. Auction volumes still strong despite Christmas only days away Last weekend (ending Sunday 19th) was the second busiest auction week, (in terms of stock volumes) since CoreLogic began tracking in 2008. The week beforehand was the biggest stock volume week on record and we are now in the fourth consecutive week where more than 4,000 capital city homes have gone under the hammer. What it means is that supply and demand ratios are slightly closer to equilibrium, and in contrast to the difficult buying conditions that have been a hallmark of 2021, it's now a (comparatively) great time to buy, with more properties for sale than ever before and many buyers giving up the search and packing up for Christmas already. Keep your eyes open over January, as there is likely to be more stock hanging around than normal as clearance rates have eased somewhat for the short term. Purchasing laws - Part 2 1. What is underquoting? Sometimes known as 'bait pricing', underquoting is the practice applied by agents knowingly advertising the price of a property for sale on the market at a price lower than the true value of the home, (or worse still, at an advertised price that is lower than the vendor's asking price). The Property Buyer sheds light on why this practice occurs in Victoria, (and other states). 2. What is the danger to the buyer of underquoting Buyers will waste money and time carrying out due diligence and building inspections on a property, only to find out that the property is not within their actual budget and out of reach. Buyers who have been in the market long enough and those who have been burnt enough times will start to cotton on that the quoted range is not representative of the realistic price that the property will go for. So now, there is an expectation that a property will sell for more than the quoted range. 3. How Queensland has tackled this issue Agents in the Sunshine state are prohibited from representing a property for sale at a specified price while being aware the vendor will not accept that price. In addition, if a property is going to auction, agents are banned from making any price guide representations at all. While this does effectively deal with the problem of underquoting, it does raise other challenges for buyers. In this case, buyers must carry out the hard task of working out for themselves what a property is worth, when many are not experts in property. Is it better to have no guidance at all on price?... or some (mis)guidance that's inaccurate? The trio ponder this question. 4. How Victoria's underquoting regime misses the mark The Property Buyer explains the 'Statement o...

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