HOW THE MARKET’S TRAVELLING

It’s hard to believe it’s already March – where does the time fly?

I know what I’ve been busy with – buying, selling and leasing properties across the Eastern Suburbs.

My first impression of the year confirms to me that the market will remain strong, though hopefully the spectacular percentage increases experienced in 2014 and 2015 will be modified to a more reasonable rate of growth in the 3-5% range. If the number of enquiries we have received since the start of the year are anything to go by, then the Eastern Suburbs property market will be in good shape.

However, I’d be remiss not to inform you all about the biggest change in the way real estate agents operate. This new practice is as a result of new government legislation, which was introduced on 1 January 2016. This new legislation was designed to combat ‘under-quoting’.

So how will this effect the way we operate? Well, we will no longer will we be allowed to say “more than $X” or “between $2.5–$3 million”. The maximum range we will be legally able to ‘quote’ will be a 10% variance. In other words, if the property is quoted at $1,000,000, the range we can quote up to is $1,100,000. So we will not allowed to say “over $1million” or “low one millions”.

While it may seem pretty straightforward, it will not be an easy task. You see, the valuing of real estate in the Eastern Suburbs is a very inexact science and it can be difficult to predict within 5% either way the value of a property.

However, it could be worse! Imagine, if like our northern neighbours in Queensland, we weren’t able to – in the auction process – quote any price! I couldn’t imagine our savvy clientele putting up with that!

The new law doesn’t, however, force an agent to quote a price. This can be advantageous as it is often very hard to quote a price until several open houses have occurred. An agent is permitted to provide interested potential purchasers with “a list of comparable sales” which can help determine an agent’s estimate of market value for a property. Another area the law does not affect is putting any constraint on a reserve price by the seller.

Whatever new legislation is enforced on the real estate industry, you can feel reassured I will guide buyers appropriately and keep all my vendors fully informed.

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