Are real estate agents underquoting, or beating expectations in a rising property market?

PHOTO: According to CoreLogic, Australian home prices rose an average of 1.7 per cent in November. ABC News: Ian Cutmore

It is a problem that’s long been a feature of a rising property market: too many buyers battling for too few homes in the inner suburbs of Sydney and Melbourne.

Key points:

State laws impose penalties for underquoting, but proving it happens can be tricky
Real estate agents say the reason properties sell for $100,000 or more than advertised is due to market momentum
But buyers fear they are being pushed into spending more than their initial budget to compete for homes

ABC News did a call-out on social media asking if people were being underquoted for properties in Sydney and Melbourne.

A number of Australians wrote in saying they thought properties had been underquoted because they sold $100,000 to $200,000 above the advertised price.

But the real estate agents who sold the properties said the price advertised was within the reserve price of the vendors.

The agents said the fact the property ended up going for well above what they expected at auction was not underquoting, but the consequence of a hot property market.

According to CoreLogic, Australian home prices rose an average of 1.7 per cent in November.

Sydney led the gains, lifting 2.7 per cent for the month.

Real Estate Institute of Australia president Adrian Kelly says the fact homes are selling for more than their advertised price is an issue of limited supply amid growing demand.