PHOTO: FILE
In Sydney‘s real estate market, there’s a cheeky saying among agents that reveals a questionable practice: “Price it low and watch it go, but price it high and watch it die.” This phrase highlights a tactic that, while technically illegal, seems to be growing in popularity.
Over the past few months, news.com.au has monitored various property listings, noting the price guides provided by realtors and the final sale prices. The findings reveal significant disparities between the two, with some properties selling for $400,000 to $500,000 above the guide, and in extreme cases, more than $1 million higher.
While real estate agents and their industry body claim that these discrepancies are due to a rapidly rising market and intense buyer competition, some experts argue otherwise. They believe that deliberate underquoting is rampant, designed to lure in buyers and create artificial competition, ultimately driving up prices.
Over a two-month period, news.com.au tracked property listings across Sydney’s inner and middle-ring suburbs, comparing price guides with eventual sale prices. The results showed extraordinary premiums:
- A mid-sized house in the inner west was guided at $1.9 million but sold for $2.24 million, a 17.89% difference.
- Another house in the inner south was listed at $2.1 million but fetched $2.45 million, a 16.6% increase.
- A large house in the inner city had a guide of $2.7 million but sold for $3.12 million, a 15.5% premium.
- In the inner west, a mid-sized house listed at $3 million sold for $4.25 million, a whopping 41% difference.
Due to legal constraints, specific properties and agents cannot be identified, but the trend is clear: in most cases, there was a significant gap between the guided price and the final sale amount. For example, a three-bedroom house in Sydney’s inner south had a guide price of $2.2 million but sold for $3.11 million—an increase of 40%.
Similarly, another property in the same suburb was listed at $2.1 million and sold for $2.45 million, a 17% premium. In the inner west, a two-bedroom house advertised at $1.5 million sold for $1.78 million, an 18% increase.
These findings suggest that deliberate underquoting to generate higher bids might be more common than agents admit.
SOURCE: NEWS.COM.AU