In his recent column, he said there were many reasons why he held that controversial view.
“Let’s say, hypothetically, you have 100 properties going to auction this Saturday and at every one there are four registered bidders who are competing strongly,” he said.
“And let’s say, as an example, that regardless of this robust bidding, the seller says, ‘Nah. I don’t want to sell at that price’, which, of course, is their prerogative.
“So, that would mean the auction clearance rate was zero per cent, which would be interpreted that the market is absolutely terrible.
“The thing is the market isn’t terrible, because there was strong bidding for the property, it’s just the sellers weren’t prepared to listen what the market was telling them about price.”
Justin added auction clearance rates don’t reflect market strength – they reflect sellers who are prepared to accept market conditions.
“A more accurate measure of market strength is the number of active bidders per property, but no-one records those numbers at a macro level,” he said.
“In reality, the seller ultimately chooses to sell, or they don’t – whether there are five bidders or 50.
“At the end of the day, agents only can influence sellers by providing them current market information – including buyer feedback.
But they cannot control whether vendors ultimately decide to sell a property at auction.
“And that is why auction clearance rates are a barometer of seller – and not buyer – sentiment, if you ask me.”
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