New analysis by property data app Homer has found that fewer than 4% of Australian real estate agents list properties within 3% of the final sale price. In Sydney, when a home sells above the advertised guide, the median overshoot is A$117,500 – the largest dollar gap in the country.
The study, which examined published price guides for residential sales in the six months to April, showed that across capital cities, typical above-guide sales exceeded the advertised range by 4-9%, while below-guide sales fell short by only 3-5%. Perth and Adelaide had the highest proportion of sales above the guide at 76% and 73% respectively. Melbourne was the sole capital where more homes sold below the guide (53%) than above (37%).
Henry Pedersen, chief executive of Homer, said the industry still had a widespread transparency problem. 'Ultimately, it leads to buyers engaging with homes they were never realistically in the market for,' he said, citing wasted time, money and emotional stress. He described it as 'mind-boggling' that a property's reserve price could sit outside the advertised range.
Both New South Wales and Victoria have laws against deliberate underquoting. In NSW, agents can be fined up to A$110,000, while Victoria has introduced guidelines requiring agents to use the most appropriate comparable properties when estimating prices. However, Michael Fotheringham of the Australian Housing and Urban Research Institute said underquoting remained hard to prove, particularly when auctions reached the advertised range but were then passed in. 'If they are consistently underestimating, it's suggesting that those rules aren't having the effect they need to,' he said.
Fotheringham also linked the issue to the growing shift towards auction sales rather than private treaties, reflecting a broader change in attitudes towards housing in Australia.
