More than half of Australians do not trust what the real estate industry says about the property market, according to a new national survey.
According to the first quarterly LEDA Real Estate and ReachTEL Consumer Property Confidence (CPC) Index, 53 per cent of the 1,700 people surveyed said they did not trust what the real estate industry said about the property market.
An additional 27 per cent indicated they sat on the fence when trusting the same news, and only 20 per cent said they trusted agents.
LEDA founder Barry Goldman told Real Estate Business the findings were unsurprising.
“In principle, the industry has a pretty poor reputation when it comes to truth and honesty,” he said.
“The biggest issue is that most of the industry commentary is generated by the self-interest of real estate agents or, alternatively, the self-interest of the media that publishes advertising for real estate.
“Effectively, the media wants advertising sales, so they will always try to put a positive slant on the real estate market - irrespective of the conditions.”
While Mr Goldman conceded there may be some truth in this type of market commentary, he said mostly people were tired of cliché statements.
“People want more anecdotal consumer-based evidence of things, rather than the standard generic statements that come out every week from 95 per cent of the journalists across the country,” he said.
Mr Goldman explained that in practice, agents were talking to homeowners and selling a false hope of a higher sale price to secure business. As a result, homes were sitting on the market for long periods because nobody was willing to pay those prices.
Mr Goldman said the CPC Index survey had been created in order to gain a consumer perspective on the industry.
“The industry is very good at congratulating itself on the back all the time, but we should be ‘listening’ to our marketplace, not ‘telling’ our marketplace," he said.
Mr Goldman said tactics included overvaluing to get listings.
To improve trust amongst the public, agents need to be honest with clients, Mr Goldman said.
“They should be straight up from the day they meet them. I don’t believe they should promise anything they can’t deliver. They should be absolutely up front with what they think a property is worth, rather than adding money to it all the time,” he said.
Director of hockingstuart Ringwood Karen Vogl agreed, saying agents could still be positive about market results, but they needed to be clear with potential changes in circumstances.
“I think it’s important to explain to owners that things happen, things don’t always go to plan, but in order to establish some sort of trust between you and your client, you make sure they know that you have the skills and the process to be able to deal with things when they don’t go to plan,” she said.