Inflated and inaccurate auction clearance rates may push misinformed buyers into the market according to AquAsia strategist Mark Bayley. Mr Bayley, a chartered financial analyst for the corporate advisory company, has accused property data providers and media commentators of provoking over- excitement based on misleading figures. This is because auction clearance rates are generated from the auction results that estate agents report, and a proportion of auction results are therefore not included in calculations. “At best these figures provide only a rough guide to a small sample of the overall sales, and that sample is inherently biased,” he said. “Looking at the data over the last six months, the reported clearance rate cannot even be relied upon to give a basic trend,” The leading data providers agree that clearance rates represent only a portion of sales, but say their collection figures are freely available and transparent ‘The weekly clearance rates generate interest because they are a fast and easy indicator of the current market,” RP Data senior analyst Cameron Kusher said. ”They’re real-time results, and even though they’re indicative of just a portion of the market, they are still a key metric for how things are going on the ground.” Clearance rate compilation starts on a Saturday afternoon after most auctions are held. It depends on real estate agents reporting results and the data companies produce their figures on a Saturday evening or Sunday morning. The rate is generally revised later in the week after more figures are available. The Real Estate Institute of Victoria posts its results with a disclaimer noting all auction results may not be included. REIV chief executive Enzo Raimondo said some agents do not report on Saturday and might be tied up in negotiations with potential buyers. By 6pm last Saturday, the RElY had collected 900 results from 1090 auctions; by Wednesday, 1052 results were available. 21 had been withdrawn and 20 postponed. Andrew Wilson, senior economist of the Fairfax-owned Australian Property Monitors, said it was natural that revised auction rates provided in the days after the weekend came down from Saturday evening figures. “The clearance rates are an accurate snapshot of the market in Sydney and Melbourne, where you have the bigger sample sizes,” he said. “In cities like Adelaide, Perth and Brisbane, where you don’t have half as many, you can’t really read into them.” Mr Bayley said that week after week, more auctions were scheduled than were reported on after. “With so many auction results that aren’t recorded, should so much credence be given to these dubiously calculated clearance rates?” he said. “At the moment, these clearance rates are heavily referenced by the RBA, banks’ analysts and media.” Last Saturday, APM reported83.7 per cent for Sydney, RP Data 78.6 percent “By my calculations, the real clearance rate was a meagre 49.9 per cent – 394 from 789,” Mr Bayley said. “Although that 49.9 per cent rate won’t set the property market alight, the figures calculate are transparent, real, and reflective of what is really happening but the ones that are used by the industry and media are not.