Current Market Insights
The Current Market Insights Podcast is brought to you by Harris Partners Real Estate.
Understanding the property market can be a challenging thing, with highs and lows, twists and turns. The media and agents tend to spread the news they want you to hear, with the advice they want you to follow.
Current Market Insights is an unbiased look into what is happening, what tips you can use to buy, sell, or rent, and that you wont find anywhere else.
Current Market Insights
Episode 103: A Year in Review — Cuts, Cracks & Crossroads
Hosts Ciaran O’Brien and Peter O’Malley wrap up a year where rate cuts calmed mortgage distress, yet inflation quietly returned through energy, services, and daily essentials. As AI reshapes jobs, rental markets hold steady, and policy reforms tighten compliance, we reflect on what defined 2025 — and what’s next for Sydney’s property landscape.
We also discuss:
- How rate cuts removed forced selling and lifted sentiment
- Inflation’s reacceleration through energy and service sectors
- Unemployment edging up as AI drives underemployment
- The tension between return-to-office mandates and automation risk
- Public sector hiring cushioning private sector softness
- First-home buyer incentives pulling forward demand
- Migration maintaining pressure on housing and rentals
- Rental conditions steady but poised for another upswing
- Investors chasing yield outside inner Sydney markets
- Tougher penalties and audits reshaping underquoting practices
- Reserve-price disclosure proposals threatening the auction model
- Vendor liability flagged as the missing accountability link
From all of us at Current Market Insights — Merry Christmas and a Happy New Year. We’ll see you in 2026.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Hello and welcome to another edition of Current Market Insights. I'm your host, Kieran O'Brien, and with me is Mr. Peter O'Malley. Peter. I today's a big episode. This listeners is going to be our last one for 2025. And what I I I want to start off by saying I think I've uh to you, Peter, I've thoroughly enjoyed the podcast this year. I really think we've uh achieved some good stuff. We've punched out a great number of episodes with some really interesting topics. Uh and I thought today's episode could really just be a really good opportunity to recap 2025 as a year uh in property, what's happened, what's happened more broadly in Australia, what's happened globally that's impacted things here for us. Uh, but a really good chance to tie up what I think's been a great year on the podcast. Uh so if you'll indulge me, why don't we spend this episode going through uh and just from the beginning get a sense of what's happened in 2025 that really has shaped uh what we see around us and in some ways how that could influence things as we move into 2026.
SPEAKER_01:Oh, thanks, Kieran. Look, if I uh uh uh assess sentiment in the marketplace between um late 2024 and where we are now, late 2025, I think one of the more subtle shifts in the marketplace is the disappearance, for the time being anyway, of of mortgage distress and and and and households tapping the mat and saying we've got to sell, we can't afford to hang on any longer. Yeah. So the the rate cut that happened in February 2025 was much much welcomed, much needed, and it was starting to get a little bit sort of spicy and scary there, um, as far as I'm concerned, in in late 2024, when I was just seeing an increase in people that were coming in for meetings, and some of them wouldn't say it, but you could sense it, and others were just outright saying we can't afford to hang on to this property, we've got to liquidate it. We've got to liquidate this investment property to save our family home, or this is our family home, we've got nothing else to sell to save it, it's got to go and we've got a downgrade. So that I never saw any of that at any stage during 2025, where I saw, you know, not a lot of it, but I saw too much of it by the same token in 2024, that's for sure. So that was the big shift. That's what the three interest rate cuts throughout the year did, is they gave the market relief and hope that the RBA were listening to their concerns. Uh, equally, um, we need to be pragmatic to know that we're now finishing the year with uh inflation rising, I think out of control again. Um I I've just felt in the last six to eight months anecdotally that uh um you know businesses everywhere are putting their prices up. I don't think that's anecdotal. On on uh on on Sunday, I went to buy a loaf of sourdough, a plain croissant, and an almond croissant and was charged$30.
SPEAKER_03:Yeah. Yeah, you I think you're going to an artisan bakery, but your point is true. Uh things I I actually just had a conversation this morning with uh cafe owner Barista, uh, and I always ask him every time I see him how's business, you know, how's the foot traffic? Are you keeping up with things? And he he says, you know, you know, every December, January is quiet, which might be true, but my anecdotal observation is cafes tend to be busier, you know, there's lots of people out and about, they're doing things. Uh and I said to him, I wonder if if this is a sign of people's confidence starting to slide, uh things getting a little bit too expensive. You know, I uh I know that my local cafe, you now pay over$30 for a big breakfast, which is crazy to me because it's bacon and sausage couple of days.
SPEAKER_01:That's right, yeah, it's a different cafe. I paid$31 for an omelette. Yeah, it's uh it's crazy. In contrast, my wife doesn't listen to this. No, I paid$31 for an omelette. I'll be sleeping in the boot of the car tonight.
SPEAKER_03:I think uh she hears enough of you, Peter. She wouldn't be listening to this, that's for sure. She's our number one listener, Kieran. That's uh that's true. Anecdotally, though, you know, I uh as you know, I've I've been overseas working recently and another similar, very similar country in economy to Australia. Uh yet those kinds of uh uh I guess luxuries you'd call them, you know, eating out cafes incredibly cheap, uh, but the cost of essential services and health and all those things are through the roof. Uh so it's interesting to me that there is there seems to be inflationary pressure everywhere, uh, but certain countries it's hitting different targets. And I, you know, I can't help but wonder if you know these cafe owners, these businesses, some of them are doing it to themselves uh by trying to take advantage, whereas others are just trying to pay the increased cost of the cost of energy is in everything.
SPEAKER_01:Sadly. And and uh that's that's uh for mine, aside from global inflation rising on the back of um Trump's tariffs moves, which is a deliberate move by Trump to uh to to export inflation and make things cheaper in America, um, is that uh he's exporting inflation into countries like Australia, then you throw the whole energy battle on top of that, and um firms have to increase their prices to survive, sadly.
SPEAKER_03:Yeah, yeah. I mean tariffs is a whole other thing that happened in 2025. I read recently that he's now being sued by a whole range of large US corporations uh to try and get back all of the pointless money that they've spent offsetting tariffs. Who knows where that's gonna go into the new year? But I I suspect they won't last too much longer, which hopefully will be good for the global economy.
SPEAKER_01:Well, look, um let me say this is that um if you're gonna take Donald Trump on through the courts, um, you'd need a pretty good lawyer because his uh his track record through the uh through the courts is pretty strong.
SPEAKER_03:Yeah, yeah. Have to take him on in a non-US court uh where the judges aren't one-sided, but that's that's a different discussion. Uh you're suggesting political corruption or judicial disruption, right? I don't know if I'm suggesting it so much as uh just observing it live. Uh so the interest rate cuts, you're right, they made a pretty big difference this year. I know myself, I felt some relief in my own circumstance, and I can't be alone. Uh, but I definitely feel like the cost of living more generally has increased everywhere else, which has made it feel like I'm no better off necessarily than I was. Uh but that's not the only thing that's happened this year. You mentioned inflation. Uh it did fall to 2.7%. It is rising again. There is a sentiment that it's going to continue to rise. Um, alongside of that, we often talk about the unemployment rate. I, I'll be honest, I haven't been keeping track of the figure lately. How, and and we have talked about the risk of uh rising unemployment and inflation, a stagflationary kind of picture. How has that picture evolved as we've come towards the end of the year compared with how it was looking, you know, six or eight months ago?
SPEAKER_01:Yeah, look, great, great point that you raised there. We we keep hearing, and I don't know if it'll play this way, but we keep hearing and reading that large corporates are doing as much as they're doing as much as they possibly can to outsource jobs to to AI. In times like this in the past, they were trying to outsource domestic jobs to India and global outsourcing, whereas now they're looking for to outsource to AI. And um the unemployment rate went to a four-year high of 4.5% in September. And it was like, oh, maybe it's happening here. And there's a lot in the media about banks that were saying we're restructuring, we're downsizing, we're doing something different. And the reality was they were just outsourcing anything that they could possibly outsource to AI. I don't know about you, but it just feels like I'm constantly um speaking to computers these days. You ring a major company, you get an AI receptionist, uh, you're going through that. Sometimes it's smoother than others, but the uh life talking to a robot um just seems to be uh expanding. Yeah. And it's basically because major corporates are struggling to grow their top lines. Um so the only way that they can increase the bottom line is by cutting costs, and the easiest gains in terms of cutting costs in the current environment is outsourcing jobs to AI. So that is a real risk for the economy, the property market uh to households uh in 2026 for mine, bar none, um, is unemployment rises sharply. Um what was interesting is that uh uh unemployment rate between September at a four-year high of 4.5%, then fell back to 4.3% in October, and everyone breathed a sigh of relief and said, Oh, maybe it was a rogue uh number. Let's hope it was. We don't know how many people were re-employed but underemployed. So I do have personal friends that lost their jobs in recent times and have gone on to get re-employed, but at a job that was less than than what they'd been made redundant from, and they nearly didn't get the job that they employed you know inquired about because the the employer thought that they were um uh you know too highly geared for it. Yeah, it was beneath their pay grade, and you'll stay here for six months, find something better and move on. You're overqualified. That's the phrase I'm looking for. You're overqualified for the role. And um my friends who are in that situation is like, I need this role, I want this role, I'll stick at this role, give me the role and I'll do a good job for you. So there's a lot of uh underemployment probably happening where people statistically um have a job, but it's below their capacity, which is not a place you want to be when you're in your 30s, 40s, or 50s and you've got peak expenses, therefore you need peak earnings.
SPEAKER_03:Yeah, I think about this often, Peter, as I move through my 30s, 40s and you know, soon enough 50s. Uh interestingly, though, at the same time, toward the end of I think actually all through 2025, but particularly towards the end, I've seen a ramp up in the rhetoric around the end of work from home as a concept. Well, not the end necessarily, but at least the the downscaling of work from home. Uh, and I have to wonder how some some of that will be driven as, you know, we we've mentioned in the past that the need for commercial buildings to remain viable, for businesses to hold on to their assets, you know, one way they can sell them offshore. Um, but you you've talked about how you think work from home has its downsides and and and upsides. Uh, but I feel like for major corporations, that rhetoric is changing. And I can't help but wonder uh towards the end of the year whether or not it is part of a greater push to say, well, if you're not willing to come back into the office, that's fine. I'm gonna replace you with Steve, the AI bot, uh, who cost me very, very little to run other than tokens and doesn't require anywhere to live. Because I feel like that sentiment is shifting.
SPEAKER_01:Look, uh I I think the sentiment is shifting. Not every employee um is reading the the play on this one. So only this morning I saw that Instagram has ordered all staff back to the office five days a week. Yeah, had enough. Not every workplace has the appeal as an employer that Instagram have to to that generation. Um, I don't have children that are working age young adults in the workforce at the moment, but if I did, I would be saying to them just because you can work from home at the moment does not mean that you should. I would encourage you to get into the office at every opportunity and build a relationship with your employer, your boss, your middle manager, so that if major cuts in your firm or your place of workplace take place next year, you've got a bond and a relationship with the hierarchy that you're one of the last to go if that's what's happening.
SPEAKER_03:Oh, look, and aside from that, I personally feel like being like I see the merit of both sides, but I also nothing nothing beats having that good camaraderie and kind of fellowship that you feel when you it's it's nicer to socialize and go in and work with your colleagues and kind of build some kind of as you say, a bond.
SPEAKER_01:I'm not speaking to that, I'm speaking to that generation that's now growing up, work from home and think that's normal. And you being a bit older know that it's not normal and there are benefits to being in the office. And uh you saw uh Peter Dutton, you know, blow blow his toes off during the federal election by saying that he was going to mandate for the public service return to office, and his poll numbers just imploded, and whoever told him that thought bubble was the right one to run with um was was was absolutely mad. So I get the sense that big corporates are waiting for the tide to turn in favor of them, as it always does. It's like it's like when in the property market, when sellers have got the advantage, buyers have to know that one day at some stage the cycle will turn back in their favour. When a market's really flat and buyers have got the advantage, they equally know they can't get too smart and too opportunistic in their bids, because at some stage, whether it be an interest rate cut or or something happened in the economy, the advantage will suddenly shift back to the sellers. It's the same in the employment market. Yes, there are staff that can say to employers at the moment, I'm not coming to work with you, I'm not staying working with you if I can't work from home three or five days a week, whatever it might be. And the employer has to sort of buckle to that. But at some stage, the environment will change, and the employer will be ruling the roost on this point. And uh I think uh one needs to be intelligently positioned for when that happens.
SPEAKER_03:Well, I think you're right. AI could actually be that leverage because they can say it's now reached a point of not autonomy, but you know, capacity, intellect, ability, whatever it might be, uh, that it can operate as efficiently or more efficiently in some cases than any one of you that are costing us X amount of money.
SPEAKER_01:Efficiency, ability, intelligence is a they're all interesting words with AI because I've held back on having a view on AI. Yeah, um, because I haven't quite seen where it's going. But um Yeah, what what I would say is that corporates, unlike small businesses like Harris Partners or the next one down the road, we we can't go too heavy into AI because the service levels with AI are not quite what they would be in many ways, and the communication levels are not quite what they'd be with a human. Yeah, but big corporates, your Qantas, your banks, etc., um, they don't care what your customer experience is like. Yeah. If you have your primary concern dealt with by a computer, that's satisfactory to them because they're dealing, they're dealing at the end of the day with the masses. Yeah.
unknown:Yeah.
SPEAKER_03:That well, they could always escalate to a human if if you aren't happy, right? They've got the ability to be efficient at volume at scale, yes, answering or fixing simple problems. You know, Corus is a great example. I recently did a bunch of stuff with some flights and things that I moved around. It was all done through AI, and I use that term quite loosely because it's, you know, it's not an intelligence necessarily. Uh, but the bot is trained to handle 99% of inquiries that I can put forward, but it hasn't a simple escalation protocol if there is something I need that it can't solve, which is so much more efficient for their bottom line.
SPEAKER_01:And that is great uh use of AI there from the quantus. But quantas don't really care if someone doesn't like speaking with AI. Yeah. Well, but you go and speak to Virgin's AI. Yeah. And it's the same with A and Z. They don't care if you don't like their AI, because what are you going to do? Change banks and use Westpac's AI? And what are you going to do? Choose your choose your bank or your airline based on who's got the best AI. Yeah, of course. You can see there that the big corporates where there's only a few players in each space can have this inflexible space with AI, where the small business that's competing against a thousand other small businesses, it's all about those, you know, fine moments, those customer service moments. So how AI really changes and impacts our lives will become more evident in 2026. But I'm not so sure efficiency for the customer is the same as efficiency for the business when it comes to AI.
SPEAKER_03:Oh, of course. But again, as you say, the corporates don't really care how efficient. Like they they want it to be seamless enough for the customer, but as long as it reduces the amount of time they have to spend on on you know less profitable tasks, uh, is obviously increased efficiency for them. I'm loving this conversation, but we do, in the interest of time, we do need to keep moving forward. Uh, you did mention Peter Dutton uh briefly, and you know, I'm sorry to our listeners that had to hear his name again. But uh one of the other things that happened this year was the Albanese government was re-elected. Um uh I guess what I'd love to get from you is what impact do you think that that re-election has had, if any, on the property market across the country? Uh and do you think that the you know Labour's stance or policies has had much of a real impact?
SPEAKER_01:Oh, I think I think their uh position politically has had an impact. In the short term, uh it was positive because the public sector employs so many people now, and that stopped the unemployment rate from rising higher. So even even numbers that are out um today as as we record show that the private sector is getting squeezed, um, but it's being picked up by the public sector. Um obviously the Albanese government brought forward their first home buyer incentives um uh to October 1, 2025, where I don't think they were due to be introduced until 2026. And they expanded uh the generosity of of that scheme. Um so yes, they've had their impact on on property. Um it's the Albanese government uh since they came to power in um was it May 2022? I think it was. Um uh it's the Albanese government that have overseen this massive migration surge uh post-COVID. Um that's having a huge impact on on the property market. Um the Albanese government is uh uh pushing the agenda about housing supply down through the next two levels of government. So yeah, uh John Howard used to say if you change the government, you change the country. And um when forget the last election, the one you just mentioned with Peter Dutton, when the country uh removed Scott Morrison and put Anthony Albanese um uh into the chair, they changed the country.
SPEAKER_03:Yeah. Yeah.
SPEAKER_01:So yeah. And the and the property market for that matter.
SPEAKER_03:Yeah, it's certainly it's certainly interesting. And I I it's unrelated to property, but I'm was interested to read not that long ago that now the uh Albanese government they're they're going so hard on uh reshaping the health department as well, and they're putting so much pressure on states to start providing more money. It's a really interesting uh yeah, it feels like they they've opened the floodgates and now they're scrambling and pushing orders and blame around the country to different levels of government to try and get them to clean up the mess and say, well, actually we can't we can't treat all these people and we can't house them all and we can't feed them all and we can't school them all, so just fix it. You've got to fix it, and and you know, we're not gonna give you any money unless you contribute more. Which seems like a pretty that's all in the name.
SPEAKER_01:Yeah, some people would see that as be mean. Others would say that the productivity rate per worker in Australia is too low. Yeah. And and and I see that. I I no matter where I turn, I see unproductive workers who are complacent in their place of employment. Not everyone. I'm not having a shot at everyone, but you can just tell that there is a there's a lack of efficiency per averaged out per worker across the economy at the moment that needs to be addressed.
SPEAKER_03:I I see lots of it driving past construction on any Sydney Road. There is just overemployed people everywhere. Yeah. Everywhere. Anyway, that's uh it's hot out there.
SPEAKER_01:So I think I think the the government, as I said, have employed so many people into the public service that they're trying to get the productivity per person up because the whole system ends up collapsing on itself if you're employing more and more people in the public service at the same time. The productivity is going down. Yeah. That's that's that's heading for a crash.
SPEAKER_03:I think the sentiment of everyone I know who's ever oh I'm not gonna say that's a generalized statement. Lots of people I know who either have or have sought out APS or public service jobs do so in many ways because of the lifestyle and the reduced productivity. I I actually think that's an attractive element of that kind of job, is you get secured leave, you get great conditions, you're well protected, it's you know, effectively unionized, you've got a great like there are so many perks to being a tiny cog in an enormous machine where no one really notices if you're doing 10% of the job. Uh I feel like it's you know, in many ways it's performing as expected, which is a shame.
SPEAKER_01:It might be the case in some government jobs and not so much in others. So I'm not here to say that everyone in the public service is underperforming, but statistically, no one can deny that there is an increase in in you know um a lack of productivity.
SPEAKER_03:Oh, look, absolutely. I you know, my only comment on this government, all governments, I honestly feel like it is so frustrating as someone who is an observer of politics and the decisions being made that you know Albanese's kind of plan at the moment to increase productivity, as you say, to correct all these issues. It is always a game of catch-up. You know, we make a poor decision, we ignore good advice, we ignore the white paper or whatever it might be that gives logical suggestions for what we need to do, and then every government ends up chasing their tail at an increased cost and a reduced efficiency. You know, it's the same scenario. They don't provide enough healthcare, don't provide enough housing, don't provide enough whatever, and then just stomp your feet and scramble to get it all covered at an increased cost to the taxpayer, at you know, just increased inconvenience. It's really frustrating, it's really frustrating to constantly see this happening.
SPEAKER_01:Well, you know, governments only react to crisis, don't they? Yeah. And do you know what I mean? Like the the the the crime is good pre-election. The crime in Victoria has been brewing for a long time, but it's now only at a you know nuclear level that that that it's going to rock the forthcoming state election down there to its core.
SPEAKER_02:Yeah.
SPEAKER_01:Um, because it's got you know, people are frightened, quite simply.
SPEAKER_03:I saw I have to laugh. I saw a Sky News headline recently uh that was a photo of Daniel Andrews scrambling into a building, and the tagline was former Premier Andrews refuses to address his solution for crime wave or something like that. Uh and it made me laugh because you know, he's been out of office for 900 days or some huge amount. Like he's been out of office for a long time. Uh, yet, as you say, it's been brewing for so many years that they're still looking to him, say, well, you know, you did this, what are you gonna do about it? Which I like the whole thing just seems comical because he's not in power, regardless. You know, anyway. This just seems like it's the political circus, Peter.
SPEAKER_01:Uh well, if it wasn't so serious, it would be a circus. But anyway, we won't get caught in that today.
SPEAKER_03:No, we certainly won't. Uh something else I want to talk to you about and get uh get your recap on, something we touched on all year at multiple points, and something that I've been closely involved in over the last few years is the rental market in Sydney. Um now, we know there or we've talked about the usual inflection points where there's uh periods of migration, pre-university, whatever it might be, uh, and the types of people coming into the country that are particularly uh strong contenders for certain properties, etc. Um, and given we've talked about the impact post-COVID on rental prices, uh, what's your take on where the rental market sits as we get to the end of 2025? Has it changed substantially from the start of the year? And is it likely to change into 2025? It was a stable year.
SPEAKER_01:It was a stable year, Kieran. Can I go back to the point I made about people coming in? The point I made at the start of this recording, people coming into the office and saying, tapping the mat and saying, look, but this this investment property's got to go. We need to sell the investment property to make sure we don't have to sell our home. Yeah. Um, what was happening 12 months ago is for every 10 investment properties that we sold off our rent roll, nine of them would sell to an owner-occupier. So the rental pool was shrinking. And I know one thing about samples and trends, if it's happening here, it's happening in other real estate offices. And sure enough, when you ask around the industry, that's what was happening uh 12 months ago. And and you know, 12 to 18 months ago, people were uh selling off the investment property to reduce their debt levels, and their investment property was going to own or occupiers. That combined with the migration surge and the lack of new housing, had the rental market rising sharply. Yeah. There's still too many um migrants coming into the country relative to the housing that we have and the housing, the little housing that is being built. So that underlying demand or pressure in the rental market is still there. But because of the falling interest rates and less vendors, uh less landlords selling out this year, the rental market was not shrinking by the same degree in 2025 that it was in 2024. Vacancy rates are very low. One way to offset um the rental market is people were leasing out empty bedrooms, clubbing together, and doing shared households, etc. etc. So as we finish the year, if we're doing a wrap on 2025, you can say in some ways the rental market was pretty boring. Yeah. But there's a lot of dry grass around, and it's only gonna take a match to send the rental market on fire and rising again.
SPEAKER_03:And do you think that match is New Year's, you know, student migration? Is it an interest rate rise? What's you know, what do you think is gonna be the the start of its inflation.
SPEAKER_01:Yeah, okay. The costs are gone up, um, the holding costs um are going up. Um, the property is now not producing the income that I need it to to offset the rising costs. Yep. That's the first thing. Then if interest rates go up, I'm not swallowing this interest rate cut to subsidize. This is the landlord mentality now. I'm not swallowing 100% of this interest rate rise to give a tenant a subsidized lifestyle, the rent has to go up.
SPEAKER_02:Yeah.
SPEAKER_01:Yeah. That's what we saw last time in 2022 to 2024 when they started hiking rates. And um, if they hike rates or even if they leave rates on hold through 2026, but inflation keeps rising, landlords will nearly be forced in their mind to put the rent up to offset the inflationary rate. That's a spiral because rents represent the large one of the largest components of the CPI basket. So that in itself will be pushing the inflation rate up.
SPEAKER_03:Which is what happened last time. Correct. Uh and then the conversations will go again, you know, I don't understand why my rent's going up so much, it's only a half, you know, 0.25% rent rise, you know, rate rise or whatever, and again we go through that cycle. Uh all throughout 2025, I asked you this question. If landlords find themselves uh deciding they can't increase rents to a point that, you know, is at the market level or they can't hold a tenant and they need to sell out, as we close out 2025, are there investors sitting around on the sidelines at the moment, do you think, uh, that would snap up either now or early into 2026 investments, or is that market still just not in the right shape?
SPEAKER_01:Not not in Sydney. I was at a real estate national real estate conference last week, and some of those agents in some of those markets are seeing investors come into them. But um, you know, we're talking, you know, properties in the sort of uh four to eight hundred thousand dollar range with a five-six percent yield. Well that's that's that's what's happening, that's what's happening there. But you know, if you're saying in inner city Sydney, um are we seeing that sort of behaviour from investors that are opportunists on the sidelines ready to come in? No. The state government, with their increased regulation to protect tenants, um, have driven landlords into other, you know, potential landlords into other asset classes. So this is what I said all along. I have no problem with protecting tenants' rights, but what you need to acknowledge the moment you start fiddling with tenants' rights is the more you push it in favour of the tenants, in the majority of instances you're making it less favorable for the landlord.
SPEAKER_03:Yeah, and as you say, it's very hard to justify a one and a half million dollar property on a 2% yield in Sydney when the ongoing costs are so high. As we wrap up this episode and with it 2025, the other major thing that's really burst through the real estate market this year has been underquoting. Um, we have talked a lot about certain instances, certain agencies. There's been headlines, you know, we've discussed a lot about what has happened where the government's made little changes, where the regulators, you know, shown some interest, potentially for the first time uh in a long time. Can you just give our listeners a bit of a recap? Uh, not so much a timeline necessarily, but what's happened in underquoting this year? And as we close out the year, where are we at on this this battle? And where do you think the uh the regulator's going to head in 2026?
SPEAKER_01:Oh, the the regulator's going to head into real estate offices. They've been in and out of real estate offices literally for the back end of the year. Good. Yeah. So uh the Sydney Morning Herald and the Melbourne Age um through their uh uh story Blind Bidding, uh investigation, blind bidding for the back half of the year really brought this into uh people's uh uh awareness, if you like. But uh some of the things that have gone out there that people have probably heard in the press is the penalties for underquoting have risen from$22,000 to$110,000. Suspensions of licenses, including um one of the city's most prolific writers of business. He's still suspended uh at the moment, I believe. Yep. Um uh twenty-five agencies are under deep investigation in New South Wales. Um they apparently did a blitz on the Central Coast, the Department of Fair Trade, last week and um have uh snagged another person by asking for files. Um so if they're getting to the crux of underquoting, if they're getting to the crux of underquoting and getting the real culprits that are uh you know bringing this tactic into the marketplace, I'm all for that. Yeah. Um I I saw a real estate agent down in Melbourne earlier in the year that was done for underquoting, but it was administrative, it was a paperwork issue. That's you know, because a real estate agent is paperwork is sloppy, does not mean that they're a rampant underquota misleading buyers. Yeah. Um so I just hope that they're not looking for scapegoats and trying to you know have um Pyrrhic victories here over people who are not really doing the wrong thing but have been caught out from an administrative perspective. In Victoria, they're gonna make real estate agents as it stands advertise the reserve price seven days out from the auction. That will it's a great idea. It's a great idea and it'll absolutely shatter the auction system because the auction system relies on the agent promising a high price to the vendor to get the listing and saying the best conduit to achieve that price is an auction, and then getting the buyers along by underquoting. And when the buyers on the whole, not every instance, but on the whole, when the buyers know what the vendors are really looking for, they won't turn up.
SPEAKER_02:Yeah.
SPEAKER_01:So if if that's implemented in Victoria, which I I don't care whether it is or it isn't, that will absolutely shatter uh the auction system. They haven't said in New South Wales they'll go to that degree. I think the regulators understand that the real estate agents have a job to bridge a gap between the buyer and the seller. And if you ask a vendor seven days before the auction what's your reserve price, it is going to be higher seven days before the auction than what it is under the pressure of the moment on the day. And vendors every Saturday um drop their reserve price during the auction to get a sale. Yeah. So um uh I again don't mind whether the New South Wales do or don't introduce that measure, but it will make running auctions very, very difficult. Um, what I do know is that there's 25 firms that um um have been tracked by AI and um you know high nuance data, and I know this for a fact. Um they've they've the the firms have been tracked, and the top 25 officers in terms of standing out as having real questions to answer around underquoting are being investigated as we speak. So we'll see where that goes.
SPEAKER_03:Yeah, we'll certainly uh we'll certainly have to follow up with that story next year when we do get back into things. Uh my final question for you then, Peter, for 2025. If publishing the reserve price out seven days before uh is potentially like it seems like it could be a good option, maybe it's a bad option, we don't entirely know. In your experience, and you've been doing this for a long time, do you have any thoughts on what might be the most elegant solution that fair trading could implement to solve this problem once and for all? So that agencies just don't feel the need to underquote.
SPEAKER_01:Uh agents will always feel the need to underquote. I said this before. Why do agents underquote Kieran? Because it works. Because it works. Yeah. So because it works, but if it didn't work, it might be it might be a low-rank, suspicious, dirty, filthy sales tactic, but the reality is it works. Yeah. Which is why agents do it.
SPEAKER_03:It's why Black Friday works, you know, get them in the door, low price, you know, put the goods, the the essentials at the back of the shop, you know, that kind of thing.
SPEAKER_01:The harsh reality is once one agent in a marketplace starts underquoting, they inadvertently force the competitors to do the same. Yeah. We've said it before, you've got two two million dollar houses. One's promoted at two million, the other's promoted at 1.6. Where do you think the 30 buyers are going on Saturday morning? Yeah, well, of course. They're gonna go to the cheaper one thinking there's a bargain. Yeah, and yep, some of them will say this is gonna go for a lot more, some of them will say, Oh, maybe we can get it for one nine. They can't help themselves thinking they might get a bargain on the day, but it just draws people in all the time. Yeah, yeah. So um, I said in 2015 when New South Wales had its first earnest attempt at stopping underquoting, um, that if these measures are successful, this these measures will will blow up the auction system, but they weren't successful, and underquoting has got worse since 2015, not better. Um one of the things that has still not been mentioned by anyone is the vendor needs to be on the hook as far as penalties go. Yeah if they are complicit in underquoting. So the age, if anyone um um hasn't heard it, you should look around for it. The age recorded a real estate agent from Marshall White, which is a massive real estate firm in Melbourne, coaching a vendor on how to underquote and how to fudge the paperwork and the merits of doing so.
SPEAKER_02:Yeah.
SPEAKER_01:And the vendor went along with it, and then the recording was released to Marshall White, and they were forced to terminate the salesperson in question and said, that's not company policy, this is a rogue employee. I'll leave that for others to judge. But the reality is that the vendors are complicit in the underquoting, and the way they stopped dummy bidding was saying if any vendor or real estate agent is caught engaging in dummy bidding, they will be fined. Where at the moment only the real estate agent can be fined for underquoting.
SPEAKER_03:Yeah. Yeah, look, I certainly hope that uh fair trading continue to bring the hammer down here and make some significant changes to the industry because it uh can certainly use a lot of cleaning up. Look, uh, really great recap, Peter. It's um it's been uh a pleasure working on the podcast with you in 2025. We've covered across a whole range of topics, uh, and I think we've brought some good information out to our listeners. So I thank you as always for coming in today and uh for coming in every time we we catch up and talk. My pleasure, Kieran, all the best and a Merry Christmas. All the best and Merry Christmas to you, and a very big thank you to all of our listeners for being with us through 2025. Uh, we wish you all from the team here at Current Market Insights, we wish you a Merry Christmas and a happy new year, and we hope to see all of you next year. As always, thanks for listening, and we'll talk to you next time.
SPEAKER_00:Thanks for joining us on the current market and summons pop and cups.
