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Day Lila

Thursday, 27 August 2026

27 Aug · Money · In brief

Money · Thursday, 27 August 2026

Money, in brief

10 stories · 31 sources

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What is moving · 1 of 4

Fear of missing out

Building ↓

a crowd signals demand, and the signal pushes bids past value [11]

What is moving · 2 of 4

Buyer bargaining power

Building ↑

18.8% of US listings carried a price cut in June [10]

What is moving · 3 of 4

The information gap

High ↓

most Australian sellers need not reveal a reserve price [11]

What is moving · 4 of 4

Faith in the auction

Easing ↓

Australian auction listings fell about 20% in a year [13]

The winner's curse: why winning a bidding war usually means having judged the price worst

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A study of nearly 14 million US home sales found buyers who paid above the asking price earned about 1.3 percentage points less each year. [2]

Who is involved

Who is involved

Why it matters

Watch whether published reserve prices calm the bidding in Victoria or simply move the anchor upward - the same reform could plausibly do either. [11]

How it works

The prize goes to whoever was most wrong

How it works

When nobody can value a thing, an auction does not find its true price - it finds the largest overestimate in the room.

How it works · step 1 of 5

Nobody knows what the thing is really worth

How it works · step 2 of 5

Each bidder guesses, and every guess is a little off

How it works · step 3 of 5

The rule of the auction hands it to the highest guess

How it works · step 4 of 5

So the winner is whoever overestimated by the most

How it works · step 5 of 5

Add bidders and the top guess climbs further from the truth

The twist

Winning is not proof of good judgement - it is evidence against it, because the room hands the thing to whoever was furthest out.

The catch

It only bites where the value is uncertain and roughly the same for everybody.

The catch

If a thing is genuinely worth more to one buyer than to any other, paying most can be right.

The whole

Every bidder in that room was careful, and the room still produced a price nobody thought sensible.

The whole

A seat in that room shows one number - its own - which is why a room can be wrong while everyone in it is reasonable.

Why it works on people

Winning arrives instantly and feels like judgement rewarded, while the price is only tested years later, when the house is sold again.

Who gains

The overpayment is money that moves straight from the winning buyer to them. [2]

Who pays

The study found they are more likely to overpay in a bidding war, and so more exposed to weak returns and default. [2]

Nobody knows yet

How many US buyers actually paid under the price last year.

Two figures circulate for the same period: 62% below the original listing price, and 60% below asking. They are not the same measure. [8][9]

Nobody knows yet

Whether the winner's curse works the same way outside the United States.

The 14-million-sale study covers US housing only, and its author says other countries remain an open question. [2]

Nobody knows yet

Whether publishing reserve prices will cool bidding or raise it.

The same analysis says clearer signals could temper emotional bidding, or anchor buyers higher if sellers respond with bolder reserves. [11]

Good news

For thirty years the winner's curse was mostly a story economists told each other. Now fourteen million sales have measured it, which is how a hunch becomes something anyone can be warned about.

The short version

That's the story in short.

The whole story has 21 more parts.

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The whole story, in 21 parts ↓

Part 1 of 21 · Who else is involved

Part 2 of 21 · How it unfolded

Part 2 of 21 · How it unfolded

Part 3 of 21

Held for the typical 6.3 years, that gap works out at roughly an 8.2% overpayment. [2]

Part 4 of 21

Bidding-war winners were also 1.9 percentage points more likely to default on the mortgage. [2]

Part 5 of 21

They resold faster than other buyers, which suggests the extra money bought auction fever rather than a house they loved. [2]

Part 6 of 21

The cause is arithmetic, not foolishness: everyone guesses, the highest guess wins, so the winner is whoever overestimated most. [1]

Part 7 of 21

An auction sells to the highest bid, whether the bidding is open in a room or sealed in envelopes. [26]

Part 8 of 21

Three engineers at an oil company named it, after noticing the drilling plots they won held less oil than expected. [1][3]

Part 9 of 21

Richard Thaler collected it in a 1992 book of economic oddities, and published a new edition with Alex Imas last November. [3][4][5]

Part 10 of 21

It runs well beyond auction rooms - house bidding wars, company takeovers and clubs chasing young players all have the same shape. [3]

Part 11 of 21

A four-bedroom Yorkshire Dales house guided at £19,000 drew 123 bids and sold for £263,000. [6]

Part 12 of 21

Its buyer inherited a 1996 planning condition requiring an occupant to work at the local pub, which closed in 2025. [6]

Part 13 of 21

The effect is uneven: the study found lower-income, Black and Hispanic buyers are more likely to overpay in a bidding war. [2]

Part 14 of 21

San Francisco is the exception, with single-family prices up about 17% in a year to a $2.2m median while supply fell roughly 45%. [7]

Part 15 of 21

Most of the US market runs the other way - about 62% of buyers paid below the original list price last year, the highest share since 2019. [8]

Part 16 of 21

In June about 18.8% of American listings carried a price cut, and the median asking price was down 2.5% on a year earlier. [10]

Part 17 of 21

Nashville shows the swing: a median listing price of $453,000 in early 2022, a $590,000 peak in July 2023, then $529,000 by March 2026. [28]

Part 18 of 21

Zoopla put the average UK home about £16,000 below its listing price last November, with price growth down to 1.3% a year. [17]

Part 19 of 21

Sellers are warned about the mirror risk - price too high and the home sits, price too low and money is left on the table. [27]

Part 20 of 21

What tips a market toward buyers is simply more homes than buyers, which shows up as longer selling times and price competition. [29]

Part 21 of 21

Australia sells homes by open outcry auction, and Victoria will soon force sellers to publish their reserve price seven days ahead. [11]

England and Wales move to binding sales

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Ministers propose making an accepted offer legally binding much earlier, with a financial penalty for pulling out without good reason. Scotland already works this way. [14]

Why it matters

Gazumped buyers currently have no legal recourse, and Rightmove says more than one in five sales fall through.

Stamp duty may move to the seller

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The UK government is said to be weighing a shift so the tax falls on sellers and only above a threshold, hitting London and the south-east hardest. [16]

Why it matters

One study found a two-point rise cut how often people move by 37%, which is a tax on the wrong thing.

Australia's auction habit is shrinking

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Total listings rose 22.8% over twelve months while auction listings fell about 20%, and roughly 40% of listed homes now sell before the auction happens. [13][31]

Why it matters

Thirteen years of data show a home that fails at auction later sells about 1.3% below what a private sale would have made. [12]

Who gains

An auction removes the back-and-forth of private negotiation, which the researchers name as its main practical advantage. [12]

Victoria will make sellers publish the reserve

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Agents must disclose the seller's genuine reserve price at least seven days before an auction, under laws going to state parliament next year. [11]

Why it matters

It targets underquoting - advertising below the expected price to build a crowd - already illegal but hard to police while reserves stay private.

Nearly £5.9bn of UK property sold under the hammer

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Auction sales rose from £5.5bn in 2024 to almost £5.9bn in 2025, and England and Wales recorded 14,025 mortgage repossession orders in 2024. [15]

Why it matters

One lot in a London room carried a guide price of £1, and one seller was in the room, still living in the house.

Who gains

Nearly £5.9bn of property reached UK auction rooms in 2025, some of it guided at a few thousand pounds. [15]

Who pays

Three hundred lots went through one London sale, hers among them, and the gavel did not pause for her. [15]

A card settlement breaks the all-cards rule

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A settlement between Visa, Mastercard and US merchants ends the rule forcing a shop that takes one Visa credit card to take every Visa credit card. [18]

Why it matters

It opens tiered pricing at the till, the promised fee cuts run out after five years, and the fee itself is roughly 1% to 3%. [19][20][21]

Who gains

A fee of roughly 1% to 3% on every card sale funds the rewards offered to the same shoppers. [21]

Who pays

The swipe fee is charged to the shop, never printed on the receipt, and can reach the shelf price everyone meets. [21]

A 13-month clock decides who gets scam money back

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UK rules from October 2024 promise repayment within five working days up to £85,000, but the bank must be told within thirteen months of the last payment. [22]

Why it matters

One woman paid £19,000 in October 2024 and only realised in March 2026; Lloyds refunded in full a day after BBC Money Box asked.

Who pays

A £19,000 payment made in October 2024 was refused because the loss was only noticed in March 2026. [22]

Nobody knows yet

How many scam claims die on the 13-month deadline.

The banks' trade body says the number is small but publishes no figure, and the clock runs from the payment rather than the discovery. [22]

Banks wrongly refused a third of fraud complaints

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The ombudsman judged Monzo wrong in 34% of 3,372 cases, NatWest in 33% of 1,972 and HSBC in 32% of 2,535. [23]

Why it matters

Industry figures counted 185,733 tricked-transfer cases in 2024, with £450.7m taken and £267.1m repaid.

Owning a home costs nearly as much as buying it

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Typical American non-mortgage home costs reached $24,529 a year, up from $17,958, against the $26,508 a year spent on the mortgage itself. [24]

Why it matters

Closing costs add a national average of $4,661, about 1.6% of the average sale price, and only 37% know a 20% deposit is not required. [30][25]

The truth, across the day

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What's really going on

An auction is sold as a way of finding a thing's true price, but where the value is unknown it mostly finds the largest error in the room.

That's the whole Money day.

10 stories, 31 sources.