The head of the Australian Competition and Consumer Commission said over the weekend that changes to real estate laws will see homeowners fined for under-quoting a property’s expected selling price.
Graeme Samuel said the new laws, which come into effect on 1 July, will also target vendors if they are involved in the practice and will have set a maximum fine of $220,000.
“That $220,000 (fine) is a large chunk out of the sale price of your house. So clean up your act now because, if you do not, the ACCC and state bodies will come down on you.”
If a buyer believes a house will sell for a certain amount, and then finds the vendor’s selling price is higher, the buyer can complain to the ACCC, which will then demand the vendor to produce proof they intended to sell for $500,000. The vendor can then be taken to court, where the watchdog could ask for “substantial fines”.
“The new law will allow the courts to order the offender to pay restitution… and penalise the offender that is what is groundbreaking,” Samuel said.
But it seems the announcement has taken some in the industry by surprise. David Airey, president of the Real Estate Institute of Australia, says he was surprised by the comments and hadn’t heard from the ACCC about any such changes.
“We’ve heard nothing, had no contact at all from the ACCC, so we’ve been taken by surprise, it’s quite surprising really.”
“They’re talking about very substantial fines for agencies. As the REIA, we’ve been very cooperative with the ACCC with making auctions more transparent but this is totally surprising. Why didn’t we hear from them? Why didn’t they come to us saying, ‘We are going to do this?’ I would have thought that would have been the polite thing to do.”
Meanwhile, the Melbourne property market has recorded its 10th consecutive week of clearance rates above 80%, with the chief executive of the Real Estate Institute of Victoria saying the results could have an impact on prices.
“The residential auction market is now into its 10th week with clearance rates in excess of 80%, a factor that is likely to have an impact on prices,” chief executive Enzo Raimondo said in a statement.
“The extent to which the strong demand is affecting prices will be clearer next weekend when the REIV releases its June quarter median prices. At that stage we will see, from a price point of view, which segments of the market have been strongest.”
Melbourne, the country’s second-largest property market, recorded 307 sales totalling $192.48 million. Next week the city is expected to see 428 auctions.
Sydney also recorded a good result of 75%, with 112 properties sold out of 145 on the market. Total sales reached $70.57 million.
Brisbane also had a good weekend, recording a clearance rate of 59% with 13 properties sold at a total of $5.3 million, while Adelaide saw a clearance rate of 65% for 11 properties sold at $4.31 million.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
