Commerce Commission charges Bayleys, Barfoots, Harcourts, LJ Hooker and Ray White with price fixing

Commerce Commission charges Bayleys, Barfoots, Harcourts, LJ Hooker and Ray White with price fixing

The Commerce Commission has filed price fixing charges against most of the country's largest real estate agencies, including Barfoot & Thompson Ltd, Harcourts Group Ltd, LJ Hooker NZ, Ray White (Real Estate) Ltd, and Bayley Corporation Ltd.

The charges filed in the Auckland High Court allege the companies breached the Commerce Act in 2013 and 2014 by agreeing on a planned industry response to Trade Me's changed pricing model.

The Commission alleges the conduct occurred in response to Trade Me's change from a monthly subscription fee to a per-listing fee for properties advertised for sale on its website.

The Commission alleges the parties agreed that vendors would have to pay the listing fee to have their property advertised on Trade Me and that the agencies would not commit to any preferential or discounted listing fees with Trade Me.

The Commission also alleges that Property Page (NZ) Ltd aided and abetted the agencies in establishing and implementing the agreement.

Property Page is owned by Harcourts, LJ Hooker, Ray White, Barfoot & Thompson, and the company in turn owns 50% of Realestate.co.nz which is a competitor to Trade Me Property.

The Commission has agreed to a settlement in principle with Bayley Corporation Ltd, to resolve the proceeding against it.

That would involve Bayleys admitting that its conduct breached the Commerce Act and paying a penalty to be imposed by the court.

The Commission said settlements had not been agreed with any of the other defendants.

The Commission has also filed charges against some real estate agencies and individuals in Hamilton and the Manawatu.

In Hamilton the Commission alleges Monarch Real Estate Ltd (trading under the Harcourts banner), Lodge Real Estate Ltd, Lugton's Ltd, Online Realty (trading under the Ray White Banner) Success Realty Ltd (trading under the Bayleys banner), and two individuals that have not yet been named, breached the Commerce Act by by agreeing on a planned regional response to Trade Me's changed pricing policy.

This is alleged to have involved the parties agreeing that all listings would be removed from Trade Me's website and that vendors would have to pay to have their listings listed on Trade Me.

The Commission said the two individuals who have not been named work for Monarch and Lodge.

In the Manawatu, the Commission has filed proceedings against Property Brokers Ltd, Manawatu 1994 Ltd (trading under the LJ Hooker banner), Unique Realty Ltd and one individual, alleging that they breached the Commerce Act by agreeing with each other and other agencies on a planned regional response to Trade Me's changed pricing model.

The Commission said it had agreed in principle to a settlement with Unique Realty Ltd, which would involve the company admitting its actions breached the Commerce Act and to pay a penalty to be imposed by the court.

The Commission said the unnamed Manawatu individual facing proceedings works for Property Brokers.

The Commission said it also believed that a number of other Manawatu agencies were likely to have breached the Commerce Act and had therefore issued warnings to: Coast to Coast Ltd (trading under the Bayleys banner); Alrose Ltd (trading as RE/MAX Palmerston North); Rural and Lifestyle Sales.com Ltd; Real Estate House Manawatu Ltd (trading under the Ray White banner); Harcourts Team Manawatu Realty Ltd (trading under the Harcourts banner); Watson Real Estate Ltd; PGG Wrightson Real Estate Ltd; and Monty's Real Estate Ltd.

(Here's some background to the dispute between real estate agents and Trade Me, reported by interest.co.nz last year, here and here).

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Isn't responding adversely to price changes a free market mechanic that we want? It seems like the commission has been commissioned to do an inquest by trade me property!

https://en.m.wikipedia.org/wiki/Cartel

Competition serves the public at large, not collusion.

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To control the house price, we need to control agent's commission. Most of agents are charging almost 4% of the sale price, it is far too high. In Australia the agents are charging 2% of the sale price.

yes why dont they look at how they all charge the same rate for the sale

I don't beieve they do. The market is very compeditive and commissions are regularly negotiated down by vendors who canvas the market before deciding on a sales rep. There's always the option to sell privately, list with a web site or whatever and after all a sale results from a wiling buyer and a willing seller agreeing on price etc.

A cheap shot by someone obviously ill informed !

In the UK 1 - 1.5% is the norm or at least was the norm when I left a few years ago.

It's time there's a regulatory cap on agents fees, up to, say, as in the UK, no more than 1.5% of the price paid for the property being transacted or up to 2% as someone mentions, is the case in Australia

In the UK it is now 1% which includes brochures etc

In the UK you do not have to pay extra for a valuation, they are able to give a valuation as part of the service. I will concede however that valuations in UK will be easier due to more standard built houses for example on large housing estates where there may only be 3-4 variation on the build, they then only have to factor in improvements.

It includes everything including valuation, floor plans etc. Actually many houses are very old and unique in the UK so quite difficult to price. The service is not quite as slick as in NZ though. You don't tend to dress the house or have open homes and auctions are almost unheard of. I have looked round houses where the washing up is piled up in the sink, dogs running around etc!

This is true - you never see Phil and Kirsty recommend an auction or arrange an open home - that's because they don't do that in the UK. I am interested to know why UK Real Estate Agents don't do them...

I wish they had the same system in England as they do here. Scotland is more similar to here. You are not legally committed until you have exchanged contracts so in a boom market there is a lot of gazumping going on which is a nightmare for buyers.

In the UK it is now 1% which includes brochures etc

Gloom, in Australia most agencies are charging between 3-4%. You might get the odd 2%, the likes of Gecko, Buy My Place etc..

If they have such cosy communication and have been caught out on such a blatant move, what else are they up to behind the scenes that is less obvious?

Lots

Evidence?

It would be great to get rid of the current style of real estate agents altogether - playing people off one another, dishonest practices, constantly driving prices beyond what the real economy can afford.
Why can't the system have housing that can be brought of the shelf at a fixed known price, like any other product we purchase - open and transparent. The property market world would function better, supplying people who need affordable housing. Rather than favoring speculators owning numerous properties.

13
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A seller of a second hand pair of trousers on trade me is more accountable for how the item is described than any real estate agent who can happily advertise property with known obvious flaws without mentioning it in ads.. the number of times ive driven out to a place, wasted half a day, just to find out something that should have been disclosed up front

Ah!! The wonder of the disclaimer clauses.

How would that price be set ?

Behind closed doors, "Working Party", probably National, maybe added to TPP for a quick cheque.

1.Unprofestional
2.Unethical
3.Lazey
Here is the proof.
This is just he start of the clean up

Well, ComCom has, after years of sitting on them and wondering where they were, finally discovered its cojones.

So why not get started on the building materials duopoly?

Right after the supermarket chains hopefully.

The sooner trade me start live auction of house online the better.
Most people I know don,t want to deal with realestate industry.

Automating the real estate industry out of existence would be beautiful.

The sooner trade me start live auction of house online the better.
Most people I know don,t want to deal with realestate industry.

Black and White, How many people do you know? Most people I know think agents do a great job, .The prove is the number of private sales compared to agent listings..

Zak
So you are happy to pay agents $800 per hour for a very average job.
They are the most over payed people in the country and the most unprofessional.

Isn't Key and the minions about to push thru pro-cartel policy which will make these bottom feeders actions perfectly legal?

You know when banks keep (say) credit card lending % rates at the same rate even though the OCR goes down...isn't that the same kind of thing?