Is the Price Right? Queensland Passes Bill Banning Price Guides at Auctions

Thursday 8 May 2014 @ 11.36 a.m. | Trade & Commerce

Yesterday, the Parliament of Queensland passed the controversial Property Occupations Bill 2013.  The bill is one of four introduced to repeal and split the provisions of the current Property Agents and Motor Dealers Act 2000 (Qld) into four separate pieces of legislation.  However, the Bill has attracted heated public debate because of one particular new provision that explicitly bans real estate agents from providing price guides for properties sold at auction.

According to the Sydney Morning Herald, the Queensland government “believes underquoting is at epidemic levels in New South Wales and Victoria” and does “not want Queensland falling victim to the same problem.”

The controversial section

Section 214 of the original Bill provides:

214 Auctioneer not to disclose reserve or other price

(1) This section applies if residential property is to be, or may be, offered for sale by auction (offered property).

(2) The auctioneer must not disclose to a person other than a person acting for the seller in relation to the sale—

(a) the reserve price set for the offered property; or

(b) an amount the auctioneer considers is a price likely to result in a successful or acceptable bid for the offered property; or

(c) a price guide for the offered property.

Breaching this provision could see agents fined $60,000.

A number of amendments were agreed to before the Bill was passed in response to critiques of the original provision.  New sections have been added so that the auctioneer can disclose to people present at the auction that the reserve has been met, and so that people conducting web searches can search by price range.

Supporters

Queensland Attorney-General Jarrod Bleijie told the SMH:

“The issue of price baiting at auctions, which tricks buyers into thinking a home is within their price range, has become a big problem in other states and that’s what the legislation is designed to prevent… This is a win for everyone, but especially home buyers”.

Several industry bodies also support the legislation.  The Real Estate Institute of Queensland chief executive Anton Kardash said that it was not a new development and would have little impact:

“The new laws… essentially maintain the existing arrangements, while clearing up some of the uncertainty in the old legislation.”

RP Data national research director Tim Lawless told the Brisbane Times that the new laws would not affect the majority of property sales, as they only apply to auctions, which "tend to be used at the more expensive end of the Brisbane housing market".

Property analyst Michael Matusik told the Brisbane Times that the only opposition to the changes was from real estate agents complaining:

“[b]ecause auctions help them promote their business via vendor advertising and the crowd that assembles on the day of the auction”.

Opposition

While the Opposition did not oppose the bills, the leader of the Opposition, Annastacia Palaszczuk, said that she had serious concerns about the legislation, and that the bill would create a “significant problem for agents trying to market properties on behalf of clients”.

One of the most outspoken critics of the proposed legislation is McGrath Estate Agents chief executive John McGrath, who resigned from the Real Estate Institute of Queensland as a result of their support for the changes.  He told the SMH that:

“This in my eyes is a 50-year-step back into the Dark Ages when agents held all the power and all the information”.

He also said that the proposed bill would “be the only legislation in the world of its nature, which I think says something about the legislation”.

NSW Fair Trading and Consumer Affairs Victoria have also denied that underquoting exists as a widespread problem in those states, saying they had only received a small number of complaints in recent years.

The Bill is currently awaiting assent.

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