The Queensland government has ruled out making property prices more transparent for buyers, leaving real estate listings shrouded in secrecy and consumers in the dark.
Under new laws introduced in Victoria on October 1, a seller’s reserve must be revealed and publicly advertised at least seven days before the auction is scheduled, or expression of interest campaign closes.
In NSW, listings will be required to advertise a price or price guide from November 17.
But such reforms appear off the table in Queensland for the time being, even as some industry leaders push for greater price transparency.
Property listings that simply say “For sale”, “Contact agent” or “By negotiation” are commonplace in Queensland and not illegal.
A spokesperson for the Attorney-General, Minister for Justice and Minister for Integrity Deb Frecklington tells Domain that Queensland’s auction framework already includes “strong consumer protections and safeguards around the conduct of auctions”.
The spokesperson says the government will “continue to monitor developments in other jurisdictions to ensure Queenslanders can participate in the property market with confidence”.
REIQ chief executive Antonia Mercorella has backed the current regime in Queensland, saying the new Victorian reforms had been introduced to tackle underquoting , which did not appear to be a big problem in Queensland.
“Underquoting is an inappropriate and unlawful practice that wastes time and money and understandably frustrates prospective buyers,” Mercorella says.
“However, we have seen in other jurisdictions that mandating price guides does not safeguard against underquoting or result in a guaranteed sale price outcome.
She says prospective buyers in Queensland can be provided with a comparative market analysis (CMA) with the seller’s consent.
A CMA is a document that lists comparable properties that have recently sold within the suburb or surrounding areas, enabling the potential value of the subject property to be determined.
“With this long-standing approach, there is no evidence that Queensland has material underquoting issues,” she says.
The REIQ also rejected the need for NSW-style mandatory price guides in Queensland, saying existing laws already protect buyers and that sellers should retain flexibility in how they price properties.
This could include options such as a fixed price, price range, “Offers over”, or no price, such as “Expressions of interest”, “By negotiation” and “Best offers by”.
“We understand that buyers want price certainty and prefer transparent pricing, but the unique nature of property sales means that it is not like buying an everyday item,” Mercorella says.
“The ultimate sale price is impacted by various factors and market conditions which may not always be foreseeable.”
McGrath Paddington’s Alex Jordan is one high-profile Queensland agent backing mandatory price guides, saying a lack of transparency has been consumers’ biggest complaint about real estate.
Jordan says such guides are necessary to get the best deal for both the vendor and buyer. He says about 90 per cent of his listings include a price guide, and it works well for both parties.
“If there is no price, what usually happens is that the buyer will get frustrated, and because they don’t want to overpay, they will put in a lowball offer,” Jordan says.
He says this creates an inaccurate market price, and in the long term, the vendor suffers as well as the buyer.
“There is no other asset where there is not at least some guide on price,” he says. “You don’t walk into a car yard, for example, and instead of a price sticker you get asked by the salesman what your budget is.”
Jordan also blames a lack of price transparency for Queensland’s historically low auction clearance rate.
David Holmes, of Holmes & Co Auctions, agrees there needs to be greater price transparency in Queensland for auctions, but says the Victorian model will not work. Instead, a price guide system might be a viable alternative.
Holmes says the current law in Queensland means people can turn up to an auction with very little understanding of what the property might sell for.
“I’ve worked across several states, and in NSW, for example, properties have price guides,” Holmes says.
“If the guide is $800,000 to $900,000, bidding might begin at $750,000, so at least buyers have some frame of reference. People need a level of transparency.”
However, he says the Victorian approach that mandates the publication of reserves is short-sighted.
“If you want to have a price guide, that’s one thing, but why make them print the reserve?” he says. “Publishing the reserve price adds nothing to it whatsoever. In fact, it actually takes away from an auction.
“Auctions have been used for decades by banks, governments and courts because they provide transparency and clarity.”
Zoran Solano, of Brisbane-based Hot Property Buyers Agency, agrees there needs to be more price transparency but does not back the Victorian laws mandating the advertising of reserve prices. However, price guidance for private treaty sales would be a good idea, he thinks.
“I actually like that there’s no price guidance [at auctions[ because it doesn’t influence the market,” Solano says. “In my opinion, you should either have a price [in a private treaty sale] or go to auction.
“The grey area is when you have ‘for sale’ with no price. It should be one or the other. But that’s really divided among real estate agents and people in the market.”
Ray White Annerley sales executive Bevin Powell does not support adopting Victoria’s new auction price-guide requirements in Queensland, arguing that if a price is advertised there is little point holding an auction.
He says the change would add to increasing industry regulation and describes it as potential “overkill”.
Glen Norris is an experienced journalist and editor with a career spanning four decades across Asia, Australia and Europe. His roles have included stints at Bloomberg News and Asian Wall Street Journal.
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