The Real Estate Institute of NSW (REINSW) welcomes the Australian Competition and Consumer Commission’s (ACCC) investigation into REA Group.
Having heard the concerns of real estate agents, businesses and consumers, REINSW approached the ACCC approximately 18 months ago with evidence of the dramatically escalating fees being charged by REA.
According to REINSW CEO Tim McKibbin, based on direct feedback from agents, it is commonplace for REA to increase its fees well above the Consumer Price Index (CPI), significantly affecting consumers’ costs.
It therefore demands independent scrutiny, he said.
“Agents report annual REA price increases well above the CPI, often in the realm of 10%, and in many instances, even more. It needs to be called out,” Mr McKibbin said.
“One agent this week claimed the fees charged by REA, which are borne by his vendors, increased by 30% in a year. These escalating costs significantly increase the cost burden for consumers and are clearly unsustainable,” Mr McKibbin said.
“It is a clear case of the industry needing more competition. When one entity holds so much control over the property transaction, the lack of choice leaves consumers vulnerable and diminishes their power.
“Whilst the escalating costs charged by REA are obviously a concern, of greater concern is the response from the market. Because agents and vendors cannot afford or are unwilling to advertise across multiple platforms, consequently those platforms no longer enjoy the industry’s support, further eroding competition.
“Whether or not REA’s conduct amounts to an abuse of market control is for the ACCC to determine. There are clearly questions to be asked and answered.
“REINSW will continue to assist the ACCC in its investigation,” Mr McKibbin says.
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