underquoting laws

‘Blight on the industry’: Victorian property underquoting laws set for review

PHOTO: Auction bidders have been making complaints about underquoting CREDIT: STEPHEN MCKENZIE

The Victorian government will review laws on property underquoting and real estate agent conduct, after public complaints as housing prices soar.

Underquoting

Underquoting? Auction results soar above quoted price guides

The review will also cover off-the-plan sales, upfront costs for buyers, and whether real estate agents have the skills, education and expertise they need to maintain good industry practice.

It will focus on buyers and sellers receiving adequate service and a fair price, and ensuring expectations around property pricing are appropriately managed.

Underquoting reforms introduced in 2016 force all properties listed for sale to advertise a price guide and list recent comparable sales, and the government will look at whether these laws are adequate in a hot market.

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Melbourne’s median house price has jumped 35 per cent in less than three years, Domain figures show, despite six lockdowns.

Ultra-low interest rates enabled home buyers to borrow more money and bid higher at auctions, sending property prices soaring. In some cases, buyers paid as much as $1 million more than the sellers were asking.

Members of the public sent 383 complaints about potential underquoting to Consumer Affairs Victoria between February and April last year. Inspectors visited 29 agents’ offices in May and found 17 of those had flouted underquoting laws, issuing more than $300,000 in fines.

In a high-profile case, Melbourne real estate agency Kay & Burton was fined $9913 for underquoting an Armadale fixer-upper that sold for $5.8 million at auction in March, $1.4 million above the top of the asking price range. It was part of almost $30,000 in fines the company received for breaching real estate laws but the agency denied the claims and said it would fight the fines.

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