NSW moves to crack down on property underquoting
The New South Wales government is introducing new laws aimed at stopping misleading price estimates in the property market.
Under the proposed reforms, all property listings will be required to include a price guide, and real estate agents who underquote could face fines of up to $110,000.
The legislation is expected to be introduced to parliament this week.
What underquoting means
Underquoting occurs when a property is advertised at a price significantly below what the seller actually expects.
The practice can attract large numbers of potential buyers, creating competition that drives the final sale price higher.
Consumer groups have long criticised the tactic for wasting buyers’ time and distorting the market.
Tougher penalties for agents
Under the new laws, the maximum penalty for underquoting will increase fivefold.
Agents found guilty could face:
• Fines of $110,000
• Or three times their commission, whichever is higher
The government says the change is designed to ensure misconduct cannot simply be treated as a cost of doing business.
Ban on dummy bidding
The reforms will also target “dummy bidding”, where fake bids are used during property auctions to push prices higher.
Agents involved in dummy bidding could also face fines of $110,000.
Mandatory price transparency
Another key change is the requirement for agents to publish a “statement of information” explaining how a price guide was determined.
This statement must include:
• Comparable recent sales
• Average prices in the area
• Data used to estimate the price
Agents will also be prohibited from advertising a property at a price lower than an offer that has already been rejected.
Government says reforms will protect buyers
NSW Fair Trading Minister Anoulack Chanthivong said the changes are designed to make the property market fairer.
“These reforms are a significant step forward in protecting homebuyers from unscrupulous real estate agents taking advantage of a tight housing market,” he said.
The government says stronger enforcement powers will also allow regulators to take disciplinary action more easily.
A wider push for housing transparency
The move comes as other states consider similar reforms.
The Victorian government recently announced plans to introduce new disclosure rules for real estate transactions.
Housing affordability and transparency have become major political issues as property prices remain high across Australia.
