Home sellers in NSW will soon have to share a price or price guide when advertising their home for sale, creating greater price transparency for buyers in more than half of the country.
The NSW state government will introduce new laws this week to crack down on underquoting, including rules that force vendors to publish a price or price guide on homes for sale.
NSW joins Victoria in mandating home sellers to publish a price guide in advertising, together representing about 56% of Australia's population, according to the latest figures from the Australian Bureau of Statistics.
The new laws will also see underquoting fines increase from $22,000 to $110,000 or three times the agent’s commission - depending on whichever is greater - and will double penalties for dummy bidding at auctions from $55,000 to $110,000.
But the new rules have been criticised by the Real Estate Institute of NSW, with its chief executive Tim McKibbin urging the government to stop "denigrating" the industry and start working with it instead.
"The government does this all the time, and my advice to them would be to stop admiring the problem and start working with the industry," he said.
"The only people that they don't engage with, in any meaningful way, is the industry."
Property listings in NSW will soon be required to display a price or price guide.
NSW better regulation and fair trading minister Anoulack Chanthivong said the reforms were a significant step forward in protecting home buyers in a tight housing market.
“By significantly increasing penalties for underquoting, we are ensuring misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent,” Mr Chanthivong said.
“The changes will also empower NSW Fair Trading to tackle misrepresentations of property prices through stronger disciplinary action, better enforcement tools and improvements to mandatory education and professional standards.”
Under the new laws, real estate agents will be required to publish a statement of information (SOI) to help buyers understand how the selling price was calculated, including comparable sales and the suburb’s median sale price.
Agents will need to calculate and revise the estimated selling price of a property in line with new guidelines, and will be banned from advertising a sale price lower than a previously rejected written offer or the highest unsuccessful bid at an auction.
Fair Trading authorities will be given expanded powers to respond to serious breaches, including requiring agents to publicly disclose their misconduct or have their price estimates independently verified by a qualified valuer.
It comes as Sydney’s median house price rose 6.3% to $1.639 million during the year to February, while regional NSW saw the median house price jump by 8.8% to $829,000, according to the latest PropTrack Home Price Index.
It comes after the Victorian government promised to make vendors pay for building and pest inspections ahead of a home sale - if re-elected - last week.
In 2017, Victoria mandated vendors to publish a price or price guide in a mandatory statement of information when selling their home.
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