Commission files proceedings against real estate agencies

Media Release

Issued 17 December 2015
Release No. 73

Commission files court proceedings against real estate agencies

The Commerce Commission has filed proceedings in the Auckland High Court for alleged price fixing and anti-competitive behaviour by 13 national and regional real estate agencies, a company owned by a number of national real estate agencies, and 3 individuals. The Commission has also issued warnings to an additional eight agencies for their role in the conduct.

The proceedings relate to alleged conduct in 2013 and 2014 by the national head offices of five major real estate companies, and separately by agencies in Hamilton and Manawatu. The alleged conduct occurred in response to Trade Me’s change from a monthly subscription fee to a per-listing fee for properties advertised for sale on its website.

The Commission has agreed settlements in principle involving admissions and payment of a Court imposed penalty by two of the parties.

The Commission cannot comment further on these cases except as follows.

Proceedings concerning national real estate agencies
The Commission has filed proceedings against the head offices of Barfoot and Thompson Limited, Harcourts Group Limited, LJ Hooker New Zealand Limited, Ray White (Real Estate) Limited and Bayley Corporation Limited.

The proceedings allege that the defendants breached the Commerce Act by agreeing a planned industry response to Trade Me’s changed pricing model. The Commission alleges the parties agreed that vendors would have to pay the listing fee to have their property advertised on Trade Me, and that the agencies would not commit to any preferential or discounted listing fees with Trade Me.

The Commission also alleges Property Page (NZ) Limited aided and abetted the agencies in establishing and implementing the agreement. Property Page is an incorporated company owned by Harcourts, LJ Hooker, Ray White, Barfoot & Thompson and Bayleys, and owns 50% of property listing websiterealestate.co.nz, which is a competitor to Trade Me.

The Commission has agreed a settlement in principle with Bayley Corporation Limited to resolve the proceeding against it. The settlement involves Bayleys making admissions that its conduct breached the Act and paying a penalty to be imposed by the Court.

Settlements have not been agreed with any of the other defendants.

Separately, the Commission has filed proceedings against real estate agencies and individuals in Hamilton and Manawatu.

Proceedings concerning Hamilton real estate agencies

In Hamilton, the Commission alleges that Monarch Real Estate Limited (trading under the Harcourts banner), Lodge Real Estate (Hamilton) Limited, Lugton’s Limited, Online Realty Limited (trading under the Ray White banner), Success Realty Limited (trading under the Bayleys banner) and two individuals breached the Commerce Act by agreeing a planned regional response to Trade Me’s changed pricing model. The individuals work for Monarch and Lodge.

The Commission alleges that the parties agreed that:
• all listings would be removed from Trade Me’s website; and
• vendors would have to pay the listing fee to have their property advertised on Trade Me.
Proceedings concerning Manawatu real estate agencies
In Manawatu, the Commission has filed proceedings against Property Brokers Limited, Manawatu 1994 Limited (trading under the LJ Hooker banner), Unique Realty Limited and one individual, alleging that they breached the Commerce Act by agreeing with each other and other agencies in Manawatu a planned regional response to Trade Me’s changed pricing model. The individual works for Property Brokers.

The Commission alleges that the parties agreed that vendors would have to pay the listing fee to have their property advertised on Trade Me.

The Commission has agreed a settlement in principle with Unique Realty Limited to resolve the proceeding against it. The settlement involves Unique making admissions that its conduct breached the Act, and paying a penalty to be imposed by the court. Settlements have not been agreed with any of the other defendants.

The Commission also considers that a number of other Manawatu agencies are likely to have breached the Commerce Act. The Commission has therefore issued warnings to:
• Coast to Coast Limited (trading under the Bayleys banner)
• Alrose Limited (trading as RE/MAX Palmerston North)
• Rural and Lifestyle Sales.com Limited
• Real Estate House Manawatu Limited (trading under the Ray White banner)
• Harcourts Team Manawatu Realty Limited (trading under the Harcourts banner)
• Watson Real Estate Limited
• PGG Wrightson Real Estate Limited
• Monty’s Real Estate Limited

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