13 real estate agencies accused of price-fixing

New Zealand's top consumer advocate says house buyers and sellers could have suffered from the alleged real estate agency price-fixing.

Suzanne Chetwin, Consumers Institute chief executive, expressed concern for parties involved in the massive house selling industry, with an annual $1.2 billion turnover.

Ms Chetwin was reacting to today's announcement that real estate agencies across the country are facing charges from the Commerce Commission of alleged price fixing and anti-competitive behaviour.

Agents allegedly agreed that vendors - not the agencies - would have to pay Trade Me listing fees which increased in early 2013.

"From a consumer perspective, the actions of the real estate agents meant properties for sale were not being viewed as widely as they should and vendors were being asked to pay to have properties listed on Trade Me," Ms Chetwin said.

"In that regard, real estate agents were not acting in the best interests of sellers or buyers, but trying to force Trade Me to give them a better offer for advertising," she said.

13 real estate agencies accused of price-fixing

The court proceedings relate to alleged conduct in 2013 and 2014 by the 13 national and regional real estate companies.

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 alleges that the real estate agencies breached the Commerce Act by agreeing a planned industry response to Trade Me's changed pricing model.

See the full release here.

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.

Bayleys has agreed a settlement in principle with the commission.

Bayleys has admitted its conduct breached the Commerce Act and has agreed to settlement terms. None of the other agencies have settled.

A spokesman for Bayleys said the matter is before the courts and the company is therefore unable to comment any further.

A spokeswoman for Barfoot & Thompson said there will be a press release sent out later today from the PPL Group.

"There won't be any other comments, as this matter is before the courts," she said.

Ray White NZ chief executive Carey Smith said Ray White has not agreed to any settlement.

"We will review our position as we gain further understanding as to the detail in proceedings that have now been filed," he said.

"Ray White has no further comment."

A spokeswoman for LJ Hooker said the company declined to comment as the matter is before the courts.

Property Page allegedly set up, implemented agreement

The Commission also claims Property Page (NZ) Limited aided and abetted the agencies in establishing and implementing the agreement. Property Page is an incorporated company owned by the major real estate agencies and owns 50 per cent of realestate.co.nz, the property listing site that competes with Trade Me.

In a separate case, the Commerce Commission has filed proceedings against real estate agencies and individuals in Hamilton and Manawatu, alleging the parties agreed to remove all listings from Trade Me's website and vendors would pay a listing fee.

The Hamilton real estate agencies involved are 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).

Two individuals are also involved in Hamilton.

A statement this afternoon from Monarch Real Estate Ltd said its directors were aware of the allegations by the Commerce Commission that they breached provisions of the Commerce Act in the real estate market.

"The allegations relate to efforts made in 2013 to resist a massive increase in Trade Me listing fees that would apply for home sellers," the statement said.

"On receiving advice of Trade Me's fee increases, the main focus of the actions taken was to serve the best interests of clients and consumers. Competitiveness was improved as a result, and costs avoided.

"As the legality of these actions is now subject to determination by the courts we will not be commenting any further."

Meanwhile, chief executive of Success Realty Ltd, Ross Stanway, referred any comment about the Commerce Commission to Bayleys. Success Realty trades under the Bayleys banner.

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, working for Property Brokers, 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.

Steve Allen, the principal officer at Manawatu 1994 Ltd - which trades under the LJ Hooker banner - said he could not comment as it was an ongoing investigation. "I've got really nothing further to comment."

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 issued a warning to a number of other Manawatu agencies are likely to have breached the Commerce Act.

Under the Commerce Act, price-fixing agreements between competitors are illegal. If the charges can be proven, the real estate agencies face penalties up to $10 million, three times the value of the commercial gain from the agreement, or 10 per cent of the turnover of the company.