Commerce Commission investigated Valocity over competition issues among valuers

Valocity offers different types of property valuations, including full ones which require a valuer to physically inspect a property. Photo / Michael Cunningham

Property data and digital services provider Valocity is changing its online property valuation ordering system after the Commerce Commission investigated concerns about it limiting competition among property valuers, which it said meant consumers were potentially paying more.

The commission was concerned that by setting the prices of full valuations and determining which valuers would perform those, Valocity was effectively removing the ability of valuers to compete for work, a statement today said.

Agreements that substantially lessen competition are illegal under the Commerce Act.

These agreements could be in the form of a written contract or an informal understanding, the commission said today.

Today, a statement from commission chairman John Small explained the background regarding concerns about Valocity, which provides data and digital services to the residential property sector, including major banks, property valuers and borrowers seeking mortgage finance from banks and other providers.

It offers different types of property valuations, including full ones which require a valuer to physically inspect a property.

Full valuations are arranged by the major banks or mortgage brokers and are usually required for higher-risk properties or borrowers.

Currently, a borrower can’t choose their own valuer and must pay the fee.

The commission said the fee for a full valuation and the allocation of a valuer to conduct that are determined by Valocity.

This could result in borrowers paying higher prices for full valuations, particularly given the fact banks typically don’t allow prospective borrowers to arrange a valuation directly with a valuer.

Valocity has agreed to address the commission’s concerns by making changes to its platform that give borrowers the ability to reject the fee set by Valocity and request quotes from valuers through the platform.

It is expected these changes will take effect from March and, subject to the commission being satisfied with the changes, will bring the investigation to a conclusion.

“This is an important market for tens of thousands of Kiwis each year, so we’re pleased that Valocity has agreed to make these changes to its online valuation ordering service,” Small said.

“We always encourage consumers to consider their options when deciding the best deal for them, and it is no different for full market valuations.”

Companies Office records show Valocity is majority-owned by Antony and Carmen Vicelich (60.99%). Members of the Huljich family also have substantial shareholdings in it.

Valocity founder and global chief executive Carmen Vicelich.

Valocity founder and global chief executive Carmen Vicelich said the business did not agree with how the commission interpreted competition.

“While we respectfully disagree with the commission’s interpretation of competition, we want to clarify that the selection of valuers is determined by the banks, not Valocity. Our technology simply facilitates the allocation of these bank-approved valuers to lenders on a fair, round-robin basis, without influencing selection or pricing decisions, automating what was a manual process to deliver a better more seamless process for all participants,” she said.

“That said, we’ve welcomed opportunities to enhance our service, introducing greater flexibility and choice for both consumers and lenders as part of our ongoing commitment to innovation and excellence.”

The business had worked with the commission throughout the investigation and supported efforts to promote fairness and transparency, she said.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.