KEY POINTS:
The real estate industry needs to encourage diversity to provide real choice for the public, says a property studies academic and former real estate agent.
Massey University College of Business senior lecturer Susan Flint-Hartle said many people were dissatisfied with the way things were in the real estate industry.
"The industry attracts public attack and is very defensive in the face of public query of its methods."
Massey News said Dr Flint-Hartle had just finished a doctoral thesis on real estate franchises.
She said the industry could not afford to dismiss innovation in the way property was sold, regardless of the reasons for the recent collapse of real estate company The Joneses.
The cost of selling real estate by the prevailing commission-based method may be one of the least understood and least acknowledged influences on housing affordability, Dr Flint-Hartle said.
"Vendors expect to get high prices because they factor in marketing costs and high commissions."
The commission rates were among the highest around, on top of which vendors were forced to pay massive marketing fees - say $5000 for the anticipated sale of a $700,000 property.
But while the current model of selling real estate placed increasing financial burden on vendors, most still did not want to step outside the system endorsed by the Real Estate Institute, she said.
Despite that, support for new real estate agencies such as Go Gecko and Green Door, which offered different selling methods, indicated demand for price-driven alternatives.
- NZPA
