House sellers are being ripped off – and the ACCC is onto it

The Age

4 days ago

Real estate listings companies like the Murdoch-controlled property portal REA Group are making off like bandits with claims that advertising rates are rising by 10 per cent or more a year – an amount that house sellers ultimately bear.
In response, the Australian Competition and Consumer Commission has begun sniffing around, using its investigative powers to gather information.
Real estate agents and vendors ultimately pay for what has been described variously as profiteering, or price gouging. And it now appears they have become involved in a concerted effort to push back.
Using a digital property classified advertising business can now be so expensive that people selling their house have needed to find temporary finance to pay this cost, which they ultimately repay when the home is sold.
There are two large real estate advertising businesses in Australia – REA and Domain. The latter is 60 per cent owned by Nine Entertainment, which also owns this masthead, and is in the process of selling it to US digital real estate listings giant CoStar Group.
But there is a yawning gap between the dominant REA and the much smaller Domain – so much so that the property industry sees REA as a monopoly dressed up in duopoly clothing.
There is a yawning gap between the dominant REA and the much smaller Domain – so much so that the property industry sees REA as a monopoly dressed up in duopoly clothing.
Real estate agents admit that the advertising prices charged by both groups are roughly similar, but the brunt of the pricing anger is directed at REA as the market leader.
The two companies' respective market shares, levels of profitability and sharemarket values are poles apart. By way of illustration, REA – controlled by Rupert Murdoch's News Corp – boasts a market capitalisation of more than $32 billion, while Domain is valued at less than one-tenth of that.