Online site gouging home sellers
Nassim Khadem: It now costs more to advertise a home for sale in Australia than almost anywhere else in the world. Consumer Pam Tindill sold her home in May. She discovered one major player, 32 billion dollar publicly listed REA Group, reaps most of the online advertising fees.
Pam Tindill: We were quite surprised on how it was. We had no choice really to pay the price, no negotiating. And it's all dominated by one company.
Nassim Khadem: According to REA Group's own figures, the realestate.com.au site attracts more than 133 million average visits each month, almost four times more than rival domain. Tim McKibbin is the CEO of the Real Estate Institute of New South Wales. He says REA Group are very close to having a monopoly.
Tim McKibbin: As REA became more and more dominant in the market, they've been able to ratchet their fees up. So in some cases you can be paying three or four thousand dollars or more for your classified ad.
Nassim Khadem: Aaron Scott runs Bright Agent, an online portal that connects buyers with agents. He says REA's listing fees go up every year and are based on the suburb a property is sold in.
Aaron Scott: Well essentially what you're seeing is a postcode tax. So realestate.com.au are effectively saying if you're from a more affluent area, you have to pay more to list your property on their portal to get the right amount of visibility.
Nassim Khadem: On top of the cost to list on the portal, REA Group charges real estate agents subscription fees that are also often passed on to the consumer. Agents like Jo Mooney, who sells homes in Melbourne's North East, doesn't feel agents and consumers are getting a fair go. Her subscription fee, which allows her to place a certain number of properties on the portal each month, is rising by 34% on July 1.
Jo Mooney: It doesn't cost any more money for them to host the ad. It's cyberspace. It's a cloud.
Nassim Khadem: An REA spokesman told ABC News listing a property online is not free. He said the company's pricing reflects a small percentage of the property sale and the average increase for listings this year is 7%. On subscription fees charged to agents, he said this is the first time they've changed in over a decade because of big investments to enhance the service. Tim McKibben says agents worry REA could use the wealth of data gathered about consumer habits to start charging them for leads. His fear is that agents could be wiped out altogether, although REA says that's not their strategy.
Tim McKibbin: The industry remains concerned that that is their logical trajectory. And we do know that's possible because in the United States, there is one of the portals over there has done just that.
Nassim Khadem: It could take up to a year before the ACCC hands down its findings.
Isabella Higgins: Nassim Khadem reporting.
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