No winners in real estate price-fixing sentence - Property Institute
The head of the Property Institute says there are no winners and no lessons to be learned from Friday's massive fine imposed on some of the industry's biggest players.
Barfoot & Thompson, LJ Hooker, Ray White and Harcourts admitted price fixing in response to Trade Me's new payment model.
The companies breached the Commerce Act by making vendors pay a listing fee to have their property advertised on Trade Me. The Commerce Commission said by doing so, the companies eliminated competition in the market and exposed vendors to harm.
They were fined almost $10 million.
Ashley Church, Property Institute chief executive, says no party involved has come out well.
"Trade Me obviously suffered some pretty severe reputational damage from a significant part of their client base," he told Newshub.
"Nobody won. It's very difficult to draw an inference or a moral you can actually learn from."
Bayleys was also in the firing line, but came to an agreement with the Commerce Commission prior to Friday's sentencing.
Mr Church from says the case is a lot more complex than it appears on the surface.
"You look at the real estate firms - they took legal advice, they went through the process of checking what they were doing was legitimate, and all the way through that process they got the indication that it was. And yet, this was the outcome.
"I don't believe there's actually any villains in this."
He was surprised by the size of the fine.
"It would be difficult for even a large company not to feel some pain as the result of a fine of that size being levied."
The respective penalties handed down were:
- Barfoot and Thompson: $2,575,000
- Harcourts Group: $2,575,000
- LJ Hooker: $2,475,000
- Ray White: $2,200,000.
Each company reached separate agreements with the commission. Ray White faced a lower penalty because it did not enforce vendor funding.