New Victorian laws will obligate buyers and sellers to publicly disclose what they spend on offloading or acquiring a home.
The real estate industry is sounding the alarm on a new Victorian government law that will force homeowners to reveal their home’s sold price from October 1.
The legislation’s only exceptions will apply to buyers and sellers whose circumstances are affected by personal or family violence.
Industry figures have expressed caution about a lack of a public awareness regarding the new regulations, plus the impact on individuals’ privacy and how the state’s already flagging auction market will fare under the controversial changes.
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There’s even speculation the law, combined with recent alterations to auction reserve price disclosure rules, could cost Ben Carroll’s government at the polling booth when the state election is held in November.
Under the legislation, it will be compulsory for agents to update an online Property Price Statement (PPS) with a sold sum within seven days of a home’s sale.
The PPS must be made publicly available for at least 18 months, unless the Consumer Affairs Victoria director grants an exemption for family or personal violence reasons.
The law will apply to home sales which become unconditional on or after October 1, even if the contract was signed before then.
Owners or buyers who make the application for an exemption will be able to choose whatever information they include to support their request, although CAV’s director will be able to request further details if necessary.
The CAV online form gives applicants up to 5000 words to explain their circumstances and an option to include any supporting documents.
Otherwise, the law will apply to residential sales which become unconditional on or after October 1, even if the contract was signed before then.
However, if the agent’s written engagement or appointment to sell a property was entered into before 1 October, and included a term which required the sale price to not be disclosed, the figure does not have to be made public.
Real Estate Institute of Victoria chief executive Toby Balazs says homeowners could take their frustration and anger out on agents, if they don’t want their home’s price divulged.
Real Estate Institute of Victoria chief executive Toby Balazs said even if a buyer or seller was adamant they did not want a price published, an agent would have no choice but to do so.
Mr Balazs said although those in the property industry were aware of the changes, there hadn’t been a consumer awareness campaign to educate the public about them.
He noted the REIV supported sold figures being disclosed to improve transparency for buyers but that he was concerned about the legislation itself putting agents in potentially volatile situations when clients became upset about their prices being published.
The only exception to the laws will be people who gain permission from Consumer Affairs Victoria’s director due keep a price under wraps, due to personal or family violence.
“Unfortunately, the way the legislation is drafted, it puts the agent in the middle of any dispute or frustration from buyer or seller about having it published,” he said.
“I think early on, until it becomes embedded and people understand that this is the new norm, there’s likely to be some frustration or anger potentially directed towards agents.”
Mr Balazs said this would occur when homeowners mistakenly believed agents had chosen to release their sensitive personal information, whereas in reality an agent who did not publish a sold price would face an almost $49,000 fine.
Agents are concerned that there hasn’t been enough public education on the new real estate rules.
The Victorian Opposition’s Consumer Affairs spokesperson, Jade Benham, said she believed the entire housing and real estate sector would require a review if Labor and the Nationals won the upcoming election.
Ms Benham described the Labor government’s auction law changes as “the final nail in the coffin” for the state’s property market, with NSW looking set to steal Victoria’s crown as Australia’s auction capital.
She added that the new laws would likely lead to less auctions, which would in turn reduce transparency for buyers.
The Opposition’s Consumer Affairs spokesman, Jade Benham, says Victoria’s new real estate laws will result in less transparency for buyers. Picture: David Geraghty
According to realestate.com.au, Victoria is slated for 707 auctions in the week from Monday, October 5, to Sunday, October 11, – compared to NSW’s 841 auction tally for the week.
“The government seems to think that, particularly with the advanced reserve price publishing, that’s going to combat under quoting – which is completely misled,” Ms Benham said.
“If they want to target the bad actors in the real estate industry, the last thing you would do is put them behind closed doors and take sales of properties off market where we are seeing more properties bought and sold now than we ever have.”
Abercrombys’ Jock Langley says that a lot of people would feel uncomfortable revealing what they have spent on what is likely their biggest asset, their home.
Abercrombys’ director Jock Langley it was likely that a lot of people would feel “very uncomfortable” about their home’s sold figure, or just how much they had spent on a property, being made public.
“I think all it’s doing, it’s creating more outrage, more debate, and probably more frustration,” he said.
Mr Langley said it was impossible to predict how Victorians would react to the changes but
“people will either get used to it or they’ll vote”.
“They’ll fight with their feet when they get the chance on the 28th of November,” he said.
Marshall White’s John Bongiorno says he’d like to see more transparency from the Victorian government itself.
Marshall White’s John Bongiorno said the new laws had not been widely or properly promoted by the government.
Mr Bongiorno added that a lot of people “don’t like to run around, telling others what their bank balances are” – and that was essentially what the legislation came down to.
The agency’s group sales director said when it came to financial transparency, he would like to see the current government more open about their own dealings “especially when it comes to wasting Victorian taxpayers’ money”.
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