The assistant competition minister, Andrew Leigh, says he is “concerned” Australians are paying the highest costs in the world to advertise their homes for sale online.
After a Guardian Australia investigation into the market power of the Murdoch-controlled REA Group, which owns realestate.com.au, Leigh said he wanted to see costs in the property market come down.
“I’m concerned every time I see Australians paying a lot. We’ve got cost-of-living pressures right across the board. I’m certainly concerned right across the house buying cycle,” Leigh, the assistant minister for competition, charities and treasury, said.
“House buyers are feeling the pressure of rising prices, particularly if you’re going into the market for the first time, you’re really stretching for every last dollar, so anything we can do to keep the total bill as low as possible is good.”
Australian house sellers face the highest costs in the world to sell their properties online, paying up to $4,000 for a single advertisement in inner-city areas. This is a 50-fold price hike in the past 15 years.
The Greens have said the situation underscores the need for new price-gouging laws, while Rod Sims, the former chair of the consumer watchdog, has called for the regulator to consider whether REA Group’s practices are anti-competitive.
Leigh would not be drawn on whether the price hikes constituted price gouging, saying the concept was “hugely contested” overseas, but conceded the 5,000% price increase “certainly seems a lot”.
“Getting a good deal for consumers has always been our focus, [and] firms charging better prices is always a good thing,” Leigh said.
REA Group, and to a lesser extent Domain, have come under fire from real estate agents and industry disruptors who say the pricing structures and practices of the companies is stifling competition.
REA has defended its cost increases, saying they “reflect the additional value delivered to vendors and agents in digital prime experiences” as its audience has grown.
Leigh said he could not comment on the specific practices of the companies, and maintained it was up to the regulator to consider whether there was any evidence of anti-competitive behaviour.
“The ACCC [Australian Competition and Consumer Commission] has the tools and resources it needs on this one. I don’t know enough about the specifics of what’s being alleged, but I do know that the Australian economy needs more dynamism, needs more competition and has monopolies everywhere you look,” he said.
“I think there is rarely an industry where the ACCC looks into it and doesn’t manage to produce useful insights, but of course they can’t look at all industries all the time.
“It’s certainly open to the ACCC to look into it and, if it sees something that is to the detriment of consumers, to act.”
He said the regulator’s action against Coles and Woolworths for alleged “illusory” discounts this week demonstrated that it was “not shy [about] taking action against big players.”
Leigh said the government did not have a position on whether private individuals should be allowed to sell their homes directly online, but said his general disposition was “in favour of competition and new market models”.
“More competition is always healthy and if that involves different ways of doing things then that’s normally a good thing for consumers.”
