Victoria’s Premier has gone public in her fight with the real estate industry, blasting an open letter addressed to Real Estate Institute of Victoria (REIV) Chief Executive Toby Balazs across her social media channels on Friday.
The letter, published on official Premier’s letterhead, was Ms Allan’s response to correspondence from Mr Balazs opposing the government’s incoming reserve price disclosure laws, which take effect on 1 October.
“I received your letter opposing my plan to require agents to publish a reserve price,” Ms Allan wrote.
“Victorians are sick of wasting their weekends chasing homes they were never going to get, because the reserve was well above the price range all along. My plan does something about it.”
Ms Allan posted the letter with the caption: “Buying a home is hard enough. And keeping reserve prices secret only makes it harder. Here’s my response to those fighting to keep it that way.”
Notably, the letter was not issued through the Premier’s media centre as a formal media release, instead appearing only on her personal social media channels – a direct-to-voters approach that bypassed the press gallery and the industry entirely.
Under the new laws, agents must publish a property’s reserve price at least seven days before an auction or fixed-date sale, and auctions cannot proceed if the reserve has not been disclosed.
Sold prices must also be made public once a property transacts.
“Now they’ll have to publish a reserve price at least seven days before auction, or the auction can’t proceed – and once a home sells, its sold price must be published, too,” the Premier wrote.
“A home is the biggest purchase a young person will ever make. Let’s not stuff around with it – just be upfront about the price the owners will consider letting it go for. It’s all they’re asking.”
A two-day offensive
The letter was the first move in what appears to be a coordinated government push against the industry.
On Saturday morning, Consumer Affairs Victoria announced Federal Court action against the agency formerly known as Harcourts Judd White – now trading as Ray White Judd White Group – and three agents, Andrew Dimashki, Anna Du and Julie Wells, over alleged underquoting on 11 properties in Glen Waverley and Wheelers Hill.
CAV Executive Director Nicole Rich alleged discrepancies of several hundred thousand dollars in some cases, and said vendors had been signed up to contracts with “kicker” commissions of up to five times the base rate when properties sold above an agreed price.
The regulator has described it as one of the most serious cases since its underquoting taskforce was established. Corporations face maximum penalties of $100 million under Australian Consumer Law, with individuals facing up to $2.5 million. The matter is listed for the Federal Court on 4 September. The allegations have not been tested in court.
Consumer Affairs Minister Paul Edbrooke said 30 inspectors would be attending auctions across Melbourne’s inner north over the weekend.
Industry pushback
The Premier’s letter did not address the REIV’s alternative proposal, developed by its Strategic Working Group, which would require vendors to confirm their reserve sits within a 10 per cent advertised price range three business days before auction.
Nor did it engage with REIV-commissioned research finding 94 per cent of surveyed Victorians would rethink auction as a sale method under the seven-day rule, or the state’s clearance rates, which have hovered between 40 and 55 per cent for the past two months.
Mr Balazs used those figures earlier this month to call on the government to reconsider the reforms, saying the market was suffering from “an issue of confidence” and imploring the government “to rethink what they’re doing” ahead of the October deadline.
The weekend’s auction results underline the fragile backdrop to the fight. Cotality’s weekend market summary showed Melbourne hosted 599 auctions – the most of any capital – and was up 4 per cent on the week, with a preliminary clearance rate of 56.5 per cent – the city’s highest early result in five weeks.
But volumes were still 10.7 per cent below the same time last year, the previous week’s preliminary figure was revised down to just 50.3 per cent on final numbers, and nationally it was the ninth consecutive week auction volumes have tracked below last year’s levels.
The Premier’s letter also landed just days after Mr Balazs made a detailed case against the government’s broader Consumer Legislation Amendment Bill in an opinion piece published by Elite Agent, warning that “reform without reality threatens poorer property outcomes” and arguing the Bill’s proposed changes to the Sale of Land Act – including a mandatory 14-day Section 32 availability period and the repeal of Section 27 deposit release provisions – would stall genuine offers, delay settlements and increase litigation risk for all parties.
Far from opposing transparency, Mr Balazs wrote in that piece that the REIV supports disclosure of sale prices once contracts go unconditional – the very measure the government has since claimed as its own.
The decision to name Mr Balazs personally has raised eyebrows across the industry, not least because the REIV convened the Strategic Working Group that the government itself sat on and authored an eight-point transparency blueprint that included compulsory disclosure of sale prices – a recommendation the government adopted in its own legislation.
The Institute has consistently said the dispute is not about transparency itself, but how the government has chosen to implement it.
The stoush comes with Victorians heading to the polls in November, and with housing shaping as a central battleground. Ms Allan has previously said she wants to be “the premier who got millennials into homes”.
The reserve price disclosure laws are scheduled to take effect on 1 October.
More to come.