NSW Government Introduces Strict New Laws to Combat Property Underquoting
The New South Wales government is set to introduce comprehensive new legislation this week that will fundamentally change how properties are advertised and sold across the state. These draft laws, which were initially proposed last year, represent a significant crackdown on the widespread practice of underquoting in the real estate sector.
Mandatory Price Guides and Increased Penalties
Under the new regulations, all property sellers will be legally required to publish a clear price guide on every advertisement. This measure aims to eliminate the misleading price estimates that have become commonplace in property listings, a tactic often employed by agents to artificially inflate buyer interest and create bidding wars.
The government has dramatically increased penalties for violations. Real estate agents caught underquoting will now face fines of $110,000 – representing a fivefold increase from previous penalties – or three times their commission, whichever amount proves greater. This substantial financial deterrent is designed to ensure that misconduct can no longer be dismissed as merely a cost of doing business.
Comprehensive Disclosure Requirements
Beyond mandatory price guides, the legislation will require agents to provide a detailed "statement of information" to prospective buyers. This document must explain precisely how the advertised price was calculated, including comprehensive data on comparable sales in the area and average property prices. Agents will also be prohibited from advertising properties at prices lower than those previously rejected by sellers, closing a common loophole in the current system.
The practice of "dummy bidding" – where agents or associates place fake bids to drive up auction prices – will also attract the same substantial $110,000 fine as underquoting offenses. These measures collectively aim to create what NSW Fair Trading Minister Anoulack Chanthivong describes as "a fair property market that works for everyone."
National Context and Government Rationale
This legislative push in New South Wales comes amid growing momentum across Australia for increased regulation of the real estate sector. Just last week, the Victorian government announced similar disclosure rules that would compel agents to publish sale prices. The Victorian Labor party has further pledged that, if re-elected, they would require vendors to pay for mandatory building and pest inspections.
Minister Chanthivong emphasized the protective nature of these reforms, stating: "These reforms are a significant step forward in protecting homebuyers from unscrupulous real estate agents taking advantage of a tight housing market." He added that the changes would empower NSW Fair Trading with stronger disciplinary capabilities, enhanced enforcement tools, and improvements to mandatory education and professional standards for real estate professionals.
The comprehensive approach addresses what has become a systemic issue in property markets, particularly during periods of high demand and limited supply. By increasing transparency and accountability, the government hopes to prevent potential buyers from wasting time and resources on properties that are deliberately advertised below their realistic market value.
