Australian housing sector has strong consumer protection mechanisms that the Canadian system can adopt, according to market observers
When it comes to ensuring the existence of a real estate marketplace that does not lead to the proliferation of unscrupulous practices, Canada can emulate much of Australia’s current system, according to a duo of industry observers.
In their piece for CBC News, analysts Saman Malik and Tiffany Foxcroft said that while the Australian housing sector is also seeing heightened activity similar to Canada’s, one drastic difference is the presence of robust consumer protection measures.
“Agents are forbidden from double-ending deals, meaning they are not allowed to represent both the buyer and seller in any one transaction,” according to the analysts.
“Such deals are legal in most of Canada and result in a lucrative double commission for agents. But they can also be a conflict of interest,” they added. “[Just] this past year, Australia introduced reforms to prevent sellers from ‘price-baiting,’ where properties are listed for well below market value in order to drive up interest.”
Australian consumers also have access to a greater amount of real estate data, the duo stated.
“Buyers can obtain home inspection results, sale-price histories and information on recent sales of comparable and neighbouring homes — without going to an agent to get the information.”
Said data is available via housing information Realestate.com.au, which boasts of nearly 6 million inquiries from Australians monthly.
Most importantly, the Australian real estate market has long adhered to the mechanism of the open auction, which guarantees a level of transparency that is simply not obtainable in the Canadian system in its current form.
“Bids are kept secret in Canada and no would-be buyer knows what the others have offered. In Australia, the process is transparent,” Malik and Foxcroft explained. “Over about a four-week period leading up to the auction, interested house-hunters can schedule visits and inspections on the home in order to prepare their bids.”
“Then on bidding day, typically a Saturday, interested buyers gather on the sidewalk outside the home and place their bids out in the open, in an auction led by the seller's agent,” the duo wrote. “The process usually lasts about 10 to 15 minutes and the spectacle often attracts an audience who just come by to watch. It's not uncommon for house-hunters to attend multiple auctions in one day, quickly moving onto the next property on their list if they fail to win a home.”
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In their piece for CBC News, analysts Saman Malik and Tiffany Foxcroft said that while the Australian housing sector is also seeing heightened activity similar to Canada’s, one drastic difference is the presence of robust consumer protection measures.
“Agents are forbidden from double-ending deals, meaning they are not allowed to represent both the buyer and seller in any one transaction,” according to the analysts.
“Such deals are legal in most of Canada and result in a lucrative double commission for agents. But they can also be a conflict of interest,” they added. “[Just] this past year, Australia introduced reforms to prevent sellers from ‘price-baiting,’ where properties are listed for well below market value in order to drive up interest.”
Australian consumers also have access to a greater amount of real estate data, the duo stated.
“Buyers can obtain home inspection results, sale-price histories and information on recent sales of comparable and neighbouring homes — without going to an agent to get the information.”
Said data is available via housing information Realestate.com.au, which boasts of nearly 6 million inquiries from Australians monthly.
Most importantly, the Australian real estate market has long adhered to the mechanism of the open auction, which guarantees a level of transparency that is simply not obtainable in the Canadian system in its current form.
“Bids are kept secret in Canada and no would-be buyer knows what the others have offered. In Australia, the process is transparent,” Malik and Foxcroft explained. “Over about a four-week period leading up to the auction, interested house-hunters can schedule visits and inspections on the home in order to prepare their bids.”
“Then on bidding day, typically a Saturday, interested buyers gather on the sidewalk outside the home and place their bids out in the open, in an auction led by the seller's agent,” the duo wrote. “The process usually lasts about 10 to 15 minutes and the spectacle often attracts an audience who just come by to watch. It's not uncommon for house-hunters to attend multiple auctions in one day, quickly moving onto the next property on their list if they fail to win a home.”
Related Stories:
Hidden cameras reveal Toronto agents peddling insider information
OREA head calls for reforms in REBBA after exposé
