The Minns Labor Government is set to overhaul the state's underquoting laws, with consultation beginning on proposed reforms to lift professional standards across the real estate sector, improve transparency in property listings and boost buyer confidence.
The proposed changes aim to crack down on misleading price estimates in property listings, a practice known as underquoting, which leads to buyers wasting time and money pursuing homes that are well out of reach.
The proposed reforms, subject to consultation, include:
- Significantly increased penalties for underquoting from the current $22,000 to $110,000 or three times the agent's commission, whichever is greater.
- Mandating a price or price guide on all advertising so prospective buyers don't waste their time on properties outside of their budget.
- Requiring agents to publish a Statement of Information (SOI) to help prospective buyers understand how the selling price was calculated, including comparable sales and suburb median prices.
- Requiring real estate agents to calculate and revise the estimated selling price of a property in accordance with new, clearer guidelines to be issued by the NSW Fair Trading Commissioner.
- Tightening advertising rules to ensure price guides are published, accurate and updated promptly, including preventing representations of a selling price that is less than a rejected offer or bid on a property.
- Strengthening record-keeping obligations, including requiring evidence to be kept around market feedback, offers made and refused, and consideration of changed market conditions, to help Fair Trading enforce the new laws.
- Boosting disciplinary action against agents by NSW Fair Trading, such as publicising any underquoting breaches, requiring independent valuers to certify the estimated selling price (at no cost to the vendor) or suspension of property sales activities under a licence.
- Create a standalone offence for failing to meet continuing professional development requirements for agents.
In 2024 NSW Fair Trading issued more than 100 penalty notices for underquoting offences, forming a crucial part of the Strata and Property Services Taskforce's work to strengthen compliance and enforcement in the rental market.
The proposed changes have been modelled on Victorian laws introduced in 2016 which have led to millions in fines and are now widely accepted by industry.
Legislation implementing the changes is expected to be introduced to Parliament next year.
For more information on underquoting laws visit Price estimation and underquoting when selling a property.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
"There is broad recognition not only from buyers, but across the property industry, that stronger underquoting laws are needed to restore trust and improve transparency in property sales.
"Our message is that we hear you - we've developed a package of reforms and are now consulting with the sector to ensure we get the balance right between consumer protection and practical implementation for industry.
"The proposed laws will ensure NSW Fair Trading's Strata and Property Taskforce can take meaningful action against misleading conduct in property advertising and transaction and clean up the NSW market."
NSW Strata and Property Services Commissioner Angus Abadee said:
"These proposed reforms are designed to bring greater transparency to property sales and ensure buyers are not misled by inaccurate price guides."
"By outlining our vision for clearer documentation and stronger penalties, we're making it easier to hold agents accountable for underquoting.
"The proposed Statement of Information and advertising rules will help buyers make informed decisions and reduce wasted time and money - a win for consumers already struggling with cost of living pressures."
