Australian Home Sellers Face World’s Highest Online Advertising Costs, Sparks Government Concern
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In a recent expose by The Guardian Australia, the issue of Australians facing the highest costs in the world to advertise their homes for sale online has been brought to light, raising concerns at the government level. The investigation focuses on the dominant market position of the Murdoch-controlled REA Group, the entity behind realestate.com.au, and its impact on advertising prices.
Assistant Competition Minister Andrew Leigh expressed his concerns about the burdensome costs imposed on Australian house sellers, who are reportedly paying up to $4,000 for a single advertisement in inner-city areas. This represents a staggering 5000% increase over the past 15 years. “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 commented.
The situation has sparked calls for new price-gouging laws from political groups like the Greens and demands for regulatory scrutiny by figures such as Rod Sims, the former chair of the consumer watchdog. Sims has suggested that the regulator should assess whether REA Group’s practices are anti-competitive.
REA Group defends its pricing, arguing that the fees “reflect the additional value delivered to vendors and agents in digital prime experiences” due to its growing audience. However, the assistant minister refrained from labeling the situation as price gouging, acknowledging that the concept is “hugely contested” internationally.
Leigh’s reluctance to directly address the practices of REA Group and Domain, another major player in the online real estate market, underscores the complex nature of the issue. “The ACCC [Australian Competition and Consumer Commission] has the tools and resources it needs on this one. 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 stated.
The recent actions by the ACCC against major retailers like Coles and Woolworths for alleged “illusory” discounts demonstrate the regulator’s readiness to tackle significant market players, suggesting that the real estate advertising sector could be next in line for scrutiny.
Leigh also hinted at the potential benefits of more competitive and innovative market models, suggesting a personal disposition “in favour of competition and new market models.” He believes that “more competition is always healthy” and that exploring different ways of doing things is generally beneficial for consumers.
As this issue unfolds, it will be interesting to see whether regulatory interventions or market adjustments will emerge to alleviate the financial pressures on Australian home sellers, ensuring a fairer and more competitive marketplace.
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