Realestate.com.au removes restrictions in contracts with real estate agents after ACCC investigation

Real estate agencies and their clients should have more choice and flexibility in their listing options for the sale and rental of Australian properties after the ACCC accepted a court-enforceable undertaking from REA Group Ltd (ASX:REA). The undertaking commits REA to remove restrictive provisions from its contracts with real estate agencies.

The ACCC was concerned that REA’s contracts with real estate agencies contained anti-competitive restrictions, including clauses that required all properties to be listed on realestate.com.au, and that this limited the ability of REA’s rivals to compete.

“REA’s undertaking resolves this issue in a timely manner and addresses our concerns. We expect that ultimately the benefits will flow from the real estate agents to their clients, Australian property owners,” ACCC Chair Gina Cass-Gottlieb said.

This undertaking means that REA will not be able to require or incentivise real estate agencies to list all or most of its properties on REA’s realestate.com.au website.

“Because of the ACCC’s intervention, REA will give greater flexibility to agents in how their vendor and landlord clients list their properties for sale and rent,” Ms Cass-Gottlieb said.

Previously, under most of REA’s contracts, real estate agencies were locked into listing all their properties for sale or lease on realestate.com.au. In addition, REA’s contracts required or incentivised real estate agencies to list all or a portion of their properties with features that attracted higher fees.

“This is a win for competition in the real estate listing market and is expected to enable real estate agents to offer their vendor or landlord clients the listing service that best meets their property advertising needs,” Ms Cass-Gottlieb said.

The ACCC considers that the provisions in REA’s contracts had the effect of limiting its customers’ choices and hindering other listing services from effectively competing.