Home Consumer resources New REA research indicates increased consumer confidence in the conduct of property professionals

New REA research indicates increased consumer confidence in the conduct of property professionals

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Despite a turbulent property market, New Zealand consumers feel more empowered in property transactions and are becoming more confident in the real estate profession as a whole, according to new research commissioned by independent conduct regulator the Real Estate Authority (REA) .

REA’s latest annual perceptions research – based on fieldwork conducted in April-May 2022 – indicates strong consumer confidence in the conduct of the real estate sector as a whole, with significant gains in the perception that it is professional, well supervised, well regulated, fair and transparent.[1]

A consumer is someone who has bought or sold a property in the past 12 months.

REA’s Chief Executive, Belinda Moffat, says it’s encouraging to see growing consumer confidence in the property sector, as it aligns with REA’s goal of seeing people confidently engage in fair transactions with trusted real estate professionals.

“We are pleased to see the high standards of conduct indicators trending in the right direction, particularly at a time that has placed additional pressures on consumers and licensed real estate professionals, with COVID-19 restrictions and changing market conditions. However, we recognize that there is still work to be done to continue to ensure that all professionals meet the high standards expected. There is no time for complacency. We are committed to working with the industry to continue to raise standards of conduct to build trust and protect consumers from harm.

Research found that 85% of real estate consumers[2]

had some confidence in the New Zealand property industry as a whole.

Ms Moffat says consumer confidence reflects the positive regulatory impact of the REA, and that employment agencies and licensed real estate professionals strive to maintain high standards of professional conduct.

“As a regulator, REA sets high expectations for real estate licensees in the code of conduct we oversee. We help them meet these standards through our ongoing professional development program and regular industry guidance, and those who fail to meet the standards can be held accountable through our complaints and disciplinary processes.

The research also revealed:

  • 86% of all consumers surveyed feel very or somewhat empowered to participate effectively in their real estate transaction.[3]
  • 91% of Maori consumers surveyed feel very or somewhat empowered to participate effectively in their real estate transaction

Ms Moffat says the average consumer sentiment of empowerment has remained stable, with data breakdowns indicating the levels of successful buyers and sellers have increased, while those who are unsuccessful have felt less empowered in recent years. .

“Consumers’ sense of empowerment in a real estate transaction is important because it can indicate that they feel well informed and adequately in control of their part of the buying and selling process. While the outcome of the transaction naturally seems to influence consumers’ sense of empowerment, those who feel most empowered also frequently cite the conduct of the real estate professional involved as a contributing factor.

Ms. Moffat says that for REA, identifying consumer segments that deviate from the general population is particularly helpful.

“For example, in areas such as consumer empowerment, we see notable variations in terms of ethnicity, and this helps inform our work to engage with New Zealand’s diverse communities, ensuring that they are aware of REA, can access our information resources on the real estate transaction process and understand the standard of conduct they are entitled to expect from a licensed real estate professional in our country. »

The survey also indicated that consumers who rated their knowledge and understanding of what REA does very highly were among those who felt empowered significantly above average.

Consumer Awareness of REA Continues to Rise

The research also indicates that consumer and public awareness of the REA as a regulator of property sector conduct continues to grow. The search found:

  • 69% of all consumers were aware of the REA, an increase of 6% from 2021[4]
  • 74% of consumers identifying as Maori and 81% of consumers identifying as Pacific people were familiar with REA
  • 79% of consumers consider that REA provides clear and independent information
  • 78% of consumers consider REA to be trustworthy and provides information accessible to everyone[5]

REA oversees consumer website regulation.govt.nz

which provides comprehensive information to consumers on buying and selling real estate and publishes guides for consumers on the agency contract and the sale and purchase contract. The search found[6]:

  • 84% of consumers agree or strongly agree that
    colonized is trustworthy
  • 76% of consumers felt better informed after visiting
    colonized
  • 92% of consumers found the consumer guides little to very useful

Ms Moffat says this result reflects REA’s work to educate consumers about REA and its role.

“While we clearly want all New Zealanders involved in property transactions to know that REA is here as an independent conduct regulator and consumer protection body, as a young agency we are pleased with the progress what we have done to date. It is important that buyers and sellers know where to go for information or to complain about the conduct of a real estate professional. Knowledge of regulatory protections builds consumer confidence and increases the likelihood that serious driving issues will be deterred or reported to us when they arise.

Ms Moffat says people who access REA’s consumer resources (such as the Settled.govt.nz website) can better protect themselves with REA’s guidance on the due diligence they should undertake as potential buyers and the information they should disclose as sellers. Our recent work to provide our main consumer guides in seven languages ​​is a further step in our commitment to making REA accessible to everyone.

Buyers collecting property information; more sellers retain it

The research indicated that more than nine in ten buyers (94%) obtained additional information about a property (such as a building inspection report, land information memorandum or title search) before buying it. .[7].

Ms Moffat says that while this overall result is in line with REA recommendations, closer examination suggests some buyers might be doing more homework on the properties they are considering buying.

“While the research suggests that nearly all buyers obtain some form of additional information, each type of documentation was obtained by less than half of all buyers. This suggests that some buyers only undertake limited due diligence, which is a risk that REA recommends buyers avoid.

The REA is also concerned that 29% of sellers say there was something about their property that they were happy the buyer didn’t know about.[8].

Ms Moffat says sellers should share information about any relevant issues with a property, including unconsented alterations, boundary issues or waterproofing issues.

“If sellers don’t know what to report, they should discuss it with their licensee or attorney. A seller acting in good faith should put themselves in the buyer’s shoes and think about what they would like to know about themselves. he was buying the property.

Under the Estate Agents Act 2008, if licensees acting on behalf of a seller suspect that their property may have a latent or underlying defect, they must speak to the seller and inform potential buyers of the possible risks. A seller must disclose all relevant information about the property to its licensee, and if the seller denies permission to disclose such information to prospective buyers, the REA requires licensees to waive registration. Failure to properly disclose serious ownership issues could result in legal action.

REA recognizes that the research was undertaken as the market began to cool and that the cooling market may open up new opportunities.

REA is publishing this research report to enable the industry to better understand consumer and public perception, to help improve conduct and service, and to enable others working in this field to support and protect consumers.

About the survey

The latest annual perceptions research was conducted by Nielsen on behalf of the Real Estate Authority. The survey was conducted in two parts. The first part took place in the field between April 28, 2022 and May 23, 2022 and brought together 658 respondents. The first part of the survey was made up of people who have bought, sold, placed an offer or received an offer on a property in the last 12 months (referred to as “consumers”). Part two surveyed 816 members of the general New Zealand public. Fieldwork for the second part of the survey took place between April 28, 2022 and May 4, 2022.

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