Consumer Affairs Victoria has conducted a blitz of more than 60 Melbourne real estate agents’ offices looking for evidence of misleading price advertising.

During the unannounced visits, which occurred yesterday, the watchdog looked through files on about 1000 recent property transactions in search of suspicious activity.

"Our inspectors collected information relating to the estimated selling price established by the agent, the vendors’ price, the advertised price, the final sale price and other information for analysis," said Consumer Affairs director Claire Noone.

CAV visited offices in Brunswick, Clifton Hill, Coburg, Craigieburn, Essendon, Pascoe Vale, Point Cook and Werribee to give it a broad picture of the Victorian real estate market.

The regulator said one real estate agent tried to turn away inspectors during the surprise visit.
 
"However, after being advised that failure to allow entry and inspection of files were both offences under the Estate Agents Act, CAV successfully gained entry."

Putting issue to bed

"We welcome what the CAV is doing because it will help put the issue to bed,” said Robert Larocca of the Real Estate Institute of Victoria.

Mr Larocca said home buyers, facing eleven weeks of clearance rates in excess of 80 per cent in Victoria and "conditions (that) are not dissimilar to the boom year of 2007”, had spurred the CAV to act.

"We’re seeing prices increase beyond most vendors’, estate agents’ and buyers’ expectations and so people would like to know if there’s anything wrong with that," Mr Larocca said.

The median value of a Melbourne home was $492,000, rising 3 per cent, in the June quarter according to property research group Residex, while the median value of a Victorian country home was $279,000, up 1.6 per cent in the same period.

Vendors, agents, buyers and the media have been looking for CAV to do something, Mr Larocca said, so CAV had "increased their compliance efforts".

Nationally, home sales edged up 0.5 per cent in June, following a 5.7 per cent fall in May, according to data released by the Housing Industry Association today.

House bubble warning

The blitz happened on the same day Reserve Bank governor Glenn Stevens warned of the possibility of a housing price bubble, spurred in part by low interest rates and the expansion of the first-home owners’ grant.

CAV staged a similar blitz of the inner south-east suburbs in April, seizing more than 160 completed sales files.

And monitoring by CAV during the 2008-09 financial year resulted in five civil proceedings and two criminal prosecutions for underquoting by an agent.

One real estate agent was forced to pay a $20,000 fine because of his conviction.

czappone@fairfax.com.au

BusinessDay