Every year, the Real Estate Authority publishes statistics about
the industry in its Annual Report. Last year, we passed on the good
news that complaints made about real estate agents were at an
all-time low. The REA has just published its report on the year
from July 2022 – June 2023.
It's great to see that the downwards trend continues; the REA
received only 252 formal complaints last year.
REA Reporting year Number of formal complaints
2015/16 564
2016/17 477
2017/18 337
2018/19 296
2019/20 288
2020/21 320
2021/22 271
2022/23 252
We represent real estate agents throughout the country, and have a great relationship with many agencies. Here are some anecdotal guesses about what is behind the downward trend, picked up from our work and conversations with friends in the industry:
- We are finding that a higher proportion of the complaints we defend are more complicated than they have been previously. That suggests that the industry has done a fantastic job of raising the 'baseline' of compliance. More agents/licensees are performing key competencies better than they used to.
- There are fewer applications for licences. The number of active licences in New Zealand reduced from 16,846 in July 2022 to 15,973, with new licence numbers down. That reflects a cooling in the property market, but also a reduction in junior agents joining the profession. Branch Manager class licences increased last year, so the agents already working are becoming more experienced, and less likely to have complaints made about them.
- Banks have tightened up on lending. Aside from high-interest rates discouraging people from buying houses, banks seem to require more due diligence now than previously to lend money. That may mean that purchasers are forced to do more due diligence of their own rather than relying on marketing representations, which can lead to complaints.
- Linked to due diligence, consumer awareness could be increasing. That is, vendors and purchasers are now more aware of real estate transactions, more likely to ask proper questions and be less naive about buying and selling.
- This one is really speculative: it might be that housing stock is getting better so purchasers are less likely to have nasty surprises. The number of unremediated leaky homes being bought and sold must surely be reducing, and in Canterbury the widespread replacement of old earthquake-damaged housing with new builds might factor in. Simple transactions involving modern housing are less likely to generate complaints for agents than old houses with potentially undisclosed issues.
There will probably be some truth in all the guesses above. The take-home message is that something is working, and the real estate industry is doing well to reduce formal complaints. In a healthy regulatory system, though, the number of complaints should never fall to zero. We are also seeing the same number of frivolous/crazy complaints come in as before.
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