Real Estate regulator protecting KIWIS in a changing market

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The Real Estate Authority’s (REA) 2021/22 Annual Report published today, highlights the value of a robust and effective regulatory regime for protecting New Zealanders in the context of a pressurised real estate market. In the reported period, REA issued a record number of new real estate licences (2,628), and overall complaints decreased by 15%. Over the period, awareness of REA as the real estate sector conduct regulator and consumer protection agency increased and confidence in the conduct of real estate professionals held steady.

REA received 271 complaints and 1,108 complaint enquiries. 107 decisions were issued by Complaints Assessment Committees and 22 decisions were issued by the Real Estate Agents Disciplinary Authority. As at 30 June 2022 there were 16,866 active licences.

REA Chair, Denese Bates KC, acknowledges that the 2021/22 financial year was a turbulent one for real estate consumers, licensees and the Authority.

“I am proud of REA’s achievements this year under challenging and changing conditions, and the positive impact we have had on the wellbeing of New Zealanders in this first year of delivery of our new four-year strategy. As the Annual Report demonstrates, despite the pressures of a shifting market and COVID-19 operating restrictions, we have seen indicators of improved conduct by real estate professionals and effective consumer empowerment and protection,” says Ms Bates.

REA Chief Executive, Belinda Moffat, says the regulator is pleased to have responded successfully to distinctive risks and taken opportunities to enhance the clarity of regulatory information. Our work to increase engagement with diverse communities has been a particular highlight.

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“In late 2021, we worked with key stakeholders to develop and issue clear and timely guidance for how real estate businesses could safely operate under COVID-19 restrictions. Later in the financial year we took milestone steps to increase the accessibility of key real estate consumer protection information to speakers of other languages. Importantly, we undertook consultation and drafted clarifying guidelines on how we assess the requirement for a real estate license applicant to be fit and proper. This work provides certainty to the sector about what it takes to be a licensed real estate professional, and confidence to the public that the sector is well-regulated,” explains Ms Moffat.

Increase in licensee numbers, but reduction in formal complaints

The financial year saw REA receive 271 formal complaints; a reduction of 15% on the preceding year.

“While the reduction in complaints may reflect a slowing market it also indicates improved conduct by real estate professionals,” says Ms Moffat.

The number of licensed real estate professionals remained high during the year, with total active licensees reaching 16,866 at 30 June 2022, an increase of 3.7% on the year before.

“With the number of licensees increasing year-on-year, REA continues to support all licensees to maintain high standards of conduct and prevent consumer harm, including through a regularly updated Continuing Professional Development programme.”

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Consumer awareness of REA

While consumer awareness of REA has increased, phone calls and complaints received by REA were down on the last financial year. Highlights from the year include:

69% of consumers (being those engaged in a real estate transaction in the last 12 months) are aware of REA (up 6% on 2020/21)
684,986 visits to rea.govt.nz (up 22%)
14,947 phone calls received by REA (down 33%)
4,135 general enquiries handled by REA (up 5.9%)
1,108 complaint enquiries received (down 26%)
168 complaints resolved through REA’s early resolution process (down 8%)
87% of participants in the complaints process agreed the process was independent, fair and transparent (up 10%).

The Annual Report also highlighted the value of REA’s guidance and resources to consumers and licensees, which play a key role in REA’s harm prevention approach:

92% of consumers found the information and guidance provided by REA useful
86% of consumers feel empowered to participate effectively in a real estate transaction
84% of consumers who are aware of settled.govt.nz consider it a trustworthy website
71% of licensees used REA websites for guidance on how to conduct real estate transactions under COVID-19 restrictions
87% of licensees agreed REA’s COVID-19 guidance helped them to understand how to safely conduct real estate transactions in changing COVID-19 restrictions
97% of licensees found REA’s compliance guidance useful in understanding their regulatory obligations.

“REA aims to see people confidently engaging in fair transactions with trusted real estate professionals. We seek to have an impact by informing and empowering real estate consumers across New Zealand’s diverse communities, and by educating and engaging with licensees to enable them to meet their regulatory obligations. We are encouraged by the results we were able to deliver in the last financial year, and we are continuing to build on this momentum,” Ms Moffat says.