Brownlee Gerry: Real Estate Agents Bill — Second Reading In Committee Third Reading 
Brownlee Gerry: Real Estate Agents Bill — Second Reading In Committee Third Reading 
[Volume:649;Page:18385] 
GERRY BROWNLEE (National—Ilam) 
: 
 I do want to make several comments on this bill. It raises the fundamental question about why we need this bill in the first place given there is currently an Act that guides a great deal of the activity of real estate agents in this country. The purpose of the bill states that it is for the protection of the interest of consumers in respect of transactions that relate to real estate and promote public confidence in the performance of real estate agency work. That immediately leaves us with the question about the range of work that a real estate agency undertakes. Right now it is not only the listing of properties the advertising of properties and the sale of properties—although technically they do not sell them they facilitate a sale between a seller and a purchaser and they connect the parties in a way that keeps them I suppose in a position of protecting their own interests—but also the extensive engagement in property management. Nothing at all in this bill deals with that aspect of their business. 
No doubt the genesis of this bill was a great deal of publicity made some time ago about one or two rogue performers in the real estate industry. It would be hard then to imagine why we need to turn the whole of the industry on its head with this Act when in fact there would not be a single professional body in this country where there are no rogue operators. Everyone regularly hears about the Law Society having to take action against some of its members for all sorts of things—perhaps coming to Parliament and telling porkies to a committee or covering up activities of someone deemed to be a client. These sorts of things happen and the Law Society duly takes the appropriate action to protect the integrity of its members. Similarly one could say that about the teaching profession and the medical profession. Periodically there are cases of doctors who go off the rails and they are discussed. If we look at all the professional bodies we see they all have some form of legislative protection and arrangement around the way in which those professionals may operate and we may find that there are rogue operators at various times. 
So what was the necessity to tighten up so very much on the real estate industry? I commend the efforts of the Real Estate Institute. It has said it wants to get tougher and wants changes that will enable it to get tougher. But I also accept that the provisions of this bill are just a step or two too far. One of the problems that beset the economy in New Zealand is the extraordinary cost of doing business. It is much higher than in many other countries in the world and when it comes to real estate New Zealand has some of the most expensive transactions anywhere in the world. I know we see people out there offering to do the job for 1 percent of the sales fee etc. but that is always on top of a range of costs that are pre-prescribed and generally prepaid by the vendor. In New Zealand it is not uncommon for real estate fees to be 4 to 5 percent. A fee of 4.75 percent is common and then there is a base fee as well. There is a range of fees up to that sort of level. It would be interesting to know why anyone would expect that this bill will lower that cost. We should surely be always looking to remove costs from our economy through legislation rather than at loading them into the economy through legislation. 
It would be interesting to hear from the Minister just how he thinks the changes he has proposed to this bill make it any more palatable to those who are on the other end of the bill. I suppose it would also be interesting to hear some recitation on the consultation that might have taken place. The Government is very strong on saying it consults widely and seldom moves without widespread acceptance of what it is doing. That is a little hard to understand given the current nature of polling but I will not go down that track. It would be interesting to hear from the Minister how he has been persuaded to change his mind.