A proposal to tighten controls on the industry will create needless layers of bureaucracy that could cost house buyers or sellers, say some real estate agents.
Chief executive of First National Real Estate Paul Slatin says the extra costs are unnecessary. A better plan would be to make changes to the existing, industry-led framework, he says.
On Tuesday, the Government revealed a plan to regulate the real estate industry by setting up an agency to deal with licensing and complaints.
Associate Justice Minister Clayton Cosgrove says self-regulation has failed to protect consumers from rogue agents, and the changes are needed to restore confidence in the industry.
A new Real Estate Licensing Authority would be responsible for licensing and maintaining a public register of agents. It would investigate and hear complaints, and be able to impose a range of penalties, including ordering compensation and de-licensing agents.
The authority would be funded by the industry, probably through a mix of licence fees and levies.
Under the changes, agents would no longer have to be members of the Real Estate Institute.
The institute says it is not threatened by the prospect of losing control of the industry. Vice-president Mike Elford says the organisation will still have a role to play. He thinks that on the whole the changes are necessary.
There will be six weeks for consultation before the Government draws up legislation.
The industry has been self-regulated since 1976.
About 100,000 buyers purchase property in New Zealand each year.
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