In October 2005, the former Minister for Consumer Affairs, Hon Marsha Thomson MP, instructed the Council to inquire into and report on the feasibility of creating greater competition in the real estate industry by relaxing the requirements for accountants, solicitors and other appropriately qualified professionals to obtain an estate agent’s licence.

In July 2006 the Council delivered an Interim Report to then Minister Thomson seeking permission to undertake the next stage of the review, a segmentation study of the industry.

In May 2007 Allen Consulting Group (ACG) were contracted to undertake the second stage of the Licensing System Review, Real Estate Agency Market Segmentation Study on behalf of the Council. The project is being managed by Consumer Affairs Victoria and overseen by a Steering Committee comprising representatives from ACG, CAV and the Council.

The study’s objectives are to identify and describe segmentation in the market for estate agency services, and for each segment, to:

• Examine the transactions, characteristics and functions of suppliers and consumers in the market;
• Identify the risks to participants in the market for estate agency services and the available protections; and
• Assess competition, including the impact of changes in the regulatory arrangements over the last five years.

The terms of reference for the Real Estate Agency Market Segmentation Study are as follows:

• Define the market for the provision of estate agency services in Victoria, taking into consideration supply and demand characteristics;
• Identify and examine the nature and extent of segmentation in the estate agency service market and, where applicable, reference arrangements in other states;
• Describe the industry participants and functions characteristic of each market segment including the individuals and types of businesses;
• Describe the transactions characteristic of each market segment in terms of the size (in dollar terms), number, nature and complexity of transactions;
• Describe the consumers characteristic of each market segment including the likely harms arising for those consumers and the consumer protection available;
• Assess the nature and extent of competition within each market segment, including the impact on competition of changes in regulation affecting estate agency during the last five years; and
• Identify the issues and implications of the market segmentation arrangements as a factor to be considered in reviewing industry licensing arrangements.

The Council is pleased to release the Real Estate Agency Market Segmentation Study. The Council is confident that the research contained provides a valuable snapshot of the real estate agency market in Victoria. The report explores issues that are relevant to the development of a national licensing system which will be useful regarding future considerations of the regulatory framework for the estate agency industry.

Download a copy of the Real Estate Agency Market Segmentation Study