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Current as of 26/12/14 07:40PM NZST

Natalie Akoorie

Natalie Akoorie is a reporter at the NZ Herald based in Hamilton.

Agents shun Trade Me after listing fees surge

Agencies predict backlash against site after 'astronomical' rise in online charges

Photo / APN
Photo / APN

A group of real estate agents plan to boycott Trade Me after the company announced fee hikes labelled "extravagant" and "unaffordable" - a move that could impact on home-owners trying to sell privately.

One of the country's largest real estate chains, Harcourts, said it would not promote Trade Me to clients because it no longer provided "cost effective" advertising.

In Hamilton, at least three agencies have gone a step further and will remove residential property listings from the website, while two others will invoice vendors for the listings from February 1, to avoid what they claim are "astronomical" increases.

Other agencies will no longer offer vendors a free listing on Trade Me, opting to promote industry website realestate.co.nz instead.

Bayleys Waikato regional manager Stephen Shale, who also oversees Eves Realty, predicted Trade Me listings in Hamilton would be "decimated" by February.

"Trade Me will have virtually no stock in Hamilton," Mr Shale said. "And the viewings will diminish if the stock isn't there to look at. If there's nothing to compare your property to, the private seller is the one who'll pay because you're not going to have the eyeballs on the site and the industry site won't allow private sellers."

Under the new fees, his costs to list on Trade Me would increase 8,000 per cent. Previously, agencies paid a fixed rate for an unlimited number of listings but this month Trade Me began charging $159 plus GST per listing, which it encouraged agents to pass on to sellers.

However, agencies say home-owners expect online advertising for free and are not prepared to cover the increases.

Instead, agents will advertise on realestate.co.nz, as well as their own websites and via newspaper lift-outs.

Harcourts New Zealand chief executive Hayden Duncan called the increases at Trade Me "unreasonable" and "nothing short of price gouging". He said if Harcourts' 181 branches absorbed the new fees it would cost tens of millions of dollars each year.

"An increase of 500 per cent or more on any product without changing the product seems extravagant and unreasonable and unfounded."

Mr Duncan said Harcourts, which lists thousands of houses every month, would not advertise homes on Trade Me unless a seller specifically requested it and paid the fee.

In Hamilton, Lugton's Ltd sales director Simon Lugton said it was a "no brainer" to boycott Trade Me when the new fees amounted to at least $200,000 more a year for his business. "They think they're in a strong position but I think they will find there will be a backlash against it."

Lodge Real Estate managing director Jeremy O'Rourke said they would also remove residential listings, calling the increases "exponential, mammoth and unaffordable" for Lodge, one of Hamilton's biggest agencies.

Ray White Hamilton managing director Carl Glasgow said Trade Me seemed to be working on the premise that the internet had overtaken newspapers in real estate advertising, but it had not.

Trade Me chief executive Jon Macdonald said if Hamilton agents removed listings it would disadvantage vendors as their properties would not be seen on the "number one property channel in New Zealand".

He said a for-sale listing fee of less than $200 still represented value for money.

"We think it's crazy that listings online continue to be such a small proportion of the overall cost when people are selling their house, despite independent research and feedback showing that the internet works much better than print."

- NZ Herald

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