The Commerce Commission is welcoming changes made by property data and digital services provider Valocity to its online property valuation ordering system (VOS). The changes follow a Commission investigation into concerns that Valocity's VOS may be limiting competition among property valuers, with consumers potentially paying higher prices for property valuations as a result.
Valocity provides data and digital services to the residential property industry in New Zealand, including major banks, property valuers and borrowers seeking mortgage finance from banks and other providers.
Valocity offers different types of property valuations, including Full Market Valuations (FMVs), which requires a valuer to physically inspect a property. FMVs are arranged by the major banks or mortgage brokers and are usually required for higher risk properties or borrowers.
Currently, a borrower can't choose their own valuer and must pay the fee. The fee for an FMV and the allocation of a valuer to conduct the FMV, are determined by Valocity. The Commission was concerned that by setting the prices of FMVs and determining which valuers would perform valuations, Valocity was effectively removing the ability of valuers to compete for work. This could result in borrowers paying higher prices for FMVs, particularly given the fact that banks typically don't allow prospective borrowers to arrange a valuation directly with a valuer.
Valocity has agreed to address the Commission's concerns by making changes to its VOS platform that give borrowers the ability to reject the fee set by Valocity and request quotes from valuers through the platform. It is expected that these changes will take effect from March 2025 and subject to the Commission being satisfied with the changes, brings the investigation to a conclusion.
Commission Chair John Small welcomed the change. "This is an important market for tens of thousands of Kiwis each year, so we're pleased that Valocity has agreed to make these changes to its online valuation ordering service.
"We always encourage consumers to consider their options when deciding the best deal for them, and it is no different for FMVs."
The Commission has also engaged with other industry participants, reminding them of their responsibilities under the Commerce Act.
Background
Agreements that substantially lessen competition are illegal under section 27 of the Commerce Act. These agreements could be in the form of a written contract or an informal understanding. The Commission website includes more information about anti-competitive agreements here.
