Rates under review

Cabinet to amend real estate agents commission

COMMISSION rates charged by real estate agents for residential properties in Fiji, under the Real Estate Agents (fees, forms and appeals) Regulations, will soon be amended.

The changes were endorsed by the Cabinet to ensure fairness and transparency in the market while protecting the interests of property owners and potential buyers.

The regulations stipulated a cap of 2 per cent for commission rates on residential properties valued at $500,000 or less.

The cap was based on multiple factors including prevailing commission rates charged in the market, associated costs of property transactions and the Government’s objective to foster a more transparent and equitable framework for consumers.

However various limitations have been identified since the 2 per cent cap was gazetted in 2022.

These include the negative impact on business operations of real estate agents, its hindrance on market dynamics, and reduced competitiveness in the sector.

It also appeared that some agents have manipulated the 2 per cent commission rate, especially with the introduction of the disbursement policy. The Cabinet approved the removal of the 2 per cent cap on commissions for the sale of residential properties below $500,000.

This will enable the real estate market to operate on marketdriven commission rates fostering healthy competition and facilitating growth.

Therefore, any commission to be charged by a real estate agent, officer, or licencee on the sale of any residential property amounting to $500,000 or less will not be subject to any prescribed rate.

In addition, the Cabinet approved the formation of a working group comprising the Ministry of Trade and stakeholders including REALB, the Consumer Council of Fiji, and the Fiji Competition and Consumer Commission (FCCC).

This group will monitor the regulations to ensure their alignment with market dynamics and stakeholder needs.