New Zealand property tycoon Ron Hoy Fong to be prosecuted for ‘bid rigging’ and ‘cartel conduct’

Fong is a third-generation New Zealand-born Chinese, according to his company website. By 2017, he owned 34 investment properties worth NZ$25 million (US$16.5 million)

New Zealand has in the past decade endured a housing affordability crisis, driven by low interest rates, limited stock and purchases by wealthy immigrants

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Property tycoon Ron Hoy Fong. Photo: Facebook

Published: 3:34pm, 8 Jul 2019Updated: 10:31pm, 8 Jul 2019

A company owned by New Zealand property tycoon Ron Hoy Fong, who allegedly encouraged buyers to use fake names and work together to fix prices in Auckland’s residential property market, is facing prosecution from the country’s consumer watchdog in the High Court.

New Zealand’s Commerce Commission, in its legal action against Fong’s Ronovation Limited (Ronovationz), accused the company of encouraging real estate price fixing through “bid rigging” and “cartel conduct”.

Fong is a third-generation New Zealand-born Chinese, according to his company website. His biography says he first started investing in properties in 1969 and by 2017 had 34 investment properties worth NZ$25 million (US$16.5 million).

New Zealand has in the past decade endured a housing affordability crisis, driven by low interest rates, limited stock and purchases by wealthy immigrants. Although Auckland’s home prices have been stable for the past year, it is the seventh least affordable housing market among 91 major housing markets around the world, according to the latest Demographia International Housing Affordability Study based on data from the third quarter of 2018.

The study indicates the average family would need to save for nine years without spending a single dollar to afford a home in the country, compared to 21 years for Hong Kong, seven years for Australia and just under five years for Singapore.

The commission said it had entered into a settlement with Ronovation Limited to resolve the proceedings, with a penalty hearing to be scheduled.

“Ronovation [trading as Ronovationz] was set up in April 2009 and conducted business advising members on how to acquire and improve investment properties in Auckland. By March 2018, Ronovation had over 400 paid members,” the commission said. “The commission alleges that Ronovation developed rules in September 2011 to govern the conduct of members, including rules that prevented Ronovation members from competing for properties.”

These rules, the commission concluded, “amounted to cartel conduct”.