Mr Peter BushbyREIA PresidentPRESIDENT’S REPORTWELCOMEFROM REIA’SPRESIDENTHello and welcome to the Novemberedition of REIA News. It’s hard to thinkthat in only six weeks, Christmas willbe upon us – hasn’t the year flownby? It’s been a very busy year for REIAand for the real estate sector as awhole with things particularly busyat the moment in Victoria as REIVfights damaging changes to the EstateAgents Act enacted by the currentLiberal State Government. REIA haspledged its full support behind REIV’scampaign to reverse the decision in thelead‐up to next week’s state election.Following the AGM in December wewill welcome some new faces to theREIA Board next year and I take thisopportunity to acknowledge and thankretiring directors Morgan Shearer,David Airey and Adrian Kelly for theirmany years of dedicated service.Real Estate Institutes of Tasmania,South Australia and Victoria haveall also recently elected newpresidents. The changes are:• In Tasmania, Tony Collidge has beenelected to serve as the 2014‐15 REITPresident after outgoing PresidentAdrian Kelly did not stand for reelection.Mr Collidge was electedunopposed. REIA would like tothank Adrian for his four years asservice as the President and forthe support that he has providedduring that time, particularlystepping up as an REIA directorwhile I have been President.• REISA has elected former presidentGreg Moulton as incomingpresident, replacing outgoingpresident Ted Piteo. Mr Moultonwas president of REISA between2011 and 2013. He is also chiefexecutive officer of Harris RealEstate. We would also like to thankTed Piteo for his contribution tothe industry as REISA President.• REIV has elected President,Ian McDonald who has workedin real estate since 1966 andhas been a licensed agent since1968. REIA thanks out-goingPresident, Neville Sanders for hiscontinued support and service inthat role and his valuable inputas a REIA Board Director.I also had the pleasure recently ofattending the 2014 AuctioneeringChampionships, held in the beautifulcity of Auckland, New Zealand.I would like to congratulate the RealEstate Institute of New Zealand onhosting this marvellous event, whichwas a resounding success. While forme personally, it was disappointingthat Australia was unable to bringhome the trophy, the standard ofauctioneering on show at this year’sevent was truly impressive and ourfinalists certainly did us proud.Mr Peter BushbyREIA PRESIDENTFollow us on Twitter @REIANational
COVER STORYThis article is brought to you by REIAChief Executive Officer, Amanda LynchREIA recently spoke beforethe Parliamentary JointCommittee Inquiry into theFinancial Services Industry,which is consideringproposals to lift the industry’sprofessional, ethical andeducation standards. Ourinvolvement with this inquirywas at the request of thecommittee, although REIA hasbeen pro-actively workingto address community andindustry concerns about theblurring of lines betweenreal estate agents and theprovision of financial advice.This matter is a complex one and inmany ways is an issue that stemsfrom the training standards, both forfinancial service providers and realestate agents alike. REIA firmly believesin setting high standards and trainingwithin our profession and has stronglysupported the Federal Government inits moves to ensure a more rigorousregulation of training providers.While we recognise that for the mostpart, few if any, real estate agentsare involved in the promotion ofSMSFs, some of our members reportthat there is increasing demand fromaccountants who managed SMSFs onbehalf of trustees as well as verticallyintegrated organisations that approachagents seeking suitable properties.We were pleased to be able to reportto the committee that the vastmajority of real estate agents do notmake estimates on rental returns orcapital gain on properties. Those thatdo, use information that is publiclyavailable through agencies such asthe Australian Bureau of Statisticsand the Bendigo and Adelaide Banksand REIA’s Real Estate Market Facts(REMF) and the Housing AffordabilityReport (HAR). Importantly, no paymentis sought for this advice as it forms abasic part of being a real estate agent.However, the current federal inquiryinto Australia’s financial system isalso concerned about the qualityof information provided to SMSFoperators as well as the fact thatsome people borrow to purchaseproperty as an SMSF investment.These issues are increasingly attractingmedia attention and are often pitchedaround the theme that there needs tobe a ‘crack down on property spruikers’who are capitalising on the recentgrowth in house prices, particularlyin the eastern state capital cities.Only this week, the AustralianSecurity and Investment Commissionannounced it had begun proceedingsin the NSW Supreme Court seekinginterim and final orders to preventproperty investment promoter, ParkTrent Properties Group, from carryingon an unlicensed financial servicesbusiness involving the promotion ofSMSFs to buy investment property.»»article continues
COVER STORY CONTINUEDWhen REIA spoke to the ParliamentaryCommittee, we detailed our knowledgeof clusters of agents in certain areas,who had a dual role in also being afinancial planner but that the costof the personal indemnity insurancerequired to offer financial advice wasa sufficient deterrent for most realestate agents. On the flip-side, whathas concerned REIA greatly is mediareports that some financial advisersare seeking fast-tracked coursesthat offer real estate licences. Thesecourses do not require attendants tosit any exams, are completed solelyonline and have a very suspicious100 per cent success rate.While these sort of courses are in theminority and exist only on the outlierof the industry, REIA has been workingvery closely with the Australian SkillsQuality Authority (ASQA) to improvethe integrity of registered trainingorganisations (RTOs) offering realestate courses with the end resultthat we would like to see those RTOsorganisations offering ‘no course,no examination 100% success rates’deregistered. REIA is obviously veryconcerned about the repercussionsthat stem from these sorts of courses,if for no other reason than that peoplewho undertake them find it very hardto secure work within the sector asthe courses are not at all regardedby established real estate agents.The recent announcement by FederalIndustry Minister, Ian Macfarlane toprovide a funding boost of $68 millionover four years should give ASQA asharper bite in being able to addresspoor training practices. REIA wouldalso like to see ASQA sharpen itsfocus on a risk-based approach toregulation, which will scrutinisethose disreputable RegisteredTraining Organisations (RTOs) andbrokers offering quickie courses thatcompromise industry standards.While for the vast majority of ourmembers, these debates overstandards in the financial servicesindustry, the promotion of SMSFsand the existence of quick courses donot interfere with the professionalmanner in which they undertaketheir role, it pays to be mindful of theimpact that unscrupulous operatorscan have on our sector and theneed to close the loopholes thatallow these ‘spruikers’ to operate.
This article is brought to you by REIAResearch Officer, Evgeniya HawthorneEvgeniya can be contacted firstname.lastname@example.orgASPIRING AUSTRALIANSTURNING TO DEBTTO FUND THEIR FIRSTHOME DEPOSITThe latest housing finance figuresshowed first home buyers as aproportion of all owner occupierhousing finance commitments fell tohistorically low levels – only 11.8%.While the Australian Bureau ofStatistics is evaluating the robustnessof estimates of loans to first homebuyers, emerging reports show thataspiring home buyers are overreachingthemselves in order to enter theproperty market. Some first homebuyers find investing in propertyrather than purchasing their ownhome, is a more affordable optionDEPOSIT SOURCE BREAKDOWN FOR AUSTRALIAN FIRST HOME BUYERS, %SavingsGi from parentsBorrowed from parentsInherited moneyGi from family memberBorrowed from family memberPersonal loanBorrowed on a credit cardWinningsOther0 10 20%6912131491012764while others, worryingly, are turningto non-saving based sources in orderto raise a deposit for their first home.The 2014 Mortgage Choice RecentFirst Home Owner Survey shows thatrising property prices are forcing firsthome buyers to save for longer thanever before in order to get their footonto the property ladder. The surveyshowed of over 1,000 first time buyerswho had purchased within the lasttwo years, 26.5% said that they hadbeen saving for more than five yearsbefore buying their first home.FIGURE 1 Deposit source breakdown for Australian first home buyers, %30 40 50 60 70In addition, Mortgage Choice’s 2014First Time Investor Survey found thatone in five first time investors optedto purchase an investment propertyinstead of an owner occupied, astheir first ever property purchase.Further still, 16.7% indicated thatthey could more easily afford aninvestment property rather thanan owner occupied property. Thissurvey reflects what many agentsare witnessing first-hand.The most recent GenworthHomebuyers Confidence Index Reportsuggests that first home buyers arebecoming more burdened with debt,with deposit source data showingthat they are more likely to haveused personal loan and credit cardproducts to meet their first homedeposit. Twelve percent of surveyedfirst home buyers said that theyhad taken out a personal loan, and7% borrowed on a credit card tosupplement their deposit. Genworthfound that 31% of first home buyers,who used a personal loan or creditcard, relied exclusively on debt fortheir deposit. With credit cards havinghigher interest rates than other formsof credit, the findings are alarming.»»article continues
Celebrating excellencein the real estate professionWith three quarters of Australianfirst home buyers having less thana 20% deposit, it is critical that firsthome buyers have an alternativeway of financing their deposit.The Real Estate Institute ofAustralia has long advocated for theFederal Government to establisha scheme that encourages youngAustralians to contribute to voluntarysuperannuation and then allow themaccess to these resources as part of thedeposit for a first home. The proposedscheme would allow flexibility for thesaver to decide whether all or partof their superannuation is neededto augment the home purchase.Similar schemes have already provensuccessful in Canada, New Zealandand Singapore and there is no reasonwhy it wouldn’t also work in Australia.REIANATIONALAWARDSFOREXCELLENCE20157.00 pm THURSDAY12 MARCH 2015PERTH WAClick here to book and secure your tickets anddiscount hotel rates. Book now for discountedCrown Perth hotel rate: Quote REI 120315REIA believes in the benefits ofcontinuing the high ownershiplevel in Australia, particularly asthe population ages, and stronglyencourages the Federal Governmentto help implement solutions that willassist aspiring first home buyers.
This article is brought to you byREIA Manager Policy, Jock KreitalsJock can be contacted email@example.comTHE CONSEQUENCESOF NOT ADDRESSINGHOUSING SUPPLYMuch has been written about the needto address the under-supply of housingto improve affordability, includingby REIA in this newsletter. Theconsequences of inaction are howeverfar broader than high house prices andinclude economic and social disruptionacross the demographic spectrum.Earlier this year, REIA hosted aroundtable discussion on housingaffordability, which was attended bykey Government and industry leadersfrom real estate, construction andfinance sectors as well as communitygroups. The roundtable identifiedunder-supply as a priority policy issuein addressing housing affordability.According to a recent study by theHousing Industry Association onAustralia’s housing requirements,annual new home buildingrequirements between now and 2050will be considerably higher than whathas been achieved over the last 20years. The study concludes that thenation will need to build an averageof around 186,000 dwellings perannum. This requirement comprises152,000 homes to provide housingfor new households and between30,000 and 34,000 dwellings tooffset demolished homes. Thisfigure would also satisfy the demandfor new housing associated with arise in real household incomes.We are already seeing theconsequences of not addressinghousing shortages here in Australia.One of the groups affected areAustralia’s expanding ranks of retireeswith inadequate retirement savings– the average nest egg is little morethan half of what is required for amodest retirement. Many are turningto manufactured homes in caravanparks as they provide an affordablesolution for an ageing population.With the number of Australians over65 set to grow at double the rate ofthe total population, more retireeswill turn to options such as these. TheProductivity Commission has estimatedthat the number of Australians olderthan 75 would rise by about fourmillion between 2012 and 2060.An insight into what may be anotherconsequence of inadequate housingsupply is provided by Berlin.In Berlin’s Kreuzberg district, whichhas a shortage of affordable housing,long-time residents have beenpriced out of their neighbourhoodsas newcomers flock to the city asthe local economy grows. This clashof cultures has actually resultedin violent street behaviour.In Kreuzberg, rents have increased by64 per cent in the past three years.Whilst in Berlin, on average, rentshave increased by 43 percent. Bycomparison, the national economicgain during that time was 7 per cent.The changes that are occurring inBerlin can not be just dismissedas the fall-out from gentrificationwith the shortages so great thatthe consequences are on a scalethat amounts to social upheaval. Analmost ironical consequence is thatdevelopers are backing out of earliercommitments to redevelop areasbecause of the community clashes.Whilst the situation in Berlin maybe readily dismissed as unlikely tohappen in Australia, it is a pointerto what happens when there aresevere housing shortages.State and territories housingrequirements between nowand 2050 (Figures indicate thenumber of homes requiredto be built each year)NSW between 35,709 and 57,887Vic between 33,226 and 62.947Qld between 31,287 and 59,983SA between 5,566 and 11,869WA between 25,719 and 45,722Tas between 250 and 2,989NT between 1,769 and 2,188ACT between 2,246 and 4,853
WHAT EVERY AGENT OUGHT TOKNOW ABOUT DIGITAL MARKETINGHOW AGENTS CAN INCREASE LISTINGSBY SHARING THEIR KNOWLEDGE ONLINEBy Campbell McPherson. Campbell is an expert digital marketer and his business specialisesin providing strategies to help small business owners get leads and sales online.campbellmcpherson.comCampbell McPhersonEstate Agents are often frustrated at thetime it takes to grow their listings and rentrolls. Traditional methods like referrals,free valuations and cold calling take time!Particularly for those with under tenyears in the industry, listings growth canbe a huge problem. It shouldn’t be.In the internet marketing industry there isa tried and proven approach to selling highvalue products. This sales model involves theseller giving away free information to buildtrust and credibility. The seller uses cheapmodern tools like email newsletters andwebinars to share this information digitally.In doing this they spread goodwill andestablish their own personal brand with theirprospects. Internet marketers know that bysharing insights and educating their leadsupfront, they will make more sales later on!The Australian real estate industry enjoysa highly engaged public. Most Australiansare mad about the housing market; wecan argue about it for hours! Puntersare dying for insider expertise, yet mostrely on piecemeal press coverage or illinformedopinions of friends and family.If you’re like most estate agents, you takeyour existing knowledge for granted.You compare yourself against the bestin the industry and forget that you haveinformation that the average investorwould LOVE to know!This information gap presents an opportunityfor ambitious agents to grow listings and rentrolls with an internet marketing approach.Because if it’s you giving your prospects theweekly low-down on the market, it’s youthey’ll come to when it’s time to transact!Here is how the process works:STEP 1: Create a Lead MagnetYou create a free gift that you give awayto prospects in exchange for their details.Your ‘Lead Magnet’ can be as simple asa ‘free valuation’. However a productwhich educates the buyer allows youto build more goodwill. These include afree eBook, home seller’s guide, industryreport or online seminar (‘webinar’).These gifts also help you position yourselfas an expert authority figure in yourarea. You advertise your free gift online(for example, on Facebook or Google)and encourage prospects to providetheir details so they can access it.STEP 2: Build relationshipsYour prospect will receive your free giftand be automatically subscribed to youremail newsletter. They are now a lead!Once or twice a week, you send your ‘list’emails providing more valuable insightsand advice about the industry. What areyour comments on the weekend’s auctionresults? What are industry insiders talkingabout? What’s hot right now? What’s aninteresting story you have this week abouta house you had listed? And so on. Youremails should have your own personality,humour, views and opinions. Use your ownunique voice and avoid bland corporatespeak. It’s YOU people want to hear from,not a generic agency newsletter. Peoplebuy from people, so it’s all about you andyour personal brand! With regular valueaddingemails, you will quickly becomeknown, liked and trusted by your leads.STEP 3: Invite human interactionOnline advertising is great for attractingattention and getting leads, but nothingcompares to human interaction when itcomes to sales. Some of your leads willcome straight to you, but others will needa little encouragement! Most estate agentsknow how to sell to a lead that’s in frontof them. It’s initiating this interaction inthe first place that’s the challenge. Again,we can invite this interaction with thepromise of free value! You can offer moreinformation both on a tailored, individualbasis (e.g. an on-site consultation, ahome inspection, or a consultation call).However, if you have less time, you cando this on a more scalable group basis(e.g. workshops, seminars and webinars).You can invite this interaction with theseleads by emailing them special offerson your newsletter. You can also useFacebook to advertise offers exclusivelyto your leads database. [You can alsocall your leads directly, however yoursales conversions will be far higher if youyour leads approach YOU first.] Imaginethe difference it would make to yourlistings, if you had 1,200 subscribers onyour weekly newsletter! When the timecomes that they’re ready to take actionon buying, selling or renting their nextproperty, it’s you they’ll come to!More and more small businesses aremaking use of the internet marketingmodel. It’s only a matter of time beforeit becomes common in the real estateindustry. But right now the field iswide open for ambitious agents toget in ahead of the competition!
INDUSTRY ARTICLEI S YOU RPER S O N A LLIFE HIGH ONTHE BUSINESSA G E N D A?Will IrvingGROUP MANAGING DIRECTOROF TELSTRA BUSINESSWhile technology innovation isundeniably changing the way Realtorsand Agents operate in business, it isoften overlooked how these sametechnologies can be used to enableflexibility in the workplace, anddrive greater work life balance. Infact, a recent survey conducted byTelstra Business shows that smallbusiness owners want to worksmarter, not harder, and invest timesavings into an improved lifestyle.It appears that the age old conundrumof a ‘better work life balance’ is stillalive and kicking – especially in thelead up to the holiday season.Will Irving, Group Managing Director,Telstra Business, says that mobilesolutions can help to unlock time thatRealtors and Agents can invest backinto their lifestyle, which was one of thereasons many in the industry chose to setup their own business in the first place.“Finishing jobs sooner or getting more doneeach hour is imperative in any businessand one of the easiest ways to do that is byreducing time spent on admin tasks. Smallbusiness owners are half way there. Thesurvey shows they are using a smartphoneor tablet for 8.5 hours during the workingweek, but they are not taking full advantageof these devices, as only 46 per cent areusing mobile business applications and only25 per cent are using cloud computing tobe able to efficiently share critical businessinformation amongst their team.”Mobile business apps like Canvas andDocuSign, for example, produce invoices onthe spot from your smartphone or tabletand make carbon copy books and re-typingdata into a computer a thing of the past.It’s these smart features on mobile devicesthat have the potential to give businesspeople back time in their work day.“With Christmas just around the corner,getting some extra time to spend withthe family is especially important.Cloud computing software such asMicrosoft Office 365 combined withmobiles, tablets or laptops lets you getout of the office but keep on top of urgentemails and documents from whereveryou are on holiday,” added Mr Irving.Will Irving’s top time-savingtips to beat the clock1 Don’t let technology own you: makesure that the technology tools youchoose are set up specifically for youand your business. Get expert adviceon making the most of each deviceusing apps and functions that can saveyou time and money.2 Don’t tie yourself to the desk: cloudcomputing and mobile devices such astablets now let you run the businesswhether at the office, at showingproperties, or working from home.3 There’s a business app for that:business apps can make doing businesseasier when out of the office. Telstra’sMobile Business Apps includingARISapp, DocuSign, Canvas and GeoOP,take business processes mobile, evenreplacing pen and paper forms – soyou can work during traditional ‘downtime’ as well as save time on admin.4 Be flexible: The old notion that afull-time working week is nine to five,40 hours a week, tied to one location,is fading fast, as customers expect24/7 service with both employees andemployers are seeing the benefits ofharnessing a more flexible culture,which in turn improves work lifebalance.
INDUSTRY ARTICLERENT ROLLS – BE SALE READYBy Christine Murray and Kristen Porter, Meyer Vandenberg LawyersChristine Murray from lawfirm, Meyer VandenbergKristen Porter from lawfirm, Meyer VandenbergAs the property market tightens, thefocus of real estate businesses tendsto turn towards rent rolls for securingrevenue. When it comes time to moveon and sell your rent roll, being ‘saleready’ can help you to take advantageof a seller’s market when it occurs.The Assets of the BusinessIt is generally accepted that when aproperty management agency agreement issigned by a client, you get an immediatelyvaluable and tradeable asset – or do you?Not many principals carefully consideror review the terms of their agencyagreements. Most principals think of theiragreements only in terms of regulatingthe relationship they have with theirclients. They do not turn their mind tothe relationship they will have in thefuture with a buyer of their business.Your agency agreements affect yourrelationship with a buyer of your business,and even a banker if you wish to refinance.Selling your Rent RollLook at your agreements and askyourself the following questions:• Are the agreements personal to you?• Do the agreements include opt-outprovisions or can they be assignedto a buyer of the business?• On a sale of your business, do youneed to seek the consent of eachclient to be transferred to the buyer?The sale of your property managementportfolio can be emotionally drainingand time consuming. Do you want toadd to the frustration if your agencyagreements are not easily assignable?Finance for smaller portfolios can be achallenge. Banks may lend against thevalue of your rent roll without takingseparate security, but only if youragency agreements are enforceable.Not only do you need to identify howeasily assignable your agency agreementsare, but you will also need to ensurethat they comply with the legislation.Making sure your agreements are legallycompliant will ensure a better resultwhen it comes to a sale or refinance.Increasing the Valueof your Rent RollThe value of your rent roll will usuallybe based on a formula which is amultiplier of the yearly management fee.A retention period may be nominatedduring which any leakage of propertiesfrom the portfolio will be adjustedagainst the sale price. Apart fromhaving your agreements in order, highmultipliers and a strong sale price canbe gained through the following ways:• What are your plans after sale?A restraint of trade will ensurea higher sale multiple.• If you are in a franchised business isyour franchise agreement current?Timing becomes extremely importantas there are certain points in timein a franchise arrangement whichcan trigger a higher sale price.• Managing more fixed termleases than periodic tenancieswill increase the sale price.• Operational and financial hygiene,including arrears management, iscrucial. Do you have sound debtcollection procedures in place?• Will your property managers stayon and increase the retention rateafter the sale? Are their employmentagreements up to date and in linewith any changes in the law?• Don’t just sell to the person who offersthe most money. Sell to someone whois capable of looking after your clientsto the end of the retention period oryou will lose more than you gained bytaking a higher offer initially. Avoid sellingto someone with a bad reputation.There are many issues which are unique tothe sale of a rent roll and you should seeka business lawyer who specialises in realestate and rent roll businesses for advice.
CONGRATULATIONSTO PAM BENNETTREIA DIRECTORVISITS HAWAIITO TALK REALESTATELast month, REIA and REIACT DirectorStan Platis visited Hawaii in the UnitedStates, as a guest speaker at the HawaiiInternational Real Estate Councilconference to provide an update onthe Australian property market.REIA would like to congratulate Pamela Bennett on becoming thefirst female life member of the Real Estate Institute of Queensland.Mrs Bennett has a long history of involvement in Australia’s real estatesector having served as the REIA president from 2011‐2012. Mrs Bennetthas also served as the REIQ chairman for four and a half years and onits board for nearly 15 years.Mrs Bennett is the first female Life Member of REIQ in its 96 yearhistory with REIQ recently also appointing its first female CEO.Mrs Bennett is a licensed real estate agent who held a Professionalsfranchise for 31 years and has chaired the Consistent Education andLicensing Committee for the past four years and has served 15 yearsas the Industry Representative in Queensland on the ResidentialTenancies Authority.In his presentation, Mr Platis outlinedrecent developments with regard tothe Australian residential propertymarket and spoke to the conferenceattendees about the economicfactors that help drive investmentsbetween the two countries. Mr Platisinformed conference participantsabout foreign investment rules thatgovern the property transactionprocess in Australia, and shared someinsight on industry cultural differenceswhen dealing with customers.
12AUCTIONEERINGCHAMPIONDECLARED1 REINZ hosted what was a spectacularevent in Auckland2 Championship winner, Andrew North fromNZ during the final rounds of competitionAfter a week of tight competitionin Auckland, the AustralasianAuctioneering Champion has beendeclared for 2014. The event, this yearhosted by the Real Estate Institute ofNew Zealand, was a hotly contestedfight reminiscent of the recent game ofRuby Union’s Bledisloe Cup. The threeAustralian contenders put up a toughfight but were nipped at the post byAndrew North from New Zealand,which enabled New Zealand to winits fourth consecutive championship.REIA would like to congratulate thewinner, Andrew North, who also wonthe NZ Real Estate Auctioneer ofthe Year title in 2013 as well as allthe finalists:• Daniel Coulson New Zealand (REINZ)• Harry Li Victoria (REIV)• Justin Nickerson Queensland (REIQ)• Jason Andrew Queensland (REIQ)»»article continues
3 54 63 Traditional Maori singers highlighted NZ’s strong cultural heritage4 Previous winners of the coveted trophy5 REIA President, Peter Bushby receives a traditional Maori welcome6 Chief Judge, John Abbott presided over the competition, which was very tightThe annual event tests the topauctioneers on their knowledge of bestpractice and legislation as well as theirperformance in a simulated auctionsituation that includes complex biddingsequences and testing questions.The competitors were judged on theirability to sell a multi-million-dollarhouse at auction. But to enhancecompetition, contestants couldn’tsee how each other performed.Andrew says this is his fourthAustralasian AuctioneeringChampionship final, and going intothis competition he did everythingin his power to be prepared.“I met with some of our Harcourtsauctioneers once a week andpractised new techniques, biddingsequences and tweaked my wholeperformance with them. I knewgoing into the competition I haddone everything possible. To win feelsamazing. Four times at the final, andfinally a win. It’s a monkey off my back.”REIA strongly believes in the valueof auctions in providing an importantalternative option for sellers andbuyers alike to private sales withthese championships encouragingprofessionalism and skill in theart of conducting an auction.
Approved insurance broker ofReal Estate Institute of AustraliaReceive a$200 discountfor buying yourProfessionalIndemnity online *Improved features:› Quote online in less than 5 minutes› 2 FREE hours of legal advice forprofession-related matters› No forms at renewalSame exceptional service & cover.Buy online now ›aon.com.au/reia1300 734 firstname.lastname@example.org*Offer available until 31 December 2014© 2014 Aon Risk Services Australia Pty Limited ABN 17 000 434 720 AFSL No. 241141The information contained in this advertisement about Aon Risk Services products is general in nature and should not berelied upon as advice (personal or otherwise) because your personal needs, objectives and financial situation have not beenconsidered. So before deciding whether a particular Aon Risk Services product is right for you, please consider the relevantPDS or contact us to receive a copy of the PDS and to speak to an advisor.AFF0391 0714
Robyn WatersFIABCI Word PresidentFIABCIAUSTRALIAREPORTFIABCI was one of the severalorganisations representingproperty and related professionalservices from around the world ata meeting at the United Nationsheadquarters in New York recentlyto establish the International EthicsStandards Coalition (IESC).The Coalition, which is made up ofleading professional bodies fromAsia, Europe, Oceania, North andSouth America aims to develop andimplement the first industry-wideethics standards for property andrelated professional services.Member organisations of the coalition,many of which already have theirown codes of conduct focusing onthings like trustworthiness, integrityand respect, will seek to alignfundamental ethics principles throughthe new international standard. Theultimate goal is that professionalswill undertake their work in anethically consistent way, regardless ofwhere in the world they are locatedand the nature of their work.The Coalition is hopeful that the newInternational Ethics Standard will beready in early 2016, following whichthe member bodies of the Coalitionwill implement it through their owntraining and guidance to professionals.“Over the last quarter century,the property market has becometruly global covering all aspectsof commercial and residentialdevelopment as well as institutionalinvestment. Numerous ethical codesalready exist with common principlespromoting integrity, transparency,trustworthiness and professionalcompetence. However, up to now therehas been no united voice or single,clear set of fundamental standardsapplied worldwide,” said FIABCIWorld President, Robyn Waters.“The new Coalition has the potentialto transform the public perceptionof the entire real estate industryby creating and implementinginternational standards of ethicalconduct. This, in turn, will help toenhance confidence and stabilityin the global market place, leadingto improved ratings for property asan asset class,” Ms Waters added.The Coalition hopes that theintroduction of clear and transparentinternational ethics standardswill improve professional servicesand promote stable propertymarkets around the world.The ethics principles set out inthe standard will be drafted andpublished for public consultation by anindependent group of experts, whichwill be appointed by the Coalitionearly next year. The expert group willrepresent both the diverse nature ofprofessional practice as well as theinternational scope of the project.Robyn WatersWORLD PRESIDENT • FIABCI
INDUSTRY UPDATEIndustry news from around AustraliaDwelling approvals flatThe latest figures from the AustralianBureau of Statistics show buildingapprovals were flat in September 2014,in trend terms, holding steady for thelast two months. Approvals of housedwellings have been declining slowly intrend terms for the last 6 months. Dwellingapprovals increased in September inthe Australian Capital Territory (4.0 percent), South Australia (1.3 per cent),Western Australia (0.9 per cent) andQueensland (0.7 per cent), but decreasedin Tasmania (5.1 per cent), the NorthernTerritory (1.7 per cent), New South Wales(1.0 per cent) and Victoria (0.6 per cent)in trend terms. Further informationis available at www.abs.gov.auAussies paying off theirmortgage fasterNew research from REST Industry Superfund shows property debt appearsto dominate the financial priorities ofAustralians in their 30s and 40s. As partof the survey, 1000 Australians wereasked about the state of their currentfinances, what their financial prioritiesare, how they are managing debt levelsand how they are planning on fundingretirement. The results show that for thosecurrently paying off a mortgage (71 percent of respondents), paying this debtoff is their number one priority when itcomes to financial priorities. Long-termsavings, including for retirement, is onlytheir fourth priority, after paying offpersonal debts and short-term savings.For those with no mortgage, short-termsavings, for things such as holidays andeducation costs came out on top. Onlythose that own their own home outright(8 per cent of respondents) prioritiseretirement saving as their most importantfinancial goal. “Focusing on paying offthe house means that over half (51 percent) of Australians are relying solely onthe compulsory super system to save fortheir retirement – at the very stage oflife when they are likely to be in the bestposition to make additional contributionson top of what their employer is paying,”REST Super CEO, Damian Hill said.Property Council surveyfor developersPlanning has been identified as a topfive issue for the property industry withhousing starts reaching record levelsof 181,000 per annum. There is nowa window of opportunity to strive fora national approach to developmentassessment reform. Those working indevelopment assessment can help bycompleting a ten-minute survey that willhelp us gauge each State’s performancemore accurately. The survey findings willsupport the third DevelopmentAssessment Report Card. It will rank eachjurisdiction according to recent reformsit has undertaken as well as those it plansto undertake, and will provide a freshappraisal of how each system performed.The Report Card is recognised as animportant benchmark report on progresstowards improved planning practicesacross the country. Please click here tocomplete the survey now. iPads and $200Dan Murphys gift vouchers are up for grabs.The survey closes Friday 14 November.New CEO for MFAAThe Mortgage and Finance Associationof Australia has announced that its newCEO will be Siobhan Hayden, formerpartner at Finware Australia. Having beenat Finware Australia for the past eightyears, Siobhan brings much knowledgeof the mortgage broking industry, aswell as expertise in HR and managementgained in roles with Woolworths andGuinness. Her formal education includesan MBA from the Macquarie GraduateSchool of Management, a Diploma inProject Management, and a Bachelorof Commerce, Human ResourceManagement and Industrial Relations.New CEO for FSCSally Loane has been appointed CEO ofthe Financial Services Council effective 8December. She replaces John Brogden whowill assume the role of CEO of the AICD inJanuary 2015. Sally was a broadcaster andjournalist before entering the corporatesector. For the past eight years she hasbeen director of media and public affairsfor top 50 ASX Listed company, Coca-Cola Amatil. Greg Cooper, FSC chairman,said: Sally brings a strong background inmedia and corporate reputation to theFSC. Her skills and experience will becritical as financial services moves froman era of the most significant changes inregulation and legislation in its historyto its next phase of being an exportand growth industry for Australia.
MAKING NEWSGeneral national newsASIC permanently bansSA finance brokerASIC has permanently banned formerfinance broker, Malcolm Royce Jones, fromproviding financial services and engagingin credit activity after he was convicted ofserious fraud offences. In November 2013,Mr Jones pleaded guilty and was convictedin the District Court of South Australiaof one count of aggravated deceptionand one count of aggravated dishonestlydealing with a document. The offencesinvolved Mr Jones forging a memorandumof mortgage, which he used to defraud$170,000 from an investor. Mr Jones wassentenced to imprisonment for two yearsand five months, with a 15 month nonparoleperiod, on 10 September 2014.How diverse is your workplace?Cultural diversity in the workplace canimprove employee commitment, teamperformance and increase marketshare and customer satisfaction. TheWorkplace Cultural Diversity Tool helpsemployers to measure their workplaceagainst best practice standards, managediversity, plan business developmentand chart progress over time.For more information visitwww.culturaldiversity.humanrights.gov.au or email email@example.comPIN @ the Point Of SaleOn 1 August this year, signatures for creditcard transactions began to be phased outand the ability to sign is now almost atan end. Financial institution data showsthat over 95% of Australians are nowusing PIN at the point of purchase. Assoftware upgrades continue to roll out,this will very shortly become 100%.However, signatures are still allowedin some limited circumstances:• Cards without an embedded chip• Cards from outside of Australia• Signature-preferred cards for peoplewith a genuine need to sign.Contactless transactions up to $100do not require a PIN or signature. Formore information visitwww.pinwise.com.au/merchant.htmlBusiness confidence still weakThe latest Australian Chamber ofCommerce and Industry (ACCI) BusinessExpectations Survey shows that businessesare worried about the prospects for theAustralian economy over the Christmasholiday period. Even though upwardtrends are emerging for businesses withregard to their own performance, theimprovement is muted. More worryingly,business expectations for the future havecome off during the September quarterand worse, business expectations for thebroader economy over the next 12 monthshave also fallen. With trading conditionshaving been generally depressed for aconsiderable period of time, ACCI believethe upward trends will need to continuefor a while yet before business confidenceabout the economy turns the corner.Identity theft on the riseA new report from the CommonwealthGovernment shows identity crime hasbecome one of the most common, costlyand disturbing crimes affecting ournation. The report estimates that thetotal economic impact of identity crimeto the Australian economy is likely toexceed $1.6 billion each year, althoughthe true financial impacts are unknown,as a considerable proportion of incidentsgo unreported. This includes direct coststo Australia’s law enforcement agenciesand criminal courts associated withinvestigating and prosecuting identitycrimes of approximately $76 million. Ofconcern is that, the use of fraudulentidentities continues to be a key enabler ofserious and organised crime and terrorism.Stand up!Most workers spend around six hourssitting every day. Now that's some seriousdown time. Standing up for just twohours a day increases energy, reducesstress, improves posture and circulation,and burns 50% more calories than sittingdown. Research has even shown thatit decreases body discomfort by 62%.For more info about the benefits ofstanding versus siting, please click here.
POLITICAL WATCHInformation and news from governmentChanges to ABSLending Finance DataThe ABS is reviewing the usage of someLending Finance tables, with the aim ofimproving the relevance of data releasedand minimising the reporting load placedon businesses. As part of this review,the ABS is seeking user feedback on thepossible removal from future releases of38 current time series spreadsheets onthe downloads tab of the ABS website.The list of tables is shown at ProposedRemoval of Tables. If you have anyfeedback on the possible removal ofthese tables, please email firstname.lastname@example.org or phone the Financial StatisticsSection in Sydney (02) 9268 4186.NSW Fair Trading to target agentsUnderquoting estate agents will betargeted by the NSW Department of FairTrading, if the Liberal Government is reelectednext year, according to the FairTrading minister Matthew Mason-Cox.Mr Mason-Cox confirmed that shouldthe coalition win the state election nextyear, he expects the department to bere-armed with enough firepower tohit rogue business operators, such asunderquoting estate agents, with the fullweight of the law. Mr Mason-Cox hadbeen quoted a price on a Sydney unitpreviously, only for him to discover it soldfor 25 per cent more a few days later.457 Visa Report releasedThe Independent Review Panel’s Reportinto the 457 visa skilled immigrationprogram was recently released bySenator Michaelia Cash, AssistantMinister for Immigration. The reportwas welcomed by the building andconstruction industry. “The Report’sfindings and recommendations willposition the Government to achievea more balanced 457 program to helpunlock investment in the constructionindustry, enhances productivity andcreates more jobs for skilled Australianworkers,” Wilhelm Harnisch CEO ofMaster Builders Australia said. “MasterBuilders welcomes the Report’s findingthat there is no systematic rorting of the457 visa program by employers,” he said.New smartphone app to helpWA tenantsWestern Australian tenants will be ableto manage their tenancy at the click of abutton thanks to a new smartphone applaunched today by the WA Government.Commerce Minister Michael Mischin saidthe free app would help tenants easilycalculate the maximum amount they mighthave to pay a landlord before movingin and save photos of the mandatoryproperty condition reports, rental receiptsand items that needed repair. “The appwill set reminders for paying rent, routineinspections and giving proper noticebefore moving out,” Mr Mischin said.Responsible lending guidelines releasedASIC has updated its guidance for creditlicensees on their responsible lendingobligations.The updated guidance reflects a recentFederal Court decision that is relevant to allcredit licensees regarding their responsiblelending obligations. The Federal Court’sdecision makes it clear credit licensees must,at a minimum, inquire about the consumer’scurrent income and living expenses to complywith the responsible lending obligations.Further inquiries may be needed dependingon the circumstances of the particularconsumer.The Australian Prudential Regulation Authority(APRA) has today also released final guidancefor authorised deposit-taking institutionson sound risk management practices forresidential mortgage lending. This guide canbe found on its website at www.apra.gov.au.WA’s search for new airport sitesThe Western Australian Government hascalled in the private sector to help identifypotential sites for two new airports for Perth.Consultants are expected to take nine monthsto report back to the Government and willfocus their search in the Perth metropolitanand Peel regions and look at areas as farnorth as Moore River, as far east as the Shireof Brookton and as far south as the Shireof Waroona. Tender documents reveal theDepartment of Planning wants help to identifypotential sites for a new airport to handledomestic and international services, andalso a general aviation airport like Jandakot,which typically provides services for charters,pilot training and recreational flying.
THE WORLDProperty news from around the worldCanadian first home buyersshut out of marketRising housing costs and tighter lendingrates in Canada have locked many firsttimehomebuyers out of the market.A recent Canadian Imperial Bank ofCommerce (CIBC) report showed that thehome ownership rate among first-timehomebuyers (age 25 to 35) fell from 55% in2012 to the current 50%, reports Canada’sFinancial Post. A Bank of Montreal reportreleased in March found six in ten wouldbehomeowners delaying their purchase,with 39% citing rising real estate prices asthe main reason for delay. The majority(61%) say they have made cutbacks in theirlifestyle to save and 30% are looking tofamily to assist with the purchase.The Canadian government offers aHome Buyers’ Plan (HBP) to assist firsttimebuyers. Under the HBP, individualscan withdraw money from theirretirement plan to help purchase orbuild a qualifying first home. A portionof the withdrawn amount must be paidback annually, with the full amountto be repaid within 15 years.The HBP’s withdrawal limit is $25,000.With inflation, the plan’s buying power haseroded, reducing the ability of Canadiansto afford their first home. In response, theCanadian Real Estate Association (CREA)has proposed that the federal governmentindex the HBP to the Consumer PriceIndex in $2,500 increments to ensurefirst-time homebuyers never lose theirpurchasing power. CREA argues there isno cost to the government until 2015, atwhich point the cost would be minimal.My house, my life – BrazilBrazil has announced the addition of350,000 housing units in 2015 for Phase 2of My House, My Life affordable housingprogram. The government plans to build200,000 housing units by the end ofthis year and an additional 150,000 inthe first six months of 2015, to reachtheir goal of 3.1 million homes for thehousing initiative. My House, My Lifewas created in 2009 as a way to keep theeconomy rolling amid a global slowdown.It relies on private-sector companies todevelop subsidized homes. According toa recent report by the Ministry of Cities,Brazil is facing a shortage of at least fivemillion homes. The housing shortage isevident in the rental market as well. Ofthe available properties in the markettoday, 15% are rentals, falling short of the35% of the public interested in rentals.US home market shows earlybut promising signs of growthAccording to the National Associationof Realtors (NAR), pending home salesslightly rose in September and are nowabove year-over-year levels for the firsttime in 11 months. The Pending HomeSales Index, a forward-looking indicatorbased on contract signings, inched 0.3 percent to 105.0 in September from 104.7in August, and is now 1.0 per cent higherthan September 2013 (104.0). The index isabove 100 for the fifth consecutive monthand is at the second-highest level sincelast August. NAR says moderating pricegrowth and sustained inventory levels arekeeping conditions favourable for buyers.Housing supply for existing homes was upin September 6 per cent from a year ago,which is preventing prices from rising atthe accelerated clip seen earlier this year.Additionally, the current spectacularly lowmortgage rates should help more buyersreach the market. Despite improvedhousing conditions and low interestrates, tight credit conditions continueto be a barrier for some buyers. Of thereasons for not closing a sale, about 15 percent of Realtors in September reportedhaving clients who could not obtainfinancing as the reason for not closing.Rent rise in the UKRents in the UK have continued to increasesteadily throughout the year with theaverage rent in the third quarter of 2014reaching £903 per calendar month,according to the latest index. This is anincrease of £21 per calendar month, upfrom £882 per calendar month in thesecond quarter of 2014. In September, theaverage UK rent increased to its highestlevel for 32 months to £916 per calendarmonth, a growth of 5.2% year on year.All regions saw a year on year increasein rents apart from the Midlands, whichsaw no increase in the third quarterof 2014 while Greater London saw thegreatest increase, up 9.8% on the thirdquarter of 2013, followed by the East ofEngland which saw an increase of 7.3%.
REIANEWSIS A PUBLICATION BROUGHT TO YOU BY THEREAL ESTATE INSTITUTE OF AUSTRALIA. FORFURTHER INFORMATION ABOUT ADVERTISING,PLEASE CONTACT REIA MANAGERCOMMUNICATIONS ON 02 6282 4277 OR ATZOE.DAVIES@REIA.COM.AU16 THESIGER COURT, DEAKIN ACT 260002 6282 4277 I WWW.REIA.COM.AU