National Licensing for the Real Estate Industry is not going to proceed

The Council of Australian Governments (COAG) held its 36th meeting today in Canberra and it would appear as though National Licensing for our industry will not be proceeding.

In the Communique from the meeting it was stated:

“COAG noted that, following the outcome of extensive State-based consultation, the majority of States decided not to pursue the proposed National Occupational Licensing Scheme (NOLS) reform. Most jurisdictions identified a number of concerns with the proposed NOLS model and potential costs. States instead decided to investigate approaches that would increase labour mobility and deliver net benefits for businesses and governments.”

” To this end, States agreed to work together via the Council for the Australian Federation (CAF) to develop alternative options for minimising licensing impediments to improving labour mobility and to manage the orderly disestablishment of the National Occupation Licensing Authority from early 2014.”

While EAC was in favour of National Licensing, we had stated that in the proposed form we did not believe it was in the best interest of the industry or consumers. We can now look forward to maintaining the educational standards and professionalism of the real estate occupations.

NSW HOMEBUYERS UNDER THREAT FROM PROPOSED CHANGES TO REAL ESTATE INDUSTRY

NSW homebuyers and property investors are most at risk from proposed changes to lower current industry standards, as suggested by the National Occupational Licensing Authority (NOLA) in its Decision Regulation Impact Statement – Proposal for National Licensing for Property Occupations (DRIS), the Real Estate Institute of Australia (REIA) reveals in its official response to Government.

The proposal to reduce or remove the education and Continuing Professional Development (CPD) requirements for real estate agents will put consumers at greater risk from inadequately trained and under-qualified real estate agents.

Under the new proposal, consumers in NSW would lose the assurance offered by mandatory CPD – an ongoing education requirement that is designed to increase the knowledge and skills of those working in the real estate industry and ensure high professional standards are maintained.

“The proposal fails to take into account the importance of consumer protection and the integral role played by Continuing Professional Development in our ever changing industry.

“Buying a property is the biggest investment people make, and this should be undertaken only with the assistance of a fully qualified and knowledgeable agent.

Mandatory CPD was introduced in Western Australia in 2007 for licensees and in 2009 for sales representatives. As a result, the average number of written concerns or complaints raised by the public to the REIA of Western Australia dropped from 196 in 2009 to 58 in 2010, representing a 70% reduction.

A full copy of the Real Estate Institute of Australia’s official response to the DRIS proposal can be downloaded at www.reia.com.au

Genworth Homebuyer Confidence Index – July 2013

Homebuyer confidence rebounded significantly in Australia over the past quarter on the back of improved consumer expectations of mortgage stress, according to the new Streets Ahead Genworth Homebuyer Confidence Index (Index).

Based on a survey of 2,124 mortgage holders and 416 non-mortgage holders, homebuyer sentiments were measured using five components: the proportion of monthly income currently used to service debts, maximum loan to value ratio comfortable in borrowing, last 12 months repayment history, next 12 months repayment ability and whether it is a good time to buy a home.

The Index jumped from a record low of 93.4 in March 2013 to 100.1 at the end of July 2013 and indicated significant improvement in homeowners’ perceived ability to repay. The proportion of homeowners who expected financial hardship decreased over three months to July from 27% to 17%, and more than half were expecting to overpay.

First home buyers’ confidence also increased, up to 99.9 from 85.9 in March. Of first home buyers surveyed, 86% expected to be able to easily meet or overpay their mortgage repayments. The figure was markedly higher than its March 2013 level of 59%.

According to the Index, concerns over the federal election have been rising over the last six months, with the proportion of homeowners concerned how the election would impact them at 46% compared to 44% in March 2013 and 36% in December 2012.

The report found that over a third (37%) of surveyed prospective first home buyers believed a change of government would improve their ability to buy property, compared to 23% who believed a change would worsen it.

The importance of assistance to first home buyers from the government was noted with two in five of those surveyed reporting they would enter the market earlier if changes were introduced to further help first home buyers. The majority of prospective first home buyers (63%) agreed that the government should be doing more to help them afford a home.

Overall, housing affordability and the difficulty to save a deposit were the biggest barriers to home ownership among prospective first home buyers. According to the report, four in five surveyed non-property owners said they were unable to raise a 20% deposit for a $500,000 house. Unemployment was a major concern (47%) followed by rising cost of living (38%). A quarter of surveyed prospective first home buyers have not yet bought a property because they have not secured enough money for a deposit, while around one
in three reported they would enter the market earlier if they could secure enough money for a deposit, or did not need to save a deposit (34%).

Despite the increase illustrated in the Genworth Homebuyer Confidence Index, the report found that 70 per cent of non-property owners and 65% of current homeowners considered the Australian dream of home ownership unrealistic.

Source: REIA News – August 2013

NSW Auctioneers take their place once again in the Australasian Championships

The Australasian Real Estate Institutes’ Auctioneering Championships, representing the most professional and skilled auctioneers that Australia and New Zealand have to offer held its New South Wales heat at the Novotel Hotel Sydney Olympic Park today.

The NSW Heat was contested by fifteen of the state’s leading Auctioneers all competing to progress onto the National championships to join contestants from around Australia & New Zealand at the final event which is being held at Crown Perth on the 23rd-25th of September.

One of the judges today Scott Kennedy-Green was the last NSW contestant to take out the Australasian Championships in 2006. Estate Agents Co-operative Ltd Vice Chairman Peter Carmont said “It is about time that NSW took the title again and we look forward to our winner and runner up taking it up to New Zealand which has won the title four times in the last five years.”

The Real Estate Institute of Australia and Estate Agents Co-operative Ltd, the hosts of the NSW heats,  are proud to announce the Winner for the NSW heat is Gavin Croft from Bresic Whitney Estate Agents and would like to congratulate Gavin on his performance.

Gavin has 12 years in experience in real estate and is currently the sales manager and auctioneer for the Darlinghurst and Glebe offices.

We are also proud to announce and would like to congratulate Edward Riley also from Bresic Whitney Estate Agents who is the Runner Up in today’s heat.

Both Gavin and Edward will be going through to the finals to be held in Perth where they will compete against auctioneers from the other states and New Zealand.

Special mention should also go to Nick Boyd for his very strong and capable performance in the heat.

We would like to thank all the contestants for participating in this year’s heats of the 2013 Australasian Real Estate Institutes’ Auctioneering Championships. The other contestants included:

Stewart Kirkby – LJ Hooker Lane Cove
Vic Lorusso – Vic Lorusso
Matthew Harvey – First National Real Estate
Michael McCaffery – First National Real Estate
David Cale – Cale Property Agents
Thomas McGlynn – McGrath Estate Agents
Paul Millett – Cooley Auctions
Andrew Cooley –  Cooley Auctions
Andrew Coulson – Think Real Estate
Brian Cannan – Think Real Estate
Will Hampson – My Auctioneer
Kate Lumby – My Auctioneer
Nick Boyd – Think Real Estate

We would like to thank the Judges Scott Kennedy-Green, Stephen Pratt, Brett Roenfeldt, Chris Mourd and Amanda Lynch.

David Crombie, Chief Executive Officer of Estate Agents Co-operative Ltd would like to thank our Major Event Sponsor OAMPS Insurance Brokers and our Event Sponsors My Desktop, Realty Print and iVisual for their support which allowed us to hold a successful and professionally run event.

2013 Australasian Real Estate Institutes’ Auctioneering Championships

The New South Wales heat of the 2013 Australasian Real Estate Institutes’ Auctioneering Championships hosted by Estate Agents Co-operative Ltd & Real Estate Institute of Australia is being held at the Novotel Sydney Olympic Park on the 25th June 2013.

The New South Wales competition will see two of the State’s top auctioneer’s progress onto the National championship to join contestants from around Australia & New Zealand at the final event which is being held at Crown Perth on the 23rd-25th of September.

This competition will test the auctioneers’ aptitude, attention and ability to think on their feet. To be successful, competitors have to deal with a range of testing questions and unpredictable bids judged by some of the industry’s leading auctioneer professionals.

The NSW Heat Judging Panel includes:

Scott Kennedy-Green – Chief Auctioneer of McGrath Estate Agents
Chris Mourd – Head of Network for LJ Hooker Group
Stephen Pratt – One of Sydney’s leading Auctioneers
Neil Laws – Fellow of the Real Estate Institute of Australia
Brett Roenfeldt OAM – 4 times News Australia SA~BankSA Golden Gavel Winner

For more information on our Judges and to view the Official Guidelines and Entry Form please click here.

NSW Auctioneering Championships Sponsors

Proposed real estate licensing reforms put consumers at risk: Amanda Lynch

Whenever large sums of money change hands, the prospect of fraud increases. Real estate and rural agents handle very large sums of money in the form of deposits on properties for sale. Up to $2 billion is held by agents as deposits in trust at any one time.

And yes, some of it goes astray. It is usually ordinary people’s money. Or money from small businesses.

Over the past year NSW Fair Trading has been cracking down on unlicensed and unprofessional agents and found some major fraud cases, resulting in fines and imprisonment. Rent, deposits and purchase proceeds were spirited away. The bulk of agents, of course, behave properly. But with the amount of money being handled you would think regulatory authorities would want to keep the reins tight.

Not so. The National Occupational Licensing Authority is pushing ahead with its aims to introduce uniform occupational and professional licensing in the property occupations as well as the electrical, plumbing and gas fitting and refrigeration and air-conditioning occupations.

It is part of an agenda being pushed by the Council of Australian Governments for more deregulation and uniform national standards. NOLA put out regulatory impact statements on the occupations in July and August last year calling for submissions.

They flowed in – more than 3500 of them. Of those, more than 800 were from the property occupations.

The vast majority from the property industry expressed concern verging on alarm. Earlier this month the NSW Greens also expressed concerns. A Greens MLC John Kaye has a notice of motion before the NSW Upper House for a committee inquiry as to whether consumers will be adequately protected.

Essentially, very few people have any difficulty with a national licensing system for real estate agents, but not at the cost of consumer protection. Many of the submissions, including that of the Real Estate Institute of Australia, are worried that in pursuit of a national system NOLA will adopt the lowest educational and training standard applicable in the states and territories now, and apply that nationally. Worse, it proposes to abolish requirements for continuing professional development and to abolish the requirement for a person to be qualified in any way to act as an agent in a commercial property transaction.

One of the NSW Fair Trading prosecutions was about $265,000 in commercial rent taken by an agent.

The trouble is that if you lower standards, cowboys come in and consumers suffer.

We saw this very clearly in the financial services industry after deregulation. After debacles in the 1990s, government had to revisit regulation to straighten things out and even then did not get it right and consumers suffered again in the mid-2000s. It has become all too obvious that the market alone is not safeguard enough.

Deregulation and national standards should not be introduced for their own sake, but only when both economic benefits and social safeguards are present.

Over the past couple of decades, a lot of needless regulation and duplication has been removed by getting state and territory governments to agree to national standards.

Much of this has been applauded by industry and has generated substantial economic benefits by increasing competition and reducing compliance costs.

But experience has shown that this has to be tempered with a need to protect consumers.

NOLA has quite rightly engaged in a consultation process over the past six months. The important thing now is for NOLA and COAG to take notice of what the property industry is saying.

Too often theoretical economists pay too much attention to the economic gains of deregulation (often calculated in a very simplistic way) and not enough attention to the risks and social costs.

They dismiss industry opposition to deregulation as a self-serving desire to restrict entry disguised as concern for consumers. But even the most radical neo-liberal economist would agree that many occupations require certification of skills before practitioners are let loose on consumers. There is a balance here, and the Real Estate Institute of Australia says the proposals in the NOLA regulatory impact statement have not got the balance right. They pose great financial danger to consumers which is not outweighed by the economic benefits.

The occupation of real estate agent, on one hand, is qualitatively different from those in the electrical, plumbing and refrigeration trades, on the other. In the latter occupations, public protection is secured purely by ensuring technical competency.

The real-estate occupations go beyond that. Agents are required to hold large amounts of clients’ money in trust and they deal in property worth substantial amounts. There is not only a high level of technical skill required, but also a high level of trust.

Moreover, consumers are often entrusting agents to deal with their most valuable asset. Most consumers buying or selling property do so very infrequently and therefore need to turn to people who they can trust and who have the requisite level of skill.

The regulatory impact statement should not be recommending the lowest state and territory standard as the new national standard (with automatic mutual recognition), but rather adopt the Diploma of Property Services and a personal probity test as the minimum requirements.

Further, the law and practice of property sales changes from time to time. This means that NOLA’s proposal to abolish Continuing Practice Development requirements would put consumers to further risk. It is far better to educate real estate agents at the start about the right way to do things rather than to track down and deal with agents who have hurt consumers after the event.

NOLA’s other proposal to abolish the requirement for qualified agents in the case of commercial property is utterly misguided and displays a lack of understanding of the nature of the commercial property market.

The vast majority of commercial property deals in Australia (70%) involve less than $1 million and usually involve small business people. The idea that all commercial property deals are in a business environment among big, fairly equal entities not requiring consumer protection is wrong.

The economic rationalists have exaggerated the gains and ignored the costs. One of the gains – mobility of agents between states – is not pressing. Geography determines that the vast bulk of agents work in one jurisdiction.

REIA agrees with the aim of national occupational standards for the real-estate industry, but not this model. It would be better to wait and get it right, than crash ahead, cause untold consumer grief, only to have to revisit regulation down the track.

Amanda Lynch is CEO of Real Estate Institute of Australia.

Government Action Required on Housing Affordability

A new report by the National Housing Supply Council clearly identifies the need for a concerted approach by Governments to address housing affordability, particularly for first home buyers, according to the Real Estate Institute of Australia (REIA).

“The Housing Supply and Affordability Issues 2012–13 report shows that it now seems certain the aggregate rate of home ownership in Australia will drop from around the rate of 70 per cent that it has been for the last three decades,” says REIA President, Peter Bushby.

“Affordability is identified as the main reason for this change.”

“Exacerbating the difficulty for first home buyers is that during 2012, the Governments of Queensland, New South Wales and South Australia announced that they would only provide the First Home Owner Grant (FHOG) to purchasers of new property and not to those buying established housing.”

“The actions of the state governments ignore the evidence that first home buyers have a clear preference for established houses. Only 18 per cent of Australian first home buyers are buying new homes with 82 per cent purchasing established dwellings,” says Mr Bushby.

“In its Pre Budget Submission, REIA has urged the Government to address the plight of first home buyers.”

“As part of a package of measures to address the affordability problem, REIA proposes that the Commonwealth Government should establish a scheme to encourage young Australians to contribute to voluntary superannuation by allowing access to these resources for the purposes of raising a deposit for a first home.” “A good example of how this can work is provided by a Singapore where home ownership is at 87.2 per cent.”

“The issue of first home buyers and affordability is a major issue for both sides of politics to address in this election year,” concluded Mr Bushby.

Source: Real Estate Institute of Australia Media Release 4 March 2013

Estate Agents Co-operative Ltd is an Affiliate Member of the REIA.

 

Estate Agents Co-operative Ltd Joins Real Estate Institute of Australia Affiliate Council

The Estate Agents Co-operative Ltd (EAC) today announced its appointment to the Real Estate Institute of Australia’s (REIA) Affiliate Council to benefit from what REIA currently offers its members.

As an REIA Affiliate Council member EAC will have alignment with the leading industry association for Australia’s real estate profession, benefitting from REIA’s advocacy on their behalf and through their strong relationship with national media. Another role of the REIA Affiliate Council is to have participation in ongoing discussions and updates on issues and submissions REIA prepares.    

“EAC is pleased to be associated with the national institute for the real estate profession and looks forward to working with the REIA and other affiliate members to ensure that the interests of EAC Members and practitioners in NSW are protected”, commented Dale Whittaker, EAC Chairman. “We are actively working with government bodies at a state level and the Board of EAC recognises the importance of having representation at a national level, as we face issues such as the introduction of national licencing”.

REIA CEO, Ms Amanda Lynch and President, Mr Peter Bushby presided over the Affiliate Council meeting on Monday, 25th February, with senior representatives of the real estate networks including David Crombie, EAC Chief Executive Officer. The agenda included the industry’s opposition to diluting standards with national licencing, tax reform, a fair and consistent approach to buyers of established with the first home owner grant and the need for national tenancy laws.

Estate Agents Co-operative Ltd

About Estate Agents Co-operative Ltd
Estate Agents Co-operative Limited (EAC) began as a co-operative of real estate agents first formed in 1960. We are known in the marketplace for Membership Services, Agency Practice Support, Red Square, Real Estate Forms and more recently the realestateworld.com.au Property Portal and supporting Publications.

EAC is now a premium technology based service provider to the real estate and property industry, providing a range of services to over 2,000 real estate professionals, comprising of independent agencies, valuers, Government departments and franchise offices from all the major groups.

REIA

 

 

 

 

About REIA
The Real Estate Institute of Australia (REIA) is the national association for Australia’s real estate profession. REIA is a politically non-aligned organisation that provides research and well-informed advice to the Federal Government, Opposition, members of the real estate profession, media and the public on a range of issues affecting the property market.