Real reform for the real estate sector’s future
Date: 8 Jun 22
Opinion Piece by Quentin Kilian, REIV CEO
Published in the Herald Sun on Wednesday 8 June 2022
With another interest rate rise confirmed, it’s difficult to escape discussion on what it will mean for housing affordability and property market dynamics. At REIV, we don't anticipate it to make a significant difference to real estate in Victoria, certainly no more than typical market fluctuations that come from usual seasonal trends and supply and demand forces.
Meantime, however, a much less talked-about - but arguably more important - industry matter is upon the sector. The Victorian Government's Property Market Review is set for release, with an independent panel’s assessment of property market regulation intended to guide future regulation.
The panel’s report was submitted to Consumer Affairs Victoria on 30 April, following an industry and consumer consultation phase.
On behalf of more than 2000 Victorian real estate businesses and another 6000 individual members, the Real Estate Institute of Victoria (REIV) was quick submit to the Property Market Review, seeing it as an opportunity to effect better sector public policy and regulation.
Front-and-centre in the REIV’s 24-recommendation submission were calls to ensure efficient, informed, and transparent residential property transactions, a fairer housing market, and better pricing transparency for both buyers and sellers in every market condition.
This includes vendors, buyers and estate agents needing access to real time information, such as disclosure of all sale prices, confidence that the person bidding for your property is a valid buyer with bidder registration and identity verification when signing a contract, and mandatory contiuous professional development for real estate professionals.
The Property Market Review brought into question whether earlier reforms to the Estate Agent’s Act to address ‘underquoting’ needed to be enhanced in light of current market conditions. But as is evident in the continuous release of REIV data, the market is in a constant state of flux.
The market and its legislators have always been focused on ‘underquoting’ rather than ‘evidence-based quoting’. Whether a market is rising or falling, the emphasis should always be on ensuring that appropriate market evidence is being used to arrive at an estimated price.
Market forces, such as interest rates, demand, supply and consumer confidence, all play a role in property prices - aspects that all stakeholders, vendors, buyers and agents should understand and work with.
There’s a theme running through the Property Market Review’s Terms of Reference that more legislation is required to address any issues in the market. What the sector actually needs is well-trained and supported agents, transparency of process and better implementation and oversight of the regulations that already exist.
Adding more regulation is not the answer when existing rules and requirements have not been supported with adequate control or funding.
Recent announcements from all sides and levels of politics to support first home buyers is welcomed, but it is not enough – Victorians need more and the state needs to focus on being attractive to non-Victorian investors. The heavy tax burden on the property market should be acknowledged and addressed if we are to truly address affordabilty.
Many of the sector’s issues could be addressed if a long term strategic approach was taken to how the industry is governed and how those in the industry are supported, not just regulated by government.
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