Reianews Issue 87: May 2019

REIANEWS ISSUE 87: MAY 2019

FEDERAL ELECTION 2019

IN THIS ISSUE

FEDERAL ELECTION 2019

FACT SHEETS FOR FOREIGN INVESTORS OF AUSTRALIAN RESIDENTIAL REAL ESTATE

AUSTRALIAN WOMEN’S LEADERSHIP SYMPOSIUMS MORE WANT TO FIND OUT ABOUT PROMOTING YOUR BRAND IN REIA NEWS?

CONTACT REIA ON 02 6282 4277 OR AT [email protected] FOR FURTHER INFORMATION. Mr Adrian Kelly REIA President

PRESIDENT’S REPORT

Welcome to the May edition WELCOME of REIA News. FROM REIA’S Coming on the heels of the 2019 PRESIDENT Federal Election this month‘s REIA News features an article on REIA’s campaign during the election. This month’s edition also contains articles for foreign investors in Australian real estate and the Australian Women’s Leadership Symposiums .

Mr Adrian Kelly REIA PRESIDENT

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Last month I wrote to you about the upcoming 2019 Election and the approach REIA was going to take to dispel the myths surrounding negative gearing and pointing out the potential economic impacts of changes to negative gearing arrangements.

At the time I surmised that At the end of the campaign the 2016 To dismiss REIA’s position as one housing affordability and taxation figures were shaded by those for 2019. of vested interest is unfair. As a arrangements for housing were going The response has been excellent with profession we are interested in to be key issues in the upcoming a reach of nearly 11 million or over a strong economy. The property Federal election campaign. That 2 million per week of the campaign. sector is an integral component of certainly was the case. Not a single a strong economy. All Australian REIA was greatly assisted by its day went by without coverage in have a vested interest in a robust state based member Real Estate the media and parliamentarians on economy. Our messaging was Institutes and a number of franchise both sides of Parliament debating based on independent analysis and groups in sharing REIA’s message the issue. The high and consistent to construe that the real estate through their networks and agency level of media coverage, including profession suffers from falling house front page, together with the databases which was instrumental prices or higher rents is misguided, commentary and debate beneath in achieving the results. it is homeowners and renters that the REIA’s daily posts confirmed the Whilst it is impossible to be definitive shoulder hose consequences. importance of the issue of property on the impact of the campaign The REIA was, and continues to taxation as a major election issue it is clear our campaign played be, opposed to the policy but I outlined the social media campaign an influential role in the election we are a political body that does that REIA was going to take of daily outcome. With only 80% of all votes not endorse political parties nor postings of short videos on Facebook, counted at the time of writing, there is oppose political parties. We have Twitter and Instagram and wrote a clear correlation between marginal a duty to champion our policies that in a similar campaign in 2016 electorates with high numbers of which we will continue to do. we reached an average audience investment property owners and a of 120k per week achieving a total higher swing towards the Government reach of almost 1 million people. than the national average. Without doubt, millions of Australians The media have been running were unaware of the proposal to commentary about the role that REIA’s restrict negative gearing and to double campaign played with some even capital gains tax before the election suggesting that it was inappropriate for brokers.adelaidebank.com.au was called, or what the impacts of such us to do so and that we were merely a change could mean for the economy. serving our own vested interests.

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We have recently published two fact sheets to help foreign owners property and investors of Australian residential real estate meet their foreign investment obligations in Australia. and The Vacancy fee return: fact sheet The Australian Government introduced MORE INFORMATION for foreign owners is available the annual Vacancy fee in December For more information about the in English, Chinese traditional 2017 as part of the comprehensive Vacancy fee, visit the ATO website and Chinese simplified. housing affordability plan. It requires income at ato.gov.au/vacancyfee or foreign owners of residential The Residential property investment: watch the live webinar recording dwellings in Australia to lodge an fact sheet for foreign owners is from September on atoTV. annual Vacancy fee return if they: also available in English, Chinese You can also find more information traditional and Chinese simplified. • made a foreign investment application for residential about investing in Australian The fact sheets detail important property after 7.30pm AEST residential real estate in the steps foreign persons must take on 9 May 2017, or Residential property investment: fact * when they own, invest or are Landlord insurance from just $1 a day • purchased under a New Dwelling sheet for foreign owners. The fact planning to invest in Australian Exemption Certificate that a sheet is available in English, Chinese Terri Scheer is Australia’s leading landlord insurance specialist, offering protection for your client’s rental residential real estate, including: developer applied for after traditional and Chinese simplified. property from risks that standard building and contents insurance may not cover. • getting Foreign Investment 7:30pm AEST on 9 May 2017. Review Board (FIRB) approval Vacancy fee returns must be lodged Loss of rent before investing within 30 days of the end of each Malicious and accidental damage by tenants • recording property on the ATO vacancy year. The vacancy year is Theft by tenants Land and water register usually the 12 month period from the Flood, storm and water damage • lodging an annual anniversary of the settlement date. Vacancy fee return. Damage by pets The vacancy year is unique to May be fully tax deductible each dwelling held by a foreign owner. Foreign owners must Call 1800 804 016 or visit terrischeer.com.au lodge a Vacancy fee return for each dwelling on their land.

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*Across Australia, 71% of Terri Scheer customers paid $1 or less a day for their Landlord Insurance Policy. Premium is based on all Terri Scheer Landlord Preferred and Landlord Self-Managed Insurance policies purchased or renewal in the 12 months 01/03/16 to 28/02/17, inclusive of taxes. Conditions and legibility criteria apply. Consult your tax advisor in relation to tax deductibility of premium. Insurance issued by AAI Limited ABN 48 005 297 807 AFSL 230859 trading as Vero Insurance. In arranging your insurance, Terri Scheer Insurance ABN 76 070 874 798 AFSL 218585 acts under authority given to it by Vero Insurance. Read the Product Disclosure Statement before buying this insurance and consider whether it is right for you. Call 1800 804 016 for a copy. Have your glass windows ever been broken? As a real estate agent, running your own agency can be an exciting and rewarding experience, however it’s important to consider the risks that come with it. Ask yourself: • Have you ever lost or damaged your work phone or laptop? • Have you ever had water damage to your premises? • Has a client ever injured themselves at your business premises? Accidents and mistakes can happen, so it’s helpful to have business insurance cover in place to help foot the bill, so you can continue to run your business and reduce financial loss.

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© 2019 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141. The information contained in this communication is general in nature and should not be relied on as advice (personal or otherwise) because your personal needs, objectives and financial situation have not been considered. Before deciding whether a particular product is right for you, please consider your personal circumstances, as well as the relevant Product Disclosure Statement (if applicable) and full policy terms and conditions available from Aon on request. All representations in this communication in relation to the insurance products we arrange are subject to full terms and conditions of the relevant policy. Please contact us if you have any queries.

AFF0727AE 0319 PROTECTING YOUR AGENCY AGAINST THE THREAT OF CYBER RISK

We’ve seen the movies, we’ve read lacked robust security systems, which • Hold educational sessions with your the headlines … We know that has meant real estate agents have been employees, so they are cyber aware hackers are having their moment. prime targets for cybercrime. Real estate and are taking appropriate precautions And they’re damaging businesses agents also have a large quantity of with their hardware and your data across the globe every day. funds that are turned over regularly – a Insuring Against Cybercrime But if you’ve been led to believe that goldmine for criminals – with the added It’s important to put in place prevention it’s only multinational organisations risk of regular mobile phone use. What’s Have your glass strategies, however it’s quite difficult to or billion-dollar magnates who are at more, real estate agents are particularly eliminate your cyber risk altogether. This risk, you can think again. Let’s take vulnerable to ransomware attacks, where a is where insurance can play an invaluable a look at some real-life statistics: criminal will take control of your computer role in helping to protect your business windows ever and demand payment in exchange 60% of small businesses failing to against the impacts of cybercrime. 1 for a return to service. Not only is this recover from a significant breach With Aon’s Cyber Insurance, you’ll be costly, but also problematic – as hackers covered against the expense and legal 43% of cyber-attacks are targeted rarely hold up their end of the deal. been broken? at smaller businesses2 costs associated with data breaches. It goes without saying that the Depending on the level of cover you select, And customers are taking notice. In As a real estate agent, running your own agency can be an exciting and consequences of cybercrimes can be your insurance can protect you against: fact, Unisys Security Index3 – Australia rewarding experience, however it’s important to consider the risks that devastating. And with the introduction of revealed that 85% of Australians would • Restoration of data costs Mandatory Breach Reporting in February come with it. stop dealing with an organisation • Forensic investigation costs 2018, now more than ever, it’s critical you if their data was breached. • Cyber-extortion costs Ask yourself: understand your cyber exposures and how • Have you ever lost or damaged your work phone or laptop? Now let’s be clear – a cyber incident does you can reduce the impact of an attack. • Electronic funds transfer fraud not need to involve complex hacking. It • Fines and penalties • Have you ever had water damage to your premises? can be as simple as having your phone So, What Can you Do? • Damage to third party systems stolen, attaching the wrong file to an • Has a client ever injured themselves at your business premises? There are a range of preventative email, or clicking on a virus link in an email. • Claims arising from security failures Accidents and mistakes can happen, so it’s helpful to have business insurance cover in place to measures you can put into place to begin An incident can result in thousands of • Public relation costs help foot the bill, so you can continue to run your business and reduce financial loss. protecting yourself and your agency dollars in remediation costs, reputational • Defamation against cybercrime. Some of these include: damage, regulator fines, legal fees from • Identify theft management customers or employee court cases • Installing best-in-class • Privacy and intellectual property claims and a host more potential damages. anti-virus software Contact Aon today for a quote We’re Here to Help You might be wondering – how important • Ensuring you update your is this for a real estate business? The operating systems and patches If you would like to find out more or would 1800 377 712 answer? Very. You know as well as anyone • Always adhere to recommended like to discuss your Cyber Insurance needs, [email protected] else the level of sensitive information you guidelines for passwords, and please call Aon’s Real Estate team on 1300 hold, but unfortunately, the industry has update these regularly 734 274 or email [email protected]

© 2019 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141. 1 http://mastersinlaw.champlain.edu/internet-privacy-in-the-digital-age/ The information contained in this communication is general in nature and should not be relied on as advice (personal or otherwise) because your personal needs, objectives and financial 2 https://www.symantec.com/content/dam/symantec/docs/infographics/istr-attackers-strike-large-business-en.pdf situation have not been considered. Before deciding whether a particular product is right for you, please consider your personal circumstances, as well as the relevant Product Disclosure Statement (if applicable) and full policy terms and conditions available from Aon on request. All representations in this communication in relation to the insurance products we arrange are subject 3 https://www.unisys.com/unisys-security-index/australia to full terms and conditions of the relevant policy. Please contact us if you have any queries.

AFF0727AE 0319 Your life, your fund

With REI Super for the 2019 last 15 years* With the average retail super fund for the last 15 years* MELBOURNE 22-24 OCTOBER Compare the FEDERATION SQUARE Further details coming soon. pair and make the switch.

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* Consider a fund’s PDS and your objectives, financial situation and needs, which are not accounted for in this information before making an investment decision. Assumes initial salary of $50,000 and starting account balance of $50,000. Comparison modelled by SuperRatings, commissioned by ISA Pty Ltd. Modelled outcome shows average difference in the net benefit of REI Super and the retail super funds (Retail super funds include bank owned and other) tracked by SuperRatings with a 3 (144 funds), 5 (117 funds), 10 (73 funds) & 15 (45 funds) year performance history to 30 June 2018, taking into account historical earnings and fees of main balanced options. This excludes contribution, exit, insurance fees and additional adviser fees. No adjustments have been made to the figures to take into account the effect of inflation on purchasing power since this time. Past performance is not a reliable indicator of future performance and should never be the sole factor considered when selecting a fund. March 2019 REIS 55108 Your life, your fund

REI Super has a 40-year history of delivering strong returns, low fees and expert service to all our members.

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The Australian Women’s Leadership The symposiums will feature a range An attendance discount of 25% Symposiums are a national of presentations, panel discussions is currently available by entering series of events focused on the and interactive sessions covering code ANSY19 at the time of booking experiences of women leaders in a range of topics, including: (available until each symposium sells the contemporary workforce. • To change or to disappear: Three out). For more information and to book: www.wla.edu.au/symposium Taking place in every state and strategies as a leader to survive in territory capital between May and an ever-changing business August, the Symposiums are an environment unparalleled gathering of the best • Breaking the competency trap and and brightest female talent. Keynote developing adaptive leadership speakers include Tina Arena AM, • Womenkind: Unlocking the power Ita Buttrose AO OBE, Clare Bowditch, of women supporting women Michelle Cowan, The Right Hon • Let’s talk about non-traditional roles Dame Jenny Shipley, Jacqui Lambie, • Lessons learnt in the world of Jessica Rowe and many, many more. politics • Be heard and remembered: How to use your stories to influence effective change in the workplace WORKPLACE GENDER EQUALITY AGENCY (WGEA) REPORTING

WGEA reporting finishes soon. Reporting checklist • Download the Workplace profile worksheets and the Indicative The Workplace Gender Equality • Start preparing your information format of the workplace profile Act 2012 requires non-public now. Early preparation and and reporting questionnaire from sector employers with 100 or more submission will mean faster access the WGEA website. For ease, employees to submit a report to the and response times to the portal Workplace Gender Equality Agency WGEA encourages employers • Ensure you have a current AUSkey to use the ‘unit level template’ (WGEA) between 1 April and 31 to log into the portal. If you are not when preparing their workplace May each year for the preceding sure, go to the WGEA website and profile, as the online system will 12-month period (1 April-31 March click on the ‘Portal Login’ at the top automatically aggregate the data. each year). Here are three things right-hand corner of the screen you should consider doing now: • If there is a problem with Refreshed reporting resources for your AUSKey scroll down the 2019 can be found on the WGEA page to the ‘Further AUSkey website to assist organisations issues’ section of the AUSkey through this process. page on the WGEA website for answers to common issues REIA PUBLICATIONS

REIA has published property market data and analysis for several decades. It has an excellent reputation as a highly credible source of information and considered opinion on the residential and commercial property markets in Australia. REIA publications use information collated from a wide variety of sources including real estate agencies, industry and government. Both raw data and analysis are published in REIA reports. The Adelaide Bank/REIA Housing Affordability Report and the REIA Real Estate Market Facts may be purchased as a 6 or 12 month subscription. For more about the Adelaide Bank/REIA Housing Affordability Report, click here. For more about the REIA Real Estate Market Facts publication, click here. Also, “datacube” spreadsheets provide key information on quarterly median values, dating from the beginning of REIA data collection through to the current quarter, for all capital cities where data is available. For more information on REIA datacubes, please call 02 6282 4277. MAKING NEWS General national news

REIWA CEO Neville Pozzi and staff celebrate the arrival of Japan’s new imperial era ‘Reiwa’ at its headquarters in Subiaco, Perth.

REIWA celebrates Japan’s we witness this kind of viral attention. “With any luck, the spike in interest new imperial era We’re pleased to share the name with from our Japanese friends will help Japan’s new imperial era and wanted to boost foreign investment in Western The Real Estate Institute of Western commemorate the occasion with our staff Australia and assist our local property Australia has joined in celebrations for and social media followers,” Mr Pozzi said. market in its recovery,” Mr Pozzi said. Japan’s new imperial era, coincidentally Today’s new Japanese era signals the end called ‘Reiwa’, by decorating its After the new era’s name choice was announced on 1 April 2019 (originally of a 30-year run of the Heisei (“achieving headquarters in Perth with the confused for an April Fools’ joke), the peace”) era, which began in 1989. The Japanese national colours, hosting a Institute received a surge in traffic name ‘Reiwa’ is taken from an old existing Japanese themed morning tea and on reiwa.com, with 70 per cent of compilation of Japanese poetry and doing a social media takeover. its traffic coming from Japan. represents fortune, peace and harmony. REIWA CEO Neville Pozzi said REIWA also experienced a dramatic Source: The Real Estate Institute the international attention the increase in interaction on its social of Western Australia Institute had received since the media channels following the announcement was unprecedented announcement. That morning, there and deserved to be celebrated. were already 132,000 tweets about “REIWA has been around for more ‘Reiwa’ with that number expected than 100 years and it’s not every day to grow as the day continues. MAKING NEWS General national news

REIV to help vendors “You can even tailor your search to find choose a member the best professional with experiences matched to your needs: for example, you The Real Estate Institute of Victoria can see who has the best record on selling has launched a new tool to help people three-bedroom houses in your suburb.” find the right real estate agent. “The REIV understands that real Objectivity is at the centre of a new estate transactions are usually the online search tool from the Real most significant that we make in Estate Institute of Victoria. our lives, which is why we focus on Launched on 20 May, Choose a Member developing and supporting real estate is designed to help vendors find the professionals who can help make right agent to sell, lease or manage these decisions easier for you.” their residential or commercial property. The launch of the Choose A Member The resource provides the user coincides with an awareness with the number of sales, date of campaign comprising print, most recent result, link to agency billboard and online advertising. profile and link to recent results Ms Waters said the REIV made sure of Victorian REIV member agencies. its members were well equipped with At a glance: the right knowledge, resources and tools • The Real Estate Institute of Victoria and to give professional advice and service. launched its Choose a Member “When you choose an REIV Member, search tool on Monday, May 20. you choose a professional who has • The resource provides information completed the required training, is on the number of sales and the most committed to ongoing professional recent results of REIV members. development, is covered by professional • According to the REIV, it is the first indemnity insurance and is required of its kind on the Victorian market to follow REIV guidelines to always act not to be influenced by referral fees, ethically, honestly and fairly,” she said. priority listings or other incentives Source: The Real Estate Institute of Victoria to rank one agent over another. According to REIV, its members make up 80 per cent of agencies in the state. REIV President Robyn Waters said, “There is no way to manipulate the order that agents and agencies are presented.” INDUSTRY UPDATE Industry news from around Australia

Morrison Government election home buyers without negatively affecting implemented, based on WA’s substantial victory a win for housing market other groups. We hope to see the scheme contribution to Australia’s GSP. We also expanded in the future,” Mr Collins said. need the new Minister for Cities to have REIWA congratulates Scott Morrison a Perth City Deal as a top priority.” and the Liberal National Party (LNP) In the lead up to the election, on being re-elected to Government REIWA’s ‘What about WA?’ “REIWA will continue to champion in the 2019 federal election. campaign called on federal political parties the issues affecting WA to ensure our to not forget about Western Australia state is not forgotten about when REIWA President Damian Collins said the when making policy commitments. LNP’s victory meant there would be no national policies are implemented.” change to national property taxes, like “For too long we’ve seen WA overly relied Source: The Real Estate Institute negative gearing and capital gains tax, upon when times are good and ignored of Western Australia which was a big win for the Australian when we are doing it tough. It’s time we got our fair share of federal funding and housing market and would go a long way Innovation versus legislation towards helping the WA market recover. support. In particular, we’d like to see the Morrison Government introduce federal Greater collaboration between legislators, “We are delighted there will be no incentives to help states and territories innovators and real estate is required changes to national property taxes. phase out stamp duty,” Mr Collins said. Meddling with one component of a to create a transparent regulatory Last month, REIWA had the opportunity broader tax system is reckless and would framework that both protects consumers to quiz the Prime Minister at an election have had significant consequences and helps the industry embrace new campaign event about his party’s plans for the Australian housing market. efficiencies through technology. to help the WA property market. His “This outcome will provide much needed response was that WA had already been That was one of the key lessons from the stability for the WA property market. given a greater share of Australia’s GST second Future of Proptech lunch held We are looking forward to working with revenue and these additional funds should by the REINSW on 30 April 2019, where our local federal members of parliament be used to look into how to abolish stamp it was revealed real estate agents may and senators on ensuring good housing duty and reinvigorate our local market. carry a legal risk when they adopt some and investment outcomes for all “The WA property market is crying out of the more disruptive technologies. West Australians,” Mr Collins said. for some definitive leadership to help aid On the panel was Sarah Bell from AIRE, Recently, the Prime Minister announced recovery and improve our local economy. which delivers AI to the residential his party’s plans to make the Australian Regardless of whether the responsibility real estate industry; Thom Richards property market more accessible to first for this change comes at a state or federal home buyers by offering loan guarantees level, we need action now,” Mr Collins said. from property management software app Managed, which negates the so eligible buyers could purchase their “In addition, REIWA would like to see need for trust accounting; and Justin first home with a five per cent deposit. Perth put back on the Regional Migration “The Morrison Government should be Scheme to help attract skilled workers Butterworth from leasing platform Snug. applauded for this initiative. This is a great to WA and fill the current oversupply Representing NSW Fair Trading was example of smart, effective bi-partisan of housing, and we want a minimum Bjorn Borg, while Lisa Indge from Let’s housing policy that will help some first 15 per cent infrastructure budget Rent provided the real estate agents› view.

»» article continues INDUSTRY UPDATE Industry news from around Australia

»» continued Key revelations that came out of is instantaneous,” said panel moderator apply the connectivity of AI with network the panel discussion included: Kylie Davis. “But when you try to buy theory, which is just enabling the way that a house or rent, it’s like 1984 called we’re using technology, and the result • Advice from NSW Fair Trading is exponentially speeded-up change. It’s that legislative change typically and they want their process back, and impossible to leave it to reaction now.” takes five years, while regulatory suddenly you’re back to handling paper changes can take two to three. and waiting for phone calls to be returned. But Director of NSW Fair Trading, Bjorn • The lack of engagement and “The legislation we have at the moment, Borg, said it is not the role of regulators accessibility of regulators risks while looking to protect consumers, to approve or endorse new technology, but stifling innovation and preventing is failing to deliver good service to protect consumers and make sure there Australian proptech disruptors from experiences, while the agents who do is legal redress when things go wrong. being internationally competitive. want to adopt these technologies are He conceded regulators need to improve between a rock and a hard place.” • Proptech innovators may be best taking their engagement with innovators, but a ‘forgiveness not permission’ approach The panel heard that overseas said innovators could help regulators rather than waiting for government. governments were starting to collaborate get up to speed more quickly by Accordingly, they should structure the with innovators to create a new identifying the changes needed to be risks and costs of educating the market. approach to legislation that sets out made that accommodated multiple frameworks to guide desired behaviour. market players, not just themselves. Exponential innovation testing “We need as much background as regressive regulation “It’s the role of technology and innovation to push the boundaries, possible, not just on what the product The audience was told that more than while legislation has typically reacted,” does, but the problem it is solving and US$20 billion is expected to be invested said Bell. “Legislation needs to come in any international trends that show how in proptech globally in 2019, representing at the design stage – at concept. The it is playing out in other jurisdictions and growth of over 9000 per cent since European Union has published guidelines economies,” he said. “Without that clarity, 2012. Internationally, the growth of for the ethical development of AI, and I regulators are going out there trying to proptech is occurring faster and with don’t think they’re unreasonable. They find that out for ourselves, but we’re not greater momentum than fintech. embrace the hope that exists with new the experts in this particular field. That’s Unlike fintech however, which is regulated technology, and I think they’re the best where you then get even longer delays.” in Australia by national legislation through practice guidelines in development that Justin Butterworth from Snug said the ASIC, proptech must contend with different all governments should be adopting.” current approach from regulators was legislation across each state, providing stifling innovation and making Australian At risk of being left behind additional challenges for local startups. technology uncompetitive internationally. This was occurring at a time when The speed of innovation means “Here we are, two years down the track dissatisfaction with real estate governments that want to create reactive in my space of digital bonds without agents and the disjointed and legislation are being left behind. having effective conversation, without fraught process of buying, selling and “Since the Second World War, we’ve bringing about innovation to the market, renting property was growing. been running on Moore’s Theory that without having learned the insights “When you pick up your phone to use the speed of innovation would double from consumers and regulators, and Uber, Airbnb or Uber Eats, the process every two years,” Bell said. “But you we’d like to see that change,” he said.

»» article continues INDUSTRY UPDATE Industry news from around Australia

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“Just two weeks ago, the other startup “But we did it in a structured way. We said Bell. “You’re suggesting that if you in this space internationally raised $40 only used it with existing tenants that drive innovation in this country, if you million at a $300 million plus valuation we already had a relationship with and drive employment and progress and all of because they have not faced the who were good quality tenants. And we those amplified economic benefits, then same restraints. It’s not acceptable had the permission of the landlord and you will be punished by the regulator. to be two years down the track with the tenants. Happily it worked out.” So, it is not a workable way forward.” the inability to meet and discuss Let’s Rent has also been an early She said government also needs progress innovation in this country.” adopter of Managed, a property to accept it is being disrupted and Taking the right steps forward management platform that does not look to how technology can create require a trust account. In NSW, the better legislative outcomes. The panel identified that adopting legislation only requires a trust account “One of the principles of good new technology did not have to be an to be in place if an agent is holding programming and good product ‘either/or’ proposition, but could be monies in trust. As Managed sends development is that we need to be done incrementally. For example, by funds directly from tenant to landlord, incredibly transparent. There is no identifying a small group of existing it circumvents the need for a trust. reason why that principle of transparency clients that you could receive informed shouldn’t be a burden that is imposed consent from to trial new technology. “The legislation isn’t against us in the way we work – so for us, it’s not so much upon regulators as well,” Bell continued. “We’d love to see a framework which is a regulatory challenge but an education “It’s impossible to go to a regulator with around process and timeliness for engaging challenge,” said Richards. “My major issue a proposition for a sense check if there’s with regulators, so it’s clear on what basis with a lot of the states is they’ve all got no transparency or models or framework consumer choice and consumer protection different regulatory bodies. I’ve got to go around what makes sense to regulators.” will be measured,” said Butterworth. and educate each state, which then has to Borg said one of the takeaways he “We need to create a safe harbour for educate their agencies that work for them. had from the day was the need for the the innovators in the industry to test “For me, it’s more about support around department to engage more closely and learn. We don’t have to make a education and helping people understand with innovators and the industry. fully-committed long-term decision, but what’s best for their business, as opposed Wrapping up the day, REINSW hey, why don’t we try [this] in Sydney, to us trying to change legislation, because CEO, Tim McKibbin, said proptech with REI’s chief members who are we’re now compliant in every state, and offered the opportunity to enrich best-practice experts by saying, ‘Hey, we’ve had the legal advice to suit.” the services delivered by the let’s put digital bonds into Lisa [Indge]’s property services industry. portfolio and see how they perform.’” Same rules for all Source: The Real Estate Institute Indge said her office had made the decision Borg said that while legislation typically of New South Wales to use digital signatures on leases, despite takes five years to implement, it has the grey area which meant only physically advantages because it delivers stability witnessed signatures were compliant. and market certainty, but the statement “The advantages and convenience of was met by a horrified gasp from the room. the technology were so evident, that we “A five-year turnaround is completely made the decision to go ahead,” she said. impractical with the speed of innovation,” POLITICAL WATCH Information and news from government

Dwelling approvals fall in March The value of total building approved was home buyers (-0.5 per cent) in March, in flat in March, in trend terms. The value of a similar pattern to recent months this The number of dwellings approved residential building rose 0.4 per cent, while fall was again much less than the drop in in Australia fell by 0.6 per cent in non-residential building fell 0.6 per cent. the number of loans to owner occupier March 2019, in trend terms, according non-first home buyers (-3.3 per cent). to data released by the Australian Source: The Australian Bureau of Statistics Bureau of Statistics (ABS) recently. After rises in January and February, lending to households for personal “The overall decrease was driven by private Lending to households finance excluding refinancing fell 11.2 sector houses, which declined 1.4 per falls 3.7 per cent per cent in March, seasonally adjusted. cent in trend terms,” said Justin Lokhorst, The value of new lending commitments In trend terms, the value of new lending Director of Construction Statistics at to households fell 3.7 per cent in March commitments to businesses fell 2.0 the ABS. “However, private dwellings 2019, seasonally adjusted, according per cent in March. All components of excluding houses rose by 0.8 per cent”. to the latest Australian Bureau of business lending remained subdued. Among the states and territories, total Statistics (ABS) figures on new lending Source: The Australian Bureau of Statistics dwelling approvals fell in Victoria (3.5 to households and businesses. per cent) and Queensland (1.4 per cent) The fall in lending to households in March in trend terms. Increases were recorded follows a 2.2 per cent rise in February 2019. in the Australian Capital Territory (4.8 per cent), the Northern Territory (3.9 per ABS Chief Economist, Bruce Hockman cent), Western Australia (3.8 per cent), said: “All components of new lending New South Wales (0.8 per cent) and South to households were weaker in March, Australia (0.4 per cent). Tasmania was flat. more than offsetting a bounce in lending activity seen in February.” Approvals for private sector houses fell 1.4 per cent nationally in trend terms. “There were large falls in the value of Declines were recorded in the three largest lending for owner occupier dwellings in states: New South Wales (3.4 per cent), seasonally adjusted terms in both New Victoria (1.8 per cent) and Queensland South Wales (-5.7 per cent) and Queensland (0.9 per cent), while increases were (-5.3 per cent) in March, after rises in both recorded in Western Australia (1.0 per states the previous month” he said. cent) and South Australia (0.9 per cent). Nationally, lending for investment In seasonally adjusted terms, total dwellings also contracted further in dwellings declined by 15.5 per cent in March, with the series down 25.9 per March, largely driven by falls in New cent (seasonally adjusted) compared South Wales (27.4 per cent) and Victoria to March 2018. The level of new (27.0 per cent). The decline was led by lending for investment dwellings is at private dwellings excluding houses which its lowest level since March 2011. fell 30.6 per cent, while private house While nationally there was a fall in the approvals decreased 3.2 per cent. number of loans to owner occupier first FIABCI

FIABCI 70TH WORLD REAL ESTATE CONGRESS MOSCOW • RUSSIA

OVERVIEW

Artificial intelligence. Big Data. of FIABCI’s annual fixture – will take up-to-date with the latest news in BIM Technology. Blockchain. These place, from May 27 to 31, 2019 in event marketing, see firsthand the buzzwords are all the rage as we Moscow, Russia. From developers innovations in building materials and march towards a global technological to architects, managers to brokers, construction equipment, and discover disruption known as the fourth professionals from all backgrounds the power of virtual reality technology. industrial revolution, promising related to the property industry will As for the topic of urban development, increased transparency and the gather at the World Trade Center UN-Habitat, one of our Global exchange of value between parties to discuss the theme of the 2019 Partners, will play an important role in in a trusted way. With the inevitable edition, “Digital Era of Real Estate”. evaluating the progress achieved over advancements in technology we’re There is a myriad of options for those the past year, as well as in developing facing, the smart future is now and the looking to get their hands on these forecasts for 2019. Additionally, there real estate industry is not exempt from new and valued tools that technology will be several presentations on the it. The best way to deal with this fact brings to the table, while engaging current programs taking place across is to better understand what impact with the industry’s finest to share all regions of the world, particularly on digital technologies will have on the best practices and conduct business. the promise of technological advances. sector and how to reap maximum Through panel discussions, B2B benefits by embracing the momentum. meetings, workshops, project visits, It is under this premise that the among others, participants will have anniversary edition of the 70th the opportunity to grasp the profile World Real Estate Congress – part of the millennial homebuyer, stay

THE WORLD Property news from around the world

Over half of under 35s stay ‘The fact that so many young people is responsible for 62% of Knight with parents due to financial can’t afford to move out of their Frank’s applicant numbers for Italy. struggle to save a deposit parents’ homes in fear of not being The report reveals that enquiries for able to get onto the property ladder is More than half of people under the properties in the €10 million plus alarming. Too many of them are forced age of 35 still live with their parents as sector has strengthened due to a new they struggle to get onto the property to put their lives on hold in a bid to get €100,000 flat tax, with many wealth ladder, new research has suggested. onto the property ladder,’ said Ishaan families purchasing more than one Malhi, Trussle chief executive officer. Overall, some 58% of 18 to 34 year property in Italy. Most buyers come olds are in their parents’ home while ‘Getting a mortgage is often one of from the Middle East, the United States, in London this rises to 74% as they the biggest financial and emotional the UK, Benelux countries and India. struggle to save a deposit to buy their commitments a person will make in ‘International enquiries rather than own property, according to the research their lives and ensuring the industry is domestic demand is behind the from online mortgage broker Trussle. supporting young people as they take recent resurgence. Buyers pay little this step is crucial,’ Malhi added. However, the North East of England is attention to the political and economic the area with the highest number of Source: PropertyWire.com landscape focussing instead on the grown-up children still living at home with unrivalled lifestyle on offer. For Italy, the figure reaching 81%. Yorkshire and banking and governmental crises Property markets in Florence Humber has the fewest with just 22% of are nothing new,’ said Amy Redfern- see prices rise as Tuscany under 35s still living with their parents. Woods of Knight Frank’s Italian desk. continues to be popular Half of those living with their parents Under the tax rules introduced in are doing so to save for a house deposit The prime property market in Tuscany 2017 individuals who take up Italian and 36% admit they simply can’t afford in Italy has stabilised following a decline residency benefit from a flat tax on to live alone but it is a stressful process. in peak to trough terms of 40% with all global income of €100,000. In The research found that 59% say saving properties in Florence and Lucca up 1% addition, eligible family members for a home causes some kind of anxiety. in 2018, the latest research shows. benefit from a flat tax of €25,000. Meanwhile, in a bid to support their Tuscany is one of the most popular parts ‘Linked to this, we have seen a detachment children’s saving ambitions, almost of Italy with overseas buyers and almost of the super-prime market over the last half, some 48%, of parents said 100,000 foreign residents now living in year with enquiries for properties €10 they would rather their grown-up Florence, Lucca and Pisa and the number million or above strengthening. Some of children live at home than rent, so is expected to increase, according to the these high net worth individuals already they can save money for a deposit. Tuscany Insight report from international own an Italian home and following the What’s more, 23% aren’t charging their real estate firm Knight Frank. advice of their family office, are keen to grown-up children rent, to ensure they can Florence recorded the largest increase expand their footprint in the country, save as much as possible and eventually of the three cities between 2012 and often seeking multiple homes across get onto the property ladder. Instead, they 2018, with the number of overseas a range of locations, city, coastal or in rely on them to help around the house. residents rising by 38.5% and Tuscany the Alps,’ Redfern-Woods explained.

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While most overseas buyers are looking Seasonal factors lifted the average making it the slowest May since 2014. to acquire a holiday home, an increasing home price in England and Wales by London is the worst affected by this number are seeking a permanent base. 0.5%, but low numbers of market crisis of confidence, brought on by Brexit Almost 100,000 foreign residents now participants have undermined this, uncertainty, where lack of demand live in Florence, Lucca and Pisa according say the report from Home.co.uk. means the typical time on the market to Italy’s Statistics Office Istat. It adds that month on month while prices for unsold property has soared by ‘The one trend that stands out this year rose in Wales, Scotland and all English 23% and it is now the slowest in the is that our applicants are time poor and regions, this was driven by hope rather London housing market for 10 years. it influences their search in several ways. than demand and the total stock for sale At the same time, vendors’ reluctance Firstly, most want a renovated project, has increased by a mere 1.7% year on year. to commit has meant that supply not one that requires any work. Secondly, London’s annualised losses have has dropped 28% year on year. The buyers want to be within an hour of an moved back slightly from 3.1% to report says that market pessimism is airport enabling them to make use of the 2.9% and now total 6.7% since the widespread and Brexit uncertainty, property four or five times a year for mini- start of the price decline in May 2016. combined with the post-boom malaise, breaks and minimise travel, the days of Asking price falls in the South East continues to hamper property sales. visiting for a whole month in the summer continued to ease to 1.5% year on year ‘A wait and see attitude is stifling both are largely gone,’ said Redfern-Woods. but worsened in the East to 3%. supply and demand. So far, these exceptional strains on the market have Finally, most intend to own their home The figures also show that an increasing had little net effect on the established for upwards of five years, often renting it number of vendors have withdrawn from the sales market altogether, with numbers pricing trends but home values appear to out to cover costs, so a low maintenance up 6.5% year on year. The only regional be levitating, based more on aspiration property is preferred. Buyers continue supply increases were recorded in the than any real underlying market to seek value and with prices in Lucca East and West Midlands, both up 3%. fundamentals,’ the report points out. 20% to 25% lower than in Florence the ‘Spring optimism has managed to lift city is firmly in the spotlight. Lucca is To put it in perspective, the report prices in all the English regions, Wales also easily accessible via Pisa Airport, points out that annual growth was and Scotland, although this appears to it is located within a 30 minute drive 1.1% a year ago and the stalled be driven by wishful thinking on the part of the Mediterranean,’ she added. market is likely to be unchanged. of a reduced number of vendors rather Typical time on the market figures Source: PropertyWire.com than by demand, as properties spend show that the worst regional longer and longer on the market,’ it adds. slowdowns are in Greater London, up Asking prices down by 0.2% 23%, the East of England up 25%, the Source: PropertyWire.com year on year in the UK South West up 20% and the South East also up 20% year on year. Asking prices in the UK are 0.2% below where they were in May 2018 Indeed the typical time on the market and supply is down by 9%, according is currently 89 days in England and to the latest national index. Wales, 11 days longer than in May 2018, REIANEWS

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