REIANEWS ISSUE 87: MARCH - APRIL 2019

IN THIS ISSUE

2019 REIA NATIONAL AWARDS FOR EXCELLENCE

NEGATIVE GEARING AND THE 2019 ELECTION

FEDERAL BUDGET 2019 OVERVIEW

WHAT INDUSTRY STAKEHOLDERS ARE SAYING

BENDIGO BANK – INSTANT HOME LOAN TIC OF APPROVAL

MARKET SNAPSHOT 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 FROM REIA’S PRESIDENT

Welcome to the March/April edition promote and showcase excellence Whilst there are no specific measures of REIA News. and best practice in the real estate for housing in the 2019 Federal profession. It is the ultimate Budget, the impact on housing This month‘s REIA News is a bumper demand is mildly positive. Regional issue featuring the 2019 REIA Awards accolade to be a national winner. economies will benefit from the for Excellence, the 2019 Federal Each year new standards in agency increased infrastructure spending and Budget and the upcoming Federal practice are established by the slight increases in disposable income election and REIA’s campaign. entrants and replicated by progressive through the tax cuts will provide REIA’s Annual Awards recognise professionals throughout . for relief on household budgets the best performers across a wide I am encouraged by the increasing and mortgage commitments. spectrum of categories including number of professionals that strive to The Budget was a precursor to the residential, commercial, rural, sales, be recognised as the best in Australia. Federal Election which we expect to property management, buyers To the Award sponsors our sincerest be called within days. Housing and agent, marketing and innovation. thanks. Without their support a night its taxation for investors will be one These Annual Awards are an industry of such significance could not occur. of the matters that will be part of the highlight. They acknowledge the I would also like to thank all the public debate and probably one of the hard work and effort by individuals judges for so willingly contributing issues that will decide the outcome. in achieving the best results their time and expertise in judging The article in this edition outlines for their clients and encourage, the contestants’ submissions. the issue and REIA’s campaign.

Mr Adrian Kelly REIA PRESIDENT

Follow us on Twitter@REIANational Protect your client’s rental property and income

Landlord insurance from just $1 a day* Terri Scheer is Australia’s leading landlord insurance specialist, offering protection for your client’s rental property from risks that standard building and contents insurance may not cover. Loss of rent Malicious and accidental damage by tenants Theft by tenants Flood, storm and water damage Damage by pets May be fully tax deductible Call 1800 804 016 or visit terrischeer.com.au

Australia’s Leading Landlord Insurance Specialist

*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. WINNERS OF THE Protect REIA NATIONAL AWARDS FOR EXCELLENCE 2019 your ANNOUNCED client’s rental

The Real Estate Institute of South Australia’s Toop&Toop Real Brett Diston of Ray White Commercial property Australia (REIA) announced the Estate was recognised as Large in Victoria won Commercial winners of the 14th National Residential Agency of the Year, for Salesperson of the Year with Network the third year in a row, entitling Pacific Real Estate in Victoria winning Awards for Excellence at a them to be inducted into the Small Residential Agency of the Year. gala dinner held at Crown Perth and REIA Hall of Fame in 2020 for this Rich Harvey of Propertybuyer on 21 March 2019. category. Toop&Toop Real Estate in won were the recipients of the inaugural REIA President Adrian Kelly said Buyer’s Agent of the Year. REIA Hall of Fame Certificate of Merit income the awards acknowledge and Mr Kelly presented the prestigious after successfully taking out the recognise the best of the best President’s Award for 2019 to John in Australian real estate. Innovation category in 2016, 2017 and 2018. Toop&Toop Real Estate Cunningham of Cunninghams Real Estate in New South Wales, recognising “More than 250 real estate has already been inducted into the significant contribution made by an professionals from across Australia REIA Hall of Fame for Innovation in individual to the real estate profession. converged on Perth on 21 March 2009. It was an outstanding night 2019 indicating just how strong for the agency as Kirk Fernandez “In the last 12 months alone, John Landlord insurance from just $1 a day* our industry is,” Mr Kelly said. also of Toop&Toop Real Estate has done more for our industry “Winners were recognised from won the Achievement Award. than most agents will ever do in Terri Scheer is Australia’s leading landlord insurance specialist, offering protection for your client’s rental their entire career,” Mr Kelly said. most of the states and territories Nikki Katz of Benchmark Business property from risks that standard building and contents insurance may not cover. highlighting it is not just the Sales & Valuations in South Australia “John has been a driving force behind larger states and metropolitan the Pathway to Professionalism Loss of rent won Business Broker of the Year and cities taking home the awards Tara Stokes of Harris Real Estate in program and has fought for education Malicious and accidental damage by tenants but there where outstanding South Australia took home Corporate and training reforms in his home state achievers from everywhere.” Theft by tenants Support Person of the Year. of New South Wales. He is the best of Flood, storm and water damage In particular Capital the best and a well deserving winner. Tasmania’s Tameka Smith of Key2 Territory saw outstanding results Damage by pets Property won Residential Property “Thanks are also extended to REIA’s with winners in four categories, May be fully tax deductible Manager of the Year and Medium 2019 national award sponsors: including Colliers International (ACT) Residential Agency of the Year went Terri Scheer, Printforce, RECON, which took out Commercial Agency Call 1800 804 016 or visit terrischeer.com.au to Harcourts Huon Valley Tasmania. CoreLogic, PEXA, Rockend, AON and of the Year, Rupert Cullen of Colliers VaultRE their continued support International (ACT) taking home Peter Clements of Mint Real for the real estate industry is Commercial Property Manager of the Estate Claremont has taken back appreciated,” Mr Kelly concluded. Australia’s Leading Landlord Insurance Specialist Year. The Independent Property Group to back Residential Salesperson of Tuggeranong won the Innovation the Year and Rentwest Solutions award and Peter Blackshaw Real Estate in Western Australia won the *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 won the Community Service award. Communications Award. 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. 1 2 1

3 4

5

1 Residential Salesperson of the Year: Peter Clements – Mint Real Estate Claremont WA presented by Bruce Landow – CoreLogic 2 Innovation Award: Will Honey – Independent Property Group Tuggeranong ACT presented by Alister Maple-Brown – Rockend 3 Community Service Award: Narelle Casey – Peter Blackshaw Real Estate ACT presented by Mike Cameron – PEXA 4 Business Broker of the Year: Nikki Katz – Benchmark Business Sales & Valuations SA presented by Whitney Munoz – Aon 5 Commercial Property Manager of the Year: Rupert Cullen – Colliers International (ACT), award accepted on his behalf by Miron Solomons, presented by Whitney Munoz – AON

THANK YOU TO OUR SPONSORS

»» article continues 1 2

3 4

5

1 Commercial Salesperson of the Year: Brett Diston – Ray White Commercial VIC, award accepted on his behalf by Robyn Waters, REIV President presented by Bruce Landow – CORELOGIC 2 Commercial Agency of the Year Award – Colliers International (ACT) accepted on their behalf by Miron Solomons presented by Scott Wulff – VaultRE 3 Corporate Support Person of the Year: Tara Stokes – Harris Real Estate SA presented by Scott Wulff – VaultRE 4 Communications Award: Suzanne Brown – Rentwest Solutions WA presented by Mike Cameron – PEXA 5 Medium Residential Agency of the Year: Nick Bond – Harcourts Huon Valley TAS presented by Murray Pickles – Printforce

THANK YOU TO OUR SPONSORS

»» article continues 1 2 1

3 4

5 5

1 Large Residential Agency of the Year: Toop&Toop Real Estate SA presented by Murray Pickles – Printforce. (L-R) Suzannah Toop, Murray Pickles and Genevieve Toop 2 Ray Ellis – CEO First National Real Estate and David Airey (Past REIWA President and Past REIA President) 3 Diane Davis – REIA Board Director (NT) and Robyn Waters – REIV President 4 Sophie Curtis, So Cello 5 Jodie Mason, Bindi Norwell – CEO REINZ and Tim McKibbin – CEO REINSW

THANK YOU TO OUR SPONSORS

»» article continues 1 2

3 4

5 6

1 Adrian Kelly, REIA President 2 Catherine Summers and band 3 Residential Property Manager of the Year: Tameka Smith – Key2 Property TAS presented by Carolyn Parrella – Terri Scheer 4 Achievement Award: Kirk Fernandez – Toop&Toop Real Estate SA presented by Mark Williams – RECON 5 Small Residential Agency of the Year: Stephen Briffra – Network Pacific Real Estate VIC presented by Carolyn Parrella – Terri Scheer 6 (L-R) John Cunningham (Past President REINSW), Leanne Pilkington – President REINSW and REIA Board Director (NSW), and Peter Clements – Mint Real Estate Claremont WA – Winner – Residential Salesperson of the year

THANK YOU TO OUR SPONSORS

»» article continues 1 2

3 4

5 6

1 Lucy Durack 2 Buyer’s Agent of the Year: Rich Harvey – Propertybuyer NSW, award accepted on his behalf by Leanne Pilkington, REINSW President and REIA Board Director (NSW) 3 REIA President’s Award: John Cunningham – Cunninghams Real Estate NSW presented by Adrian Kelly – REIA President 4 Venue 5 REIA Hall of Fame Certificate of Merit: Toop&Toop Real Estate SA presented by Adrian Kelly, REIA President. (L-R) Genevieve Toop, Adrian Kelly and Suzannah Toop 6 Venue

THANK YOU TO OUR SPONSORS

»» article continues Your life, your fund

With REI Super for the last 15 years*

With the average retail super fund for the last 15 years* Compare the pair and make the switch.

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

Switch to your dedicated industry fund today – it’s easy. 1300 13 44 33 | reisuper.com.au/join

* 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 This article is brought to you by Adrian Kelly President of the Real Estate Institute of Australia NEGATIVE GEARING AND THE 2019 ELECTION

Even at this stage of the electoral The first thing to note is that negative With large increases in house prices cycle it is clear that housing gearing is not a special concession for in Australia’s two largest capital cities affordability and taxation property. It is a legitimate deduction during 2016 to 2018, there have been arrangements for housing are of expenses in the course of earning many claims that the current tax going to be key issues in the income from investments in all asset treatment of negative gearing and upcoming Federal election classes (including shares, other capital gains of residential property campaign and REIA hopes the investments and business ventures) is exacerbating housing affordability issues. This is simply not the case. debate will be based on rational until the investment generates Indeed the public interest is being thinking and not perpetuating a positive income stream in the served and advanced through the myths that simply do not hold future. The ability of investors to gear and use debt is a crucial part current taxation arrangements. up to analysis. of investing and fostering economic The current taxation arrangements growth. The ability to deduct the provide many Australians with the cost of debt and losses against opportunity to invest in property income is necessary to ensure that and augment their savings in investments are not taxed punitively. particular their retirement savings Similarly the 50 per cent discount on and at the same time improve capital gains replaces the previous rental affordability through an indexation of capital gains which was increased supply of rental housing. put in place to ensure that only real There is ample research that shows capital gains are taxed – the change that negative gearing and the CGT being made for administrative ease – discount are not driving excessive, and is also applicable to all asset classes. unproductive and speculative The current tax arrangements, in investment in housing but instead treating property no differently to they are adding to housing supply other forms of investment, provides with currently $7 billion a year invested in new dwellings. an incentive for private investment which increases supply for our growing One of these, the Henry Review, population, keep rents affordable and initiated by the current Opposition eases the burden on social housing. when they were in Government and

»» article continues »» continued

released in 2010, recognised that 3. Builders and their ‘tradies’ was a clear correlation between the current tax arrangements placed who will build less houses as electorates with high numbers of downward pressure on rents. shown by independent research investment property owners and a undertaken for the Master lower than average swing against the It is supply that is the critical Builders Association and the Government and in some cases gains. factor in resolving the affordability Property Council of Australia. problem. Changes to current taxation During the upcoming Election REIA arrangements will do nothing to 4. State governments and their will be taking a similar approach to address affordability. If anything constituents who will receive dispel the myths surrounding negative it will exacerbate the problem. less stamp duty to spend on gearing and pointing out the potential much needed infrastructure. economic impacts of changes to If there is a change of Government 5. Lower economic growth when the negative gearing arrangements. and the Opposition’s policy, of economy is showing signs of stalling. Keep an eye out for REIA’s daily restricting negative gearing to newly messages on Facebook, Twitter and constructed homes and halving the At the 2016 Election REIA employed Instagram starting on 8 April. capital gains tax discount whilst digital methodologies including daily grandfathering arrangements for Facebook messaging and Tweets current investors, is implemented which started the week after the @REIAAustralia there will be many losers. election was called, and ended the These will be: day before the election. As well @REIANational as utilising REIA’s contact base the 1. Mum and dad investors who want to posts were targeted at customised REIAustralia buy an existing investment property audiences including marginal seats. to supplement their retirement savings will no longer be able to Throughout the campaign we reached claim a modest taxation deduction. an average audience of 120,000 per week through the REIA Facebook 2. Renters who will see their rents rise page. The campaign became viral in just as they did under the Hawke/ the final two weeks, achieving a total Keating experiment in the 1980’s. reach of almost 1 million people. Contrast this to the current situation where we have the lowest annual Whilst it is impossible to be definitive increase in rents for two decades. on the impact of the campaign, there This article is brought to you by REIA Chief Executive Officer Jock Kreitals Jock can be contacted at FEDERAL [email protected] FEDERAL BUDGET BUDGET 2019 2019 OVERVIEW OVERVIEW

Whilst there were no major Whilst this may ordinarily have put Budget Overview pressure on interest rates, with the surprises in the Budget, the The Government describes this forecasts of inflation well within measures will ease the brake Budget as “back in the black and of economic activity by the RBA’s target zone, and the Australia is back on track”. slowing investment in dwellings, providing a fiscal stimulus From a deficit underlying cash balance the Budget should not adversely through infrastructure spending of $4.2bn in 2018-19, across the impact on the RBA’s decisions. and delivering higher disposable four years of the forward estimates incomes to 10 million low to In acknowledging the importance of there will be surpluses from $7.1bn middle income earners. the property sector to the overall in 2019-20 to $17.8bn in 2021-22 economy the Budget papers devote before dropping to $9.2bn in 2022. a section to the impact of housing Real GDP growth for 2019/20 is prices on consumption and investment forecast at 2.75%, up from 2.25% even pointing out that the incomes for the current financial year of real estate agents are correlated and unemployment is forecast with housing prices and turnover to remain steady at 5%. as are state Government revenues Following above average growth of from stamp duty. It is estimated 5.5% pa in dwelling investment the that a 10% drop in housing prices current pipeline of activity will see a could result in real GDP being growth of 0.5% in 2019-20 and then 0.5% lower after two years. decline in the subsequent two years.

2019-20 2020-21 2021-22 2022-23 Underlying cash balance ($b) 7.1 11.0 17.8 9.2 % of GDP 0.4 0.5 0.8 0.4 GDP growth (%) 2.75 2.75 3.00 3.00 Unemployment rate (%) 5.0 5.0 5.0 5.0 CPI (%) 2.25 2.5 2.5 2.5 Private investment, dwellings (% change) 0.5 -7.0 -4.0 N/A

»» article continues »» continued

A graphical summary of information Small to Medium Business contained in the 2019-20 Budget • Small-business owners are provided by the Parliamentary Budget winners from policies that keep Office is shown on the next page. tax burdens lower for longer. • The instant asset write off threshold Main Budget Points has been increased from $25,000 • There will be immediate tax to $30,000 per asset purchased cuts for taxpayers earning up to for those small to medium sized $126,000 per annum. For a single businesses with an annual turnover income family this is $1,080 and of less than $50m. The change will for dual incomes up to $2,160 apply from 7.30pm 2 April 2019 to with the full tax relief applying 30 June 2020 – again this depends to incomes between $48,000 to on legislation being passed. $90,000. This will be applicable, • The company tax rate for small provided legislation is passed, to medium sized businesses for 2018-19 tax returns. will be lowered to 25% by • In the longer term, the rate of the 2021-22 from 27.5%. middle tax bracket ($45,000 to $200,000) will be reduced from Infrastructure Spending 32.5% to 30.0% from 2024-25. • Infrastructure spending of $100bn over 10 years in all states and Housing territories ranging from $50m • Whilst there are no specific in the ACT to $7.3bn in NSW. measures for housing, the impact on housing demand is mildly State/Territory $ positive. Regional economies QLD $4bn will benefit from the increased NT $622m infrastructure spending. Slight increases in disposable income ACT $50m through the tax cuts will provide VIC $6.2bn for relief on household budgets TAS $313m and mortgage commitments. SA $2.6bn WA $1.6bn NSW $7.3bn

»» article continues 1 2019–20 Budget Snapshot

Figure 1: Underlying cash balance Figure 2: Total payments and receipts2 Figure 3: Net debt Per cent of GDP Per cent of GDP Per cent of GDP

Figure 4: Change in underlying cash balance since Figure 5: Decomposition of change in Figure 6: Key economic parameters 2018–19 MYEFO underlying cash balance3,7

2,4,8 5,6,13,14 5,6,14 Figure 7: Policy decisions — payments and receipts Figure 8: Top five revenue measures Figure 9: Top five expense measures Total, 2018–19 to 2022–23 Total, 2018–19 to 2022–23

Figure 10: Parameter and other variations — Figure 11: Contributions to annual real growth in revenue5,10 Figure 12: Contributions to annual real growth in expenses5,11 payments and receipts2,7,9 Average, 2018–19 to 2022–23 Average, 2018–19 to 2022–23

Figure 13: Payments to states in 2019–20, $127b12 Figure 14: Revenue in 2019–20, $514b5 Figure 15: Expenses in 2019–20, $501b5

1 Figures are prepared using data contained in the 2019–20 Budget Papers and 2018–19 Mid-year Economic and Fiscal Outlook (MYEFO). Any changes shown are since the 2018–19 MYEFO. 2 Payments and receipts are on a cash basis. 3 Consistent with the approach taken in Budget Paper 1 Statement 3 Table 7: Reconciliation of underlying cash balance estimates, these figures exclude the impact of policy decisions on Goods and Services Tax (GST) payments and receipts, but include the impact of parameter and other variations on GST payments and receipts. 4 An increase (decrease) in receipts results in an improvement (deterioration) in the underlying cash balance. An increase (decrease) in payments results in a deterioration (improvement) in the underlying cash balance. 5 Figures are on an accrual (fiscal) basis. 6 This figure depicts the net fiscal impact of the top measures. Where a measure impacts both revenue and expenses it has been classified according to its principal impact (consistent with Budget Paper No. 2). 7 Parameter and other variations refer to changes due to a broad range of reasons, including revised economic conditions, revisions to a program’s estimated recipient numbers, re-profiling of expenditure and other revisions. 8 This figure excludes the impact of policy decisions on GST payments and receipts. 9 Consistent with Figure 7, this figure excludes the impact of parameter and other variations on GST payments and receipts. Note that this approach is different from that applied to parameter and other variations in Figure 5. 10 This figure depicts the percentage point contribution from key drivers to average annual real growth in total revenue from 2018–19 to 2022–23. Average annual growth in total revenue is presented in the bottom bar in the figure. 11 This figure depicts the percentage point contribution from key drivers to average annual real growth in total expenses from 2018–19 to 2022–23. Average annual growth in total expenses is presented in the bottom bar in the figure. 12 Payments to states refers to the amount of funding provided to States and Territories under the Federal Financial Relations framework. This includes the transfer of the GST collected by the Commonwealth to States and Territories for use on general purposes. 13 Personal Income Tax Plan refers to the Lower taxes for hard-working Australians measure, which will reduce revenue by $19.5 billion over the forward estimates period. The net fiscal impact of $5.7 billion in the 2019-20 Budget reflects a provision of $13.8 billion over the forward estimates included in the 2018–19 MYEFO. 14 Measures are included on the basis of net fiscal impact in the 2019–20 Budget. Figures shown here may not match total policy impact due to provisions made in previous budget updates. WHAT INDUSTRY FEDERAL BUDGET STAKEHOLDERS 2019 ARE SAYING

AUSTRALIAN Asset Write-off facility for small “Ai Group welcomes the establishment INDUSTRY GROUP and medium-sized businesses will of a National Skills Commission as stimulate investment and productive recommended by the Joyce review “The stimulus inherent in the Federal capacity while also lifting sales and to drive overdue and long-term Budget is a timely and welcome employment for equipment suppliers. reforms to the VET sector. A National boost for a slowing economy at “Looking further ahead, the Careers Institute will further create a time of wavering business and additional structural reforms to the vital linkages between students, household confidence,” Ai Group Chief personal income tax scale represent schools, training and industry. Executive, Innes Willox, said today. important improvements that will lift “Strengthening foundation skills incentives to save, work and invest “The return to surplus, albeit a skinny for at-risk employees through the across the bulk of income earners. one, after more than a decade of new literacy, language, numeracy deficits should be recognised. The “Similarly, the Budget brings forward and digital skills program is a budget also takes positive steps in to 2021-22 the foreshadowed positive and timely step especially the structural reform of Australia’s reduction in tax rates for small for people most at risk. income tax arrangements and further and medium-sized companies and lifts investment in skills, infrastructure unincorporated enterprises. This “Exporters and potential exporters and assistance for new exporters. measure will underwrite a lift in will benefit from the increased However, there are real risks around potential of these businesses to deliver allocation to the Export Market the disappointing cuts to permanent sustainable wage increases for their Development Grants (EMDG) program. employees. It is disappointing though migration, in the modest improvement “The reduction in the permanent that Australia appears stuck with a to the budgetary outlook and in the immigration intake is of considerable two-tiered company tax structure. shortage of measures to substantially concern for the many businesses boost domestic productivity. “The increase in support for new facing skill shortages across a wide apprentices – by lifting employer and “Lifting household disposable incomes range of occupations. Extending apprentice incentives – is a particularly by combining additional tax relief with the reduction for a number of welcome initiative that will help the Energy Assistance Payment will years carries risks and will lift the address a number of skill shortages dependency on temporary migration. quickly put welcome cash in families’ and help provide stimulating career hands which will flow through to paths for many young Australians. It “Caution should also be sounded over consumer spending and hopefully is very pleasing that the Government the modest outlook for the budgetary lift business sales and employment. has listened to industry concerns position over coming years. The Budget Additionally, the increase in the Instant on our apprenticeship program. remains vulnerable to a downturn

»» article continues »» continued

in general activity and particularly Revenues from business have was the $11 billion net interest bill to a sudden fall in commodity underpinned the government’s ability on that debt – money that could prices. In this sense, the task of to pay for the announcements made be better spent on the services fiscal repair remains incomplete. with growing company tax collections Australians need and deserve. projected to reach almost half a The Business Council has been “The budget has taken clear steps trillion over the next five years. to boost confidence and put the campaigning for a lift in the status of the vocational education and economy on a sounder footing, Returning to a serious and credible training system and we welcome but it is fair to say that much work surplus matters enormously to meeting the cost of the future such the government’s commitment still needs to be done to boost as the $100 billion earmarked for to the VET sector and promise to productivity and build economic much needed infrastructure and establish a National Careers Institute resilience. Industry looks forward sustaining high living standards. and a National Skills Commission. to further policy announcements Also welcome, is the promise ahead of the upcoming Federal The personal tax cuts for low to create 80,000 extra election,” Mr Willox said. and middle-income earners will provide relief for families to apprentices and boost literacy, numeracy and digital skills. BUSINESS COUNCIL meet cost of living pressures. OF AUSTRALIA (BCA) We have got to keep the focus The increase in the instant asset on growing the economy, so write-off for small and medium This is a strong and responsible these tax cuts and spending business and expanding the eligibility budget that delivers a surplus, promises can be sustained. to claim it will help drive activity in lowers personal income taxes and the business community. However, invests in jobs, health, education and As the budget itself warns, Australia it’s the large investment projects infrastructure, Business Council chief cannot afford to be complacent and undertaken by big companies that executive Jennifer Westacott said. must better prepare for the global creates substantial export revenue, headwinds from a slowdown in China substantial tax revenue, generate This is the payoff for the community and domestic challenges. We welcome activity for thousands of small from spending discipline and hard Treasurer Josh Frydenberg’s pledge businesses and creates significant work. Business has continued to do to pay down the nation’s debt. Both employment, particularly in regional the heavy-lifting in this budget – major parties must show the discipline communities. One of the reasons which again is proof that when to actually do it. One of the single this budget is in a strong position is business thrives, Australia thrives. biggest items in tonight’s budget because it is built on decisions and

»» article continues »» continued

investments made by our biggest HOUSING INDUSTRY “The boom in building activity has companies many years ago. ASSOCIATION (HIA) brought with it an increased demand for transport and economic infrastructure. It is disappointing there is no “For the past five years the building The expansion of transport networks economy-wide signal about the industry has driven economic growth is crucial to the ongoing evolution need to fix the investment dilemma in Australia. In contrast, the Budget of our cities and regional centres. Australia is facing with new assumes that dwelling investment “The Budget’s increase in investment as a share of GDP near 25- will cool 7 per cent next year. expenditure on infrastructure year lows. This must be addressed as a “The measures in this Budget projects will also play an important matter of urgency to secure the future role in absorbing employment as revenue to pay for budget promises. will have a positive impact on affordability by improving the housing industry cools. The best way to sustainably lift household disposable income. “The increased incentives for wages growth is to drive investment “The timing of income tax cuts on training apprenticeships are to improve productivity. significant and necessary as the 1 July 2019 combined with a modest industry has faced significant skills The challenge for successive growth in wages will see an increase governments is to stay on track shortages over the past decade. in household disposable income. with fiscal discipline, deliver on “These incentives more than double the the promises to pay down debt “The combined impact will boost existing Federal Government incentives and get serious about tackling our household consumption faster than over the term of an apprenticeship. productivity problems by creating an interest rate cut and assist in “The small businesses that dominate the environment for all parts of offsetting the credit squeeze. the home building industry in Australia the economy to invest and grow. “The building and construction will appreciate the increase in the industry employs one in ten workers instant asset write off, at a time when in Australia. Maintaining a strong they are seeing their revenue slow. building sector is important not “The improved fiscal outlook presented just in terms of employment but in the Budget and these new measures also to ensure that adequate new should improve confidence amongst homes are built to avoid a worsening customers when making home of the affordability challenge. building and renovating decisions.”

»» article continues »» continued

INDUSTRY SUPER “Sadly, the Budget again misses an MASTER BUILDERS AUSTRALIA (ISA) opportunity to take action on the AUSTRALIA (MBA) millions of Australians missing out Those who have retired or are on Builders around the country will on super entitlements – particularly the cusp of doing so will benefit back the key initiatives in the Federal women and younger workers. from changes to voluntary super Budget that will help promote “Women on average receive 40 per contributions outlined in the Budget, economic growth across the country. cent less super than men, and a yet there is not enough help for the third of Australian workers are being “The return to surplus will boost millions of younger workers missing robbed of around $2,000 a year by confidence that the economy is out on basic super entitlements. employers refusing to pay super. back on track and will give builders The 2019-20 Budget has delivered the incentive to invest, create jobs, “The Government could have made generous changes to voluntary super hire more people and take on more these issues a priority by paying super contributions, that will see Australians apprentices,” Denita Wawn, CEO aged 65 and 66 able to make voluntary on parental leave, and abolishing the of Master Builders Australia. superannuation contributions, both $450 per month super threshold. concessional and non-concessional, “Although the budget includes “Master Builders welcomes the Government’s announcements on without meeting the ‘Work Test.’ welcome additional funding to the ATO to recover unpaid super there new investment in skills, infrastructure The new rules could theoretically allow is no commitment to align super and small business because they extra contributions of up to $500,000 with wage payments which would are targeted at what’s needed to for a couple. Industry Super Australia’s strengthen the economy,” she said. address the source of the problem. Deputy Chief Executive Matthew “The government deserves credit for Linden said the changes could help “In other measures Industry Super heeding Master Builders call for the those who have been unable to save Australia also strongly supports instant asset tax write off scheme to be enough for retirement but they could the announcement to extend increased and expanded. Thousands of also be used by those who have very permanent tax relief to merging small business builders in communities healthy super balances already. funds. There is likely to be significant around the country will benefit from fund mergers in the years ahead “If this measure proceeds there the increase to $30,000 but more and the tax relief will ensure would be some justification to focus importantly the significant expansion of members realise the full benefits. benefits to those with inadequate the eligibility threshold to $50 million super savings,” Mr Linden said. annual turnover,” Denita Wawn said.

»» article continues »» continued

“Likewise builders will strongly PROPERTY COUNCIL before dropping by 7 per cent in 2019- back the additional investment OF AUSTRALIA (PCA) 20 and a further 4 per cent in 2020-21 to train an additional 80,000 new as existing projects are completed. The Federal Budget and its growth apprentices in industries experiencing projections are heavily reliant on “Australia’s housing sector is worth skills shortages including building Australia’s falling housing markets $7 trillion – more than twice the size and construction,” she said. holding up, according to the of the share market – so Treasury “Infrastructure investment right across Property Council of Australia. are right to flag the risks for the the country, to build economic growth economy,” Mr Morrison said. “This is a budget set for growth, but nationally and in local communities behind every number in the budget “It also reinforces our warnings about is fundamental to the success of our is the unknown effect of the housing the impact of changes to negative industry and the economy. It will downturn,” Mr Morrison said. gearing and capital gains tax, particularly underpin economic growth in our at this uncertain time in the property cities and regions many of which are “The headlines of surplus, cycle.” The Property Council welcomed experiencing economic downturn. infrastructure and tax relief are the big increase in infrastructure However, these projects need to welcome, but falling house prices are spending announced in the budget. be fast tracked so that work can clearly Treasury’s economic wildcard. “The Budget delivers a $100 billion commence and be accessible to local “The Government and the Parliament investment over the decade to meet businesses,” Denita Wawn said. must have a laser-like focus on the needs of our growing cities and “While there was good economic the housing sector and be ready regions, including projects to break news in this budget, Master Builders with a contingency plan if these urban congestion and improve regional is concerned that Treasury, in line forecasts aren’t met.” The Budget connections,” Mr Morrison said. papers highlight the downside risk with Master Builders forecasts, “The personal income tax cuts predicts a seven percent decline in of a further deterioration in housing prices on dwelling investment and targeted at low to middle income housing investment. This reinforces earners should provide some relief household consumption, noting that if the need to ensure that all housing from cost of living increases. consumption dropped one per cent as investment incentives remain a result, this would shave a quarter of “The measures targeted at small intact,” Denita Wawn said. a per cent from GDP growth. Treasury to medium size businesses will says new dwelling investment will also provide some much-needed only grow 0.5 per cent this year, confidence,” Mr Morrison said.

»» article continues »» continued

The Budget papers highlight the strong into functioning, liveable globally The injection of $3 billion into the contribution made by the property competitive urban icons.” Urban Congestion Fund, a $2.2 billion industry in the pick-up in non-mining Road Safety Package as well as an “We remain concerned however, business investment which grew by additional $1 billion for the next phase that there were no direct new 9.7 per cent in 2017-18, compared of the Roads of Strategic Importance housing announcements contained to average annual growth of 1.5 per initiative will propel congestion in the budget last night that cent over the previous decade. busting measures to improve our directly target unlocking more daily commute and ultimately Investment in non-residential buildings affordable housing supply and quality of life for the community. made a particularly large contribution diversity. The development industry to business investment, including contributes around half a trillion The additional $23 billion of new investment in hotels and aged dollars to the Australian economy funding in 2019-20 for projects care facilities while office building and a well-functioning industry is and initiatives will benefit activity also lifted during 2017-18. crucial to the continued economic every state and territory and prosperity of this country. provide local job opportunities URBAN DEVELOPMENT for every day Australians. INSTITUTE OF AUSTRALIA “Infrastructure has dominated the Budget, delivering new major “Whilst the initiatives are impressive, Federal Budget delivers a infrastructure funding commitments they haven’t gone far enough to plan for our growing cities of a record $100 billion over a decade, address Australia’s current housing but falls short on housing new future Cities Deals, sought-after crisis and affordability.” With the latest The 2019-20 Federal Budget has tax cuts and is accompanied by a well- census showing how homelessness been heralded as ‘a budget for the considered and funded Population has increased by 14% nationally taxpayer, complete with congestion Plan with $23.4 Billion provided and by 22% for people between 19 busting measures that will future proof for a new Centre for Population.” and 24, we are putting a generation at risk of ever being able to afford Australia’ for generations to come. “We welcome the rolling to buy or event rent a home. UDIA National President Darren infrastructure plan to help manage Cooper states, “Australia’s growth our growing population, meet “UDIA has long since advocated for and population-induced city our national freight challenge and a coordinated, cohesive approach infrastructure pressures, has created get Australians home sooner and which is detailed in our National Policy a crucial opportunity for the Federal safer with a view to realising our Agenda. Our overarching 6 pillared Government to re-shape our cities 30-minute city concept,” he added. policy with solutions is aimed at

»» article continues »» continued

reducing the housing affordability “Build-to-Rent housing is already a dilemma, examining the barriers to globally proven housing choice option supplying new homes, and outlining for people who rent their home and what governments at all levels must can be instrumental in addressing do to create long lasting solutions.” housing supply in Australia with the right policy settings,” said Mr Cooper. “Our State of the Land report last week forecast alarming shortfalls Build-to-rent assets should also be in potential housing supply with made eligible for the 15 percent a 400% increase in the rate of managed investment trusts abandoned multi-unit dwellings (MIT) withholding tax rates. across the combined capital cities, “We would also like to see a review of in the past 12 months, putting the 50% foreign ownership investment even greater pressure on the cap in new developments because rental supply market. Now it is attracting international funds is crucial even more important to introduce to improving housing supply, whilst also measures which will boost housing contributing to government tax revenue. supply and diversity not deter it. “While the highly anticipated tax “We would like to see initiatives cuts will give Australian’s more to incentivise the states by linking disposable income to immediately federal funding to state government relieve cost of living pressures, they performance on planning and do little to provide sufficient funds overall property tax reform in to improve people’s prospects of addition to meeting the required affording to purchase a home.” housing supply targets., This also includes rezoning land for higher “We will continue to advocate density housing around railway initiatives which build on measures stations or areas of high jobs to ultimately provide more certainty growth, and the development of a and efficiency within the property national process for the promotion industry that improves housing supply of build-to-rent housing. and affordability,” Mr Cooper said. Getting your customers Fixed rate loans with 100% offset plus additional repayments into the home they want up to $20K p.a. with no penalty. is satisfying. A basic loan with no monthly fees. Knowing you got them a Market leading bridging finance. loan loaded with features And that’s just the start of what we offer. takes that feeling to a Brokers, to get your customers (and yourself) to a better place, whole new level. call us on 1300 791 679 or visit brokers.adelaidebank.com.au You’ll be in a good place too.

brokers.adelaidebank.com.au

Adelaide Bank a Division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL/Australian Credit Licence 237879. (1282840-1282833)(03/19) Getting your customers Fixed rate loans with 100% offset plus additional repayments into the home they want up to $20K p.a. with no penalty. is satisfying. A basic loan with no monthly fees. Knowing you got them a Market leading bridging finance. This article is brought loan loaded with features And that’s just the start of what we offer. to you by Simon Disney takes that feeling to a Brokers, to get your customers (and yourself) to a better place, Senior Media & PR Manager, whole new level. call us on 1300 791 679 or visit brokers.adelaidebank.com.au Bendigo and Adelaide Bank BENDIGO BANK CUSTOMERS TO BENEFIT FROM INSTANT You’ll be in a HOME LOAN TIC OF APPROVAL good place too.

Some of the older hands around the REIA network may remember Simon Disney, who was National Public Affairs Manager for REIA in BENDIGO EXPRESS 2001-02. We saw his name at the bottom of a press release recently Bendigo and Adelaide Bank’s announcing the launch of an ‘instant home loan’, so we gave him a partnership with Tic:Toc allows call to catch up and find out what he’s been up to as Senior Media the Bank to offer customers a streamlined digital fulfilment and PR Manager at Bendigo and Adelaide Bank. process, bringing significant efficiencies in the way the Bank REIA Good to see you again REIA Bendigo Bank is more than can originate home loans. The Simon it’s been quite a journey. 160 years old and banking is changing automated assessment strips rapidly – so how are you changing? cost from the process and SD It certainly has! When I left REIA delivers higher responsible I took up a position as Media Manager SD Some things never change, like lending standards via inbuilt at IFSA, which became the Financial our commitment to customer service reg-tech and digital validation Services Council and after seven years excellence and feeding into community of income and expenses. there, I joined Bendigo Bank to help prosperity not off it, but our new launch its Wealth Division before Managing Director, Marnie Baker has moving across to the Group PR and tasked us all with building Bendigo Media Team a couple of years ago. and Adelaide Bank to be Australia’s It’s been fantastic and I particularly bank of choice. We’re firm believers REIA That’s a big step forward in love being able to see daily what in partnering. It’s in our DNA and how home loans are delivered. our Community Bank® network the most recent example of that is Providing customers with certainty is giving back to the surrounding Bendigo Express. Recently announced more quickly using innovative communities in which they operate. together with Tic:Toc. Bendigo technology is certainly impressive. You’ll be happy to know that we Express uses Tic:Toc’s proprietary now have Bendigo Bank partners technology to power an instant home SD Indeed. We’re committed to allowing operating in nine real estate agencies loan and makes Bendigo Bank the customers to interact with us however around the country too which is first Australian bank to offer a digital they choose, and for some, this will be fantastic for smaller communities home loan application and assessment the ability to still walk into a branch or brokers.adelaidebank.com.au no longer serviced by the big four. process under its own brand. agency and for others a preference for

»» article continues

Adelaide Bank a Division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL/Australian Credit Licence 237879. (1282840-1282833)(03/19) »» continued

phone and internet banking or even retirement savings model assumes REIA And the Adelaide Bank in a complete digital environment. that people own their own home when side of the business? Bendigo Express is another example they finish working and access their SD Adelaide Bank is our third-party of the type of innovations our Bank is superannuation, it’s vital that we get banking specialist and has been a bringing to customers as the market home ownership rates in Australia back supporter of the REIA Secretariat via leaders in customer experience. We’re up again. I don’t think I’d like to be 70 our sponsorship of the Adelaide Bank/ committed to investing in new capability and renting. Investors are being very REIA Housing Affordability Report for and innovation for our customers and cautious, many have difficulty getting several years. The team has been really making it easier for them to engage finance and other potential investors busy during December and January. In with our bank in our fast-paced world. are waiting to see the outcome of the fact, I was speaking to Darren Kasehagen Federal election. Properties that have REIA Do you still keep an our new Head of Third Party Banking been out of the reach of first home eye on our industry? while he was in recently and buyers in outer suburbs for years – are he was surprised at the level of activity SD Absolutely. I really enjoyed my now in some cases – within reach. over what is a traditionally quiet time of time at REIA and of course, we sponsor REIA Which is good news in terms year. Darren, along withwith Amanda the Adelaide Bank/REIA Housing of future ‘social security’? James, recently appointed as Head of Affordability Report – so I’m right Broker, are our ‘dynamic duo’ on the across that. My time at REIA gave me a SD Yes – but bear in mind that this Adelaide Bank leadership team and are sound understanding of the real estate market is far more likely to pit FHB’s committed to servicing the growing industry and the commitment of REIA to against FHB’s who often buy with network of mortgage brokers and improving the image and professionalism their heart – unlike investors who are mortgage managers around Australia. of the industry in the public mind and in often focussed solely on rental return Getting back to our Group commitment the eyes of our elected representatives. and capital gain and buy with their to consumer choice, there is a growing It’s important to maintain a presence head. It’s by no means ‘easy pickings’. preference for some of our customers in Canberra and to keep the lines of While investors play a crucial role in to use a mortgage broker to secure a communication open on Capital Hill – the housing sector and the economy loan and Adelaide Bank is dedicated across political lines all year round. generally, it is pleasing to see more of to servicing those who choose to go the FHB vs FHB competition playing REIA Anything catching down the mortgage broker path to out. In a pitched battle for a first your eye at present? home ownership. Adelaide Bank are home, winning the keys will often come specialists in bridging finance too, which SD I suppose the changing mix in buyers. down to a case of who is ‘first with is also something they do very well. General consensus seems to be that the finance’ between FHB’s or down-sizers. East Coast residential property markets If FHB’s find a place they love at an REIA Thanks for the update Simon, in particular are now being contested open, strike swiftly! You can read how good to catch up with you. by FHB’s VS FHB’s, rather than FHB’s VS a young woman in Victoria recently SD Likewise, always a pleasure. Investors. I see that as a positive. First used the online technology powering home buyers have been missing out our new Bendigo Express platform to for quite a few years now and when get a home loan and buy her new home you consider that pretty much every during her morning tea break here. NATIONAL NATIONAL MARKET AFFORDABILITY SNAPSHOT SNAPSHOT

EXTRACTED FROM REAL ESTATE MARKET FACTS EXTRACTED FROM ADELAIDE BANK/REIA HOUSING DECEMBER QUARTER 2018 AFFORDABILITY REPORT, DECEMBER QUARTER 2018

Quarterly Australian weighted Dec Sep Dec median house price is $733,438 2018 2018 2017 Quarterly Australian weighted median Proportion of family income to meet: other dwellings price is $570,905 Home loan repayments 31.2% 31.1% 31.6% Rent payments 24.0% 23.9% 24.5% Median house prices up: Hobart 5.8% to $502,750 NSW New South Wales had the Adelaide 0.5% to $475,000 largest increase in rental Median house stable: affordability over the quarter. Perth 0.0% to $500,000 VIC Median weekly family income Median house prices down: increased the most in Victoria (0.7%). Canberra -0.1% to $665,000 QLD Queensland had the largest decrease Darwin -0.8% to $493,750 in the number of new loans. Brisbane -0.9% to $530,000 SA In South Australia had the Sydney -3.2% to $1,062, 619 largest increase in loan amount Melbourne -3.7% to $796,500 to first home buyers. Median other dwelling prices up: WA Western Australia had 0.5 percentage Adelaide 4.2% to $359,000 point increase in rental affordability. Hobart 0.1% to $365,500 Median other dwelling prices down: TAS Tasmania had the largest rise in monthly loan repayments (7.2%). Darwin -0.7% to $350,000 Brisbane -1.2% to $400,000 NT Housing affordability improved Melbourne -1.7% to $589,000 in the Northern Territory with Canberra -1.8% to $442,000 proportion of family income Sydney -3.3% to $702, 012 required to meet loan repayments Perth -5.1% to $375,000 decreasing 1.5% percentage points. ACT The Australian Capital Territory had the largest increase in the number of loans to first home buyers (34%). 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.

Contact Aon today for a quote 1800 377 712 [email protected]

© 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 WHAT WOULD HAPPEN IF YOUR PROPERTY WAS THE NEXT OPAL TOWER?

When news broke of Sydney’s Opal Tower by having good processes in place and The Final Piece of the in late 2018, landlords and Property being vigilant about record keeping. Puzzle: Insurance Managers across Australia shared a We’ve compiled some helpful tips for collective shudder. While it’s common for both landlords and Property Managers: Putting in place these strategies can things to go wrong in a rental property help you to minimise risk, however – whether it’s a tenant skipping rent or 1. Hold regular property inspections: unfortunately it’s hard to eliminate risks causing accidental property damage These are a vital step in any property all together. Mistakes are a fact of life, – the story of cracks in this high-rise management routine, as they allow you and as we’ve seen with the Opal Tower, Have your glass residential property took the risks as a to identify any building defects or issues it’s impossible to protect your rental Property Manager to a new level entirely. and organise for maintenance and property against every possible scenario. repair of defects in a timely manner. The reality of property management That’s where Landlord insurance can today is that emerging risks are plentiful. 2. Document all inspections and help; it can provide you with some cover windows ever From the increasingly common issue of maintenance (and provide copies to for the common risks associated with poorly constructed buildings (such as in the landlord and tenant): Record the your rental property - the final piece the case of the Opal Tower), to injuries outcomes of every inspection with of the property management puzzle. to guests at an unauthorised party held a formal report such as an Entry (or been broken? at an Airbnb property or an illegal meth Exit) Condition Report that contains We’re by your side lab on a rental property…Let’s just say detailed descriptions and supporting As a real estate agent, running your own agency can be an exciting and it’s a challenging time to be a landlord. photographs. Similarly, document If you would like to learn more about any routine property inspections minimising your risk or discuss your Perhaps most devastatingly, the Opal rewarding experience, however it’s important to consider the risks that and specify any maintenance and insurance coverage, please contact Aon. Tower situation has revealed to us first- repairs that occur to the property. come with it. hand the damage that can be caused when »» Aon has taken care in the production of this landlords are not appropriately insured. 3. Formalise any agreements in article and the information contained in it has Ask yourself: As owners of Opal Tower apartments writing: If an issue or dispute been obtained from sources that Aon believes have been frantically chasing tenants for arises, written documentation will to be reliable. Aon does not make any • Have you ever lost or damaged your work phone or laptop? representation as to the accuracy of the rent – tenants who are not actually able be critical to support or negate a information received from third parties and is • Have you ever had water damage to your premises? to live in the building while cracks are claim, so it pays to take the time unable to accept liability for any loss incurred present – the value of landlord insurance to keep clear notes to document • Has a client ever injured themselves at your business premises? by anyone who relies on it. has become increasingly visible. any discussions or agreements. The information contained in this article is Accidents and mistakes can happen, so it’s helpful to have business insurance cover in place to So, what can you do to ensure you’re 4. Try to document all correspondence general in nature and should not be relied on protected against whatever risks might via email: If verbal instructions are help foot the bill, so you can continue to run your business and reduce financial loss. as advice (personal or otherwise) because face you and your properties? given, create a file note to clearly document the discussion and include your personal needs, objectives and financial situation have not been considered. So before the date and time for when it took deciding whether a particular product is right Protect against the common place. Try to re-use words if possible. and emerging risks for you, please consider the relevant Product Contact Aon today for a quote 5. Keep your Property Management staff Disclosure Statement or contact the Aon team There are a number of obvious things up-to-date: If you manage a Property on 1300 734 274 to speak to an adviser. that landlords and Property Managers Management team, ensure that you Aon Risk Services Australia Limited 1800 377 712 can do to reduce risks, like screening provide induction for all new staff on | ABN 17 000 434 720 | AFSL 241141 [email protected] tenants, monitoring rent collections agreements, policies and procedures, and ensuring that bonds are lodged continually update them with any new correctly. But what’s often overlooked changes and hold regular refresher © 2019 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141. is the importance of keeping up-to-date training to reinforce adherence. 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 2019

MELBOURNE 22-24 OCTOBER FEDERATION SQUARE Further details coming soon. INDUSTRY UPDATE Industry news from around Australia

Federal incentives required Transactional activity has declined activity and the housing supply,” she said. to help states and territories significantly in Western Australia in “Our modelling that shows Labor’s abolish stamp duty recent years, with the number of annual policy will reduce the number of new property sales falling from over 71,000 homes by up to 42,000 and deprive the REIWA is calling for all political parties in 2013 to less than 40,000 in 2018 – the economy of up to $11.8 billion worth of contesting the federal election to commit lowest level of transactions since 1990. building activity,” Denita Wawn said. to funding research to help assist each “Significantly fewer property sale “Master Builders Forecasts tell us 2019 state and territory phase out stamp duty. transactions has meant significantly that we need 62,000 new homes built REIWA President Damian Collins said stamp less stamp duty revenue for the WA each year to meet the community’s duty was an inefficient tax and one of the Government. By abolishing stamp duty demand for housing,” she said. biggest imposts to home ownership. altogether and implementing a broad- “We need all incentives for investment “While we recognise stamp duty reform based land tax system, the cost of on the table rather than taking away MELBOURNE 22-24 OCTOBER needs to come at a state level, it does property taxes would be spread across incentives from one part of the market require assistance and support from the many years creating a steady stream of to prop up another,” Denita Wawn said. Federal Government. REIWA has long since reliable income for state and territory “This is just robbing Peter to pay FEDERATION SQUARE advocated for the abolishment of stamp governments,” Mr Collins said. Paul,” Denita Wawn said. duty, recommending instead that WA move “It would also remove the upfront Source: Master Builders Australia Further details coming soon. towards a broad-based land tax system. financial burden from home buyers, “We’re calling for all federal political helping to make home ownership parties to commit to providing funding a reality for more Australians.” for states and territories to undertake a Source: The Real Estate Institute full feasibility study into how phasing out of Western Australia stamp duty could be achieved, if elected. “Stamp duty is a significant hurdle All Housing Investment Incentives for home buyers impacting greatly on Need To Be On The Table housing affordability. Most buyers are not in a position to have surplus funds “Master Builders Australia welcomes to cover the upfront cost of stamp duty. the announcement of Labor’s Build Instead, they are forced to borrow this to Rent tax concessions that will amount on top of the loan amount, encourage institutional investment amortising the stamp duty cost across in housing and boost residential the whole life of their mortgage. building activity,” Denita Wawn, CEO “Not only does this hinder affordability, of Master Builders Australia said. it also impacts the ability for households “However, Labor’s announcement that to make appropriate housing decisions in its increase of capital gains tax and accordance with their lifestyle choices, restrictions on negative gearing will start changing needs or economic reasons from 1 January 2020 does nothing to allay like employment,” Mr Collins said. concerns about the impact on building POLITICAL WATCH Information and news from government

Dwelling approvals rise in February New government an opportunity legal complexity. These range from for property reform tattoo parlours, second hand dealers, A rise in building approvals for apartments hairdressers and tow truck drivers. and townhouses has driven a 0.4 per The REINSW congratulates Gladys “Our homes are the most valuable cent increase in the total number of Berejiklian on winning the NSW State and psychologically important assets dwellings approved in Australia in election and calls on the new Government February 2019, in trend terms, according many of us own. Property transactions to deliver much needed property to data released by the Australian demand well educated, experienced and industry reform, initially moving property Bureau of Statistics (ABS) recently. dedicated specialist,” Mr McKibbin said. services out of NSW Fair Trading. “Building approvals for private dwellings “The industry similarly requires the excluding houses rose 2.6 per cent Tim McKibbin, CEO of REINSW, said support of a specialist Property Services in February.” said Justin Lokhorst, consumers and the industry would be Commissioner, who like the Legal Director of Construction Statistics better served by a Property Commissioner Services Commissioner, has industry at the ABS. “Meanwhile, private who would take a solitary focused and experience and expertise and can houses fell a further 0.8 per cent”. wholistic view of real estate, planning who work cooperatively with industry Among the states and territories, total and consumer protection legislation. to raise industry standards, improve dwelling approvals rose in February in New “Under NSW Fair Trading, the property consumer protections, advise on South Wales (3.1 per cent) and Western services industry has suffered from a property taxes and remove the red tape Australia (2.0 per cent), in trend terms. Falls misguided policy of competition at any that plays such a large part in making were recorded in the Northern Territory cost, which has lowered barriers of entry property so unaffordable in NSW.” (6.5 per cent), the Australian Capital by reducing the education requirements Real estate is a $107 billion industry Territory (6.3 per cent), Queensland (2.0 per to become an agent. This ill-conceived annually in NSW – bigger than mining, cent), South Australia (1.1 per cent) and policy exposes consumers to identifiable retail and tourism combined. Victoria (0.8 per cent). Tasmania was flat. and unnecessary risk,” Mr McKibbin said. Mr McKibbin urged the Gladys Declines in approvals for private houses Berejiklian Government to take a were recorded in New South Wales “Real estate practice is not easy. Real positive step to improve the lives of (2.0 per cent), Victoria (1.1 per cent) and estate agents manage high-value NSW property owners and tenants. Queensland (0.8 per cent), while increases transactions of significant legal complexity were recorded in South Australia (2.0 per that occur infrequently for most property “We’re seeking better regulation – not cent) and Western Australia (0.5 per cent). owners – it’s a very stressful time. Despite self-regulation – and higher standards In seasonally adjusted terms, total the acknowledged complexity, under the for the property services industry. dwellings rose by 19.1 per cent in February, standards set by NSW Fair Trading, it is NSW Fair Trading does not have the largely driven by rises in Victoria (37.3 per possible to pretty much walk off the street industry skills and experience to cent) and New South Wales (25.2 per and put yourself forward as an agent.” support such a dynamic industry.” cent). Private dwellings excluding Mr McKibbin said most property Source: The Real Estate Institute houses rose 64.6 per cent, while private owners would be shocked to know of New South Wales houses decreased by 3.6 per cent. that the education required by Fair The value of total building approved rose Trading to become an agent, can 1.3 per cent in February, in trend terms. be completed in four days. The value of non-residential building rose 1.9 per cent, while residential NSW Fair Trading squeezes the regulation building increased 0.8 per cent. of property services in amongst 40 other different trade and service Source: The Australian Bureau of Statistics providers which are all low-value, high- frequency transactions of minimal FIABCI

S A V E T H E DATE

THE WORLD Property news from around the world

Homes sales rebounded ‘For sustained growth, significant by 5.2% to $468,350, while the strongly in the US in February, construction of moderately priced homes number of newly listed homes were latest agent index shows is still needed. More construction will down by 3.2% on a monthly basis. help boost local economies and more The index report points out that the Existing home sales in the United home sales will help lessen wealth national average price is heavily skewed States rebounded strongly in February, inequality as more households can enjoy by sales in Greater Vancouver and the recording the biggest month non month in housing wealth gains,’ Yun pointed out. Greater Toronto Area, two of Canada’s gain since December 2015 with a rise A breakdown of the index figures most active and expensive markets. of 11.8%, the latest index shows. shows that sale in the Northeast were Excluding these two markets the national But sales in this sector are still down by unchanged month on month and up average price was just under $371,000. 1.8% year on year while prices are still 1.5% year on year with a median price of It means that sales activity was almost rising, up 3.6% year on year to $249,500, $272,900, up 3.8% from February 2018. 12% below the 10 year February the 84th month in a row that there has In the Midwest, sales rose 9.5% month average. In British Columbia, Alberta been annual growth, according to the data on month, more or less unchanged as well as Newfoundland and Labrador, from the National Association of Realtors. February 2018 with a median price of $188,800, which is up 5.4% year on year. sales were more than 20% below their Lawrence Yun, NAR’s chief economist, 10 year average for the month. credited a number of aspects to the Sales in the South increased by 14.9% jump in February sales. ‘A powerful on a monthly basis but are own 0.4% ‘February home sales declined across combination of lower mortgage rates, year on year with a median price of a broad swath of large and smaller more inventory, rising income and $219,300, up 2.5% from a year ago. In Canadian cities. The housing sector higher consumer confidence is driving the West sales increased strongly by is on track to further reduce waning the sales rebound,’ he added. 16% month on month and were up 7.9% Canadian economic growth,’ said Gregory year on year with a median price of Klump, CREA’s chief economist. Total housing inventory at the end of $379,300, up 3% from February 2018. February increased to 1.63 million, up ‘Only time will tell whether successive from 1.59 million existing homes available Source: PropertyWire.com changes to mortgage regulations went too for sale in January, a 3.2% increase from far, since the impact of policy decisions 1.58 million a year ago. Unsold inventory is becomes apparent only well after the fact. Canadian home sales fell Hopefully policy makers are thinking about at a 3.5 month supply at the current sales sharply in February pace, down from 3.9 months in January how to fine tune regulations to better keep but up from 3.4 months in February 2018. Sales in Canada fell by 9.1% month in housing affordability within reach while keeping lending risks in check,’ he added. Properties remained on the market month in February and are 4.4% below for an average of 44 days in February, where they were in the same month in The index also found that there were 5.7 down from 49 days in January but 2018, the latest agent figures show. months of inventory on a national basis up from 37 days a year ago and 41% The data from the Canadian Real Estate at the end of February 2019, a three of homes sold in February were on Association (CREA) also shows that and a half year high and a little above the market for less than a month. average house prices fell nationally its long term average of 5.3 months.

»» article continues THE WORLD Property news from around the world

»» continued That said, there are significant regional Estate agents fees in Europe of it when it comes to justifying their differences. The number of months of are cheapest in the UK fees, with the predominant opinion inventory has increased far above its long being that they charge to much for the term average in Prairie Provinces and New research has found that home sellers service provided,’ said Colby Short, Newfoundland and Labrador. As a result, in the UK pay much less in estate agent GetAgent’s chief executive officer. homebuyers there have an ample choice of fees than other countries in Europe, and ‘This really isn’t the case and as this listings available for purchase. By contrast, appear to pay less than anyone else. research shows, the UK is actually home the measure remains well below its long Although there can be a lot of criticism to the lowest estate agent fees in the term average in Ontario and the Maritimes. about the fees charged, particularly EU and therefore you could argue, the Trends continue to vary widely among by High Street agents, an analysis best service as well. Of course, the price the 17 housing markets tracked by the shows that the UK is the cheapest of property means there is a degree index, a breakdown in the figures show. in Europe with owners paying an of relativity and the 6% commission Results remain mixed in British Columbia, average of 1.2% of the sale price. you might pay in Romania will be a lot with prices down on a year on year basis lower due to the lower cost of getting This is lower than all other European in Greater Vancouver by 6.1% and the on the ladder,’ he pointed out. countries, with the next cheapest 1.25% Fraser Valley by 2.8%. By contrast, prices in Denmark and 1.75% in Ireland, the only ‘However, this can also be said for the increased by 3% in Victoria and were up nations where owners pay under 2%. At earning potential available and while 7.7% elsewhere on Vancouver Island. the other end of the scale, home sellers we aren’t comparing apples for apples Prices were up from year ago levels in in Romania are paying 6% commission. in a monetary sense, we wanted to Guelph by 6.8%, in the Niagara Region highlight that actually, the fees charged by 6.5%, in Hamilton-Burlington by 5% The analysis from estate agent comparison in the UK are, and have historically and the Greater Toronto Area by 2.3%. site GetAgent also found that among the been, very low,’ he explained. cheapest are Greece at 2%, Lithuania By contrast, home prices were up by just ‘So while you consider if three to four at 2.25% and Spain at 2.75%. Belgium, 0.2% in Oakville-Milton, while in Barrie thousand pounds is a justifiable spend Croatia, Estonia, Luxembourg, the and District prices b=fell by 4.3%. when selling a property for hundreds of Netherlands and Poland all come in at 3%. Across the Prairies, supply is historically thousands, remember you could be paying elevated relative to sales and home prices Fees are 3.5% in Austria, and 3.75% upward of ten thousand if you were to were down from year ago levels. Prices were in Finland, while they are 4% in Czech live in another area of Europe,’ he added. Republic, Latvia, Hungary, Portugal, down by 4.4% in Calgary, 4.5% in Edmonton, Source: PropertyWire.com 5.1% in Regina and 3% in Saskatoon. The Slovenia and Sweden. They come in report says that the market it likely to at 4.5% in Germany, Slovakia and Italy remain weak in these cities until demand and 5% in France, Cyprus and Malta. and supply come back into better balance. If there was a 6% fee in the UK, on Home prices rose 7.4% year on year in the current average house price of Ottawa, by 6.2% in Greater Montreal £228,147 it would result in a commission and by 1.6% in Greater Moncton. payment of almost £14,000. Source: PropertyWire.com ‘I think it’s fair to say that estate agents in the UK have a tough time REIANEWS

IS A PUBLICATION BROUGHT TO YOU BY THE REAL ESTATE INSTITUTE OF AUSTRALIA. FOR FURTHER INFORMATION ABOUT ADVERTISING, PLEASE CONTACT REIA ON 02 6282 4277 OR AT [email protected]

16 THESIGER COURT, DEAKIN ACT 2600 02 6282 4277 I WWW.REIA.COM.AU