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REIA Home > What's New 
COAG approvals reform The COAG agreement will see Housing Development Assessment streamlined by: • Increasing the use of code-based assessment, with a target for increase to be set later this year, by making and harmonising codes for houses, units and commercial developments; and • Measuring performance according to the number, type and length of DA, with publication of a report in June 2010. To view the government’s communique, click here. Nearly 100,000 take up FHOG Boost New figures show that May saw the highest take-up so far of the First Home Owners Grant Boost (FHOG Boost)– 19,607. The FHOG Boost, combined with lower interest rates, has brought close to 100,000 first home buyers into the market.
ABS Housing Finance for April showed the number of loans for owner occupiers increased for the seventh consecutive month. First home buyers made up 28.0 per cent of all new loans for owner occupation – the highest level since the ABS began collecting this data in 1991.
Analysis of recent ABS data on employment trends shows that employment in construction increased by 10,000 in seasonally adjusted terms in the three months to May 2009. The table below shows the breakdown of the uptake across the states and territories.
2009 Property Investor Survey: Mortgage Choice In the 2009 Property Investor Survey Mortgage Choice has discovered that three out of four Australians planning to buy an investment property in the next two years are waiting until the First Home Owner’s Grant Boost (FHOG Boost) expires. 76% of respondents said they were delaying purchasing an investment property until after 31 December 2009. Of those looking to purchase an investment property, 44% of respondents were Generation X, 27% were Generation Y and 28% were Baby Boomers. For more information on the survey, click here.
Mortgage Choice: Tax Returns Benefits for Borrowers Mortgage Choice: With less than three weeks until the end of the financial year, existing and potential mortgage holders still have time to implement tax strategies to save money. Senior corporate affairs manager for Mortgage Choice, Kristy Sheppard said, “Mid-year is a great time for borrowers, or those looking to purchase property, to utilise any tax savings to reduce debt and/or increase their borrowing power.” “For example, investors can make a number of taxable deductions for rental property expenses including, but not limited to, advertising costs, agent fees, body corporate fees, council rates, gardening, pest control, repairs and maintenance, water charges, bank charges and even loan interest,” she said. To view the full release issued by Mortgage Choice, click here.
2009 Virgin Blue National Small Business Summit
More than 300 people are expected to attend the one-day Summit, to be held at Melbourne’s Sebel Albert Park Hotel on Wednesday June 10. The Prime Minister, Kevin Rudd will address the Gala Dinner to be held on the evening before the one-day Summit which has become the premier event on the small business calendar. This will be an outstanding opportunity to learn from top-ranked experts in:
For more information on the Summit, click here. Taxation review
The submission identifies state taxes, such as property taxes, as inefficient and calls for their replacement in a reform of the taxation system. Property taxes are seen as volatile and unreliable revenue sources; difficult and costly to administer; an impediment to business efficiency, and; inequitable. Their replacement would provide long-term economic gains. To view the submission, click here.
Update on National Licensing
For the real estate industry the system will commence in July 2012 and will ensure that licenses issued by the national licensing body will allow practioners to operate in all Australian jurisdictions. The governance arrangements including the composition of the Ministerial Council and Occupational License Advisory Committee is based on the model proposed by the REIA which was developed with the assistance of the State and Territory REI’s. An appointment process for the Advisory Committee for the real estate industry will commence shortly with REIA’s involvement. To view the relevant document, click here.
REIA Score Major Victory for Real Estate Agents The President of the Real Estate Institute of Australia (REIA), Mr Noel Dyett has welcomed the decision to exempt real estate agents trust accounts from the Commonwealth Government’s Guarantee Scheme for Large Deposits and Wholesale Funding (Scheme). Under the Scheme, which was introduced in November 2008 for a three year period as part of the Government’s response to the global financial crisis, deposits with eligible financial institutions with balances in excess of $1 million are subject to a fee. The fee varies from 0.7% to 1.5%. With around $1 billion held in trust by agents for buyers and sellers at any one time and with the majority of Australia’s real estate agents having trust accounts in excess of $1 million, the cost to the industry and the individual agent is significant. In the case of real estate agents this cost cannot be offset against interest earned as all interest accrued on trust accounts is automatically transferred to the state and territory governments. Agents already bear the costs of operating these accounts without receiving interest to offset costs. For an agent with an average of $2 million held in a trust account this is a cost of $10,000 per year. The fee waiver will commence from 1 April 2009. It will be implemented on a blanket, rather than an opt-in, basis by authorised deposit-taking institutions (ADIs) - there will be no need for members of the Real Estate Industry who hold eligible guaranteed accounts to take action to receive the waiver. The waiver will not be retrospective. For information, the process for ADIs to apply for the waiver is set out in the guidance note. To view the guidance note, click here. A list of sample accounts has also been developed, to view, click here. The exemption applies to accounts which are: • deposit accounts which are required by a law of the Commonwealth, a State or a Territory to be established and maintained by a party (the account-holder) for the purpose of holding monies on trust for another party or parties; where
Since the introduction of the Guarantee Scheme the REIA has made a number of representations to the Government to exempt real estate agents’ trust accounts. The exemption will be a major cost saving over the next three years for agents and consumers across Australia.
Taxation Update - Tax Office Response to Natural Disasters
Taxation Update - Reform to Income Tests The changes do not effect what is taxable income but may impact on benefits or a tax offset a person may receive. As of 1 July 2009 the following additional components will be added to Adjusted Taxable Income: total net investment losses; net financial investment losses, and; reportable super contributions. The biggest obligation for employers will be for reportable employer super contributions. These are generally contributions such as salary sacrifice that exceed the minimum amount the employer must pay. Employers will need to show the sacrificed amount on the employees payment summary. Employers must keep records in enough detail to; report each individual’s reportable employer super contribution on the payment summary and; to provide accurate information to an employee if they seek to know what their total reportable super contributions are at anytime. Once the legislation receives Royal Assent details of the changed will be available on the Tax Office website at www.ato.gov.au. Delays Mean First Homebuyers May Miss Out With no indication from the Federal Government regarding a First Home Owner Boost extension and a number of lenders feeling the challenge of larger application volumes, it could be expected that delays in application responses from some lenders may increase in the lead up to the 30 June 2009 deadline. To view the full media release, click here. Emergency summit of bankers and small business REIA CEO attended the emergency summit of bankers and small business hosted by Small Business Minister, The Hon. Craig Emerson. The detail provided REIA with the substance to identify specific areas of concern in regards to small business banking and ensured that the Minister for Small Business, The Hon. Craig Emerson (who convened and facilitated the Round Table) had the opportunity to hear the Real Estate Industry’s concerns. Issues identified for REIA to present at the summit included: • Volume of Credit At the conclusion of the Round Table the Minister released a Communiqué, to view this document, click here. To view the media release, click here. As a result of the meeting the Minister has also established a small business complaints clearing house to allow his office to receive complaints about access to and cost of bank finance. The Minister will pass this information onto the Australian Bankers Association (ABA), the ABA will in turn forward these issues onto senior management in the relevant bank for action and follow up. Further complaints on this issue can be forwarded to smallbusinesscredit@innovation.gov.au. For more information, contact Neil Fisher at neil.fisher@reia.com.au or phone (02) 6282 4277. Small Business and General Business Tax Break On 25 February 2009, the Treasurer released an exposure draft of the Tax Laws Amendment (Small Business and General Business Tax Break) Bill 2009 and associated explanatory material. The Small Business and General Business Tax Break was announced on 3 February 2009 as part of the Government’s Nation Building and Jobs Plan. The Tax Break will provide a temporary 30 per cent investment allowance to small businesses for eligible capital investments of $1000 or over, and for other businesses for capital investments of $10,000 or more. To view the draft, click here. Treasury has also produced a series of frequently asked questions about the Tax Break. Interested parties are invited to comment on the exposure draft legislation and explanatory memorandum. For more information, click here.
REIA calls upon the real estate industry to give generously to the Bushfire Appeal REIA President Noel Dyett has called on real estate agents around Australia to open their hearts and wallets to the plight of the victims of the Victorian bushfires. Mr Dyett is based in Bendigo, which experienced its worst fire damage in living memory. “I call on all real estate agents and people employed in our profession around Australia to give generously to the Red Cross Bushfire Relief Appeal fundraising which can be done through the Real Estate Institute of Victoria Charitable Foundation”, said Mr Dyett. If you would like to donate to the REIV Charitable Foundation for the Bushfire Appeal, click here. To view the media release, click here. REIA management attends forum on a national strategy for energy efficiency On Friday, 30 January, REIA management attended a forum to discuss the establishment of a National Strategy for Energy Efficiency (NSEE) in residential and commercial buildings. Energy efficiency measures provide the opportunity to achieve significant greenhouse gas emission reductions at relatively low cost. For example, the International Energy Agency (2008) has estimated that energy efficiency improvements – predominantly in buildings, appliances, transport and industry – represent the largest and least costly abatement opportunities, finding that improvements in energy efficiency involving low cost or net-cost savings over time are projected to provide more than a third of the reductions in energy-related emissions required to reduce total global emissions by 50 per cent from current levels by 2050. Residential stationary energy use accounts for around 10 per cent of national greenhouse gas emissions. Despite recent improvements in energy performance requirements for new houses, emissions in this sector have risen by 45 per cent over the period 1990 to 2005. This is due to a range of factors, including the increasing size of new homes (higher lighting, heating and cooling demand), reduction in the number of people per household (increasing the number of houses for a given population) and increasing ownership and use of energy consuming appliances. Several non-price market barriers have been identified which prevent the uptake of cost effective energy efficiency measures in the residential sector, such as split incentives (e.g. homebuyer-builder or tenantlandlord) and information barriers. The commercial buildings sector represents an important focus for energy efficiency and greenhouse gas abatement due to the rapid growth in this sector and the significant technical and economic potential that exists for emissions reduction. Stationary energy consumption in commercial buildings also accounts for around 10 per cent of Australia’s greenhouse gas emissions. Commercial buildings include both office buildings and other non-residential buildings such as shops, car-parks, warehouses, hospitals and schools. The REIA will continue to monitor the situation, for further information please contact stephen.wilkinson@reia.com.au.
The Government's Stimulus Package: areas of interest for the real estate industry As part of the Government’s Stimulus Package announced at the start of the the week, 20,000 new social housing dwellings will be constructed to provide much-needed accommodation for low income earners and those who are struggling with the private rental market. The program will also provide the funds needed to upgrade approximately 2,500 vacant social houses. For more details on the National Building Investment, click here (pdf-99kb). Insightrix Research survey results In 2007, the REIA contracted Insightrix Research to conduct an online survey of real estate agencies in Australia to inform lobbying activities and provide business benchmarking for its members. In February last year, a copy of the executive summary was forwarded to all those who participated in the survey in 2007. The results of the 2008 survey are now available and a copy of the executive summary has been forwarded to all those who participated. To view the results from the 2008 survey, click here (pdf-152kb).
FIABCI Asia Pacific Regional Secretariat Summit FIABCI, the International Real Estate Federation, are hosting the 8th FIABCI Asia Pacific Regional Secretariat Summit in Malaysia. Details for the event are below: Date : Friday, 27th – Saturday, 28th March 2009 To see the full agenda for the event, click here (pdf-48kb). To download a copy of the registration form, click here (pdf-83kb).
Australian Taxation Office - Getting the tax bonus to you
Mr D’Ascenzo commented that the Tax Office believes most eligible people won’t have to do anything to receive the proposed payment, however, to ensure money goes into the right bank account or the cheque is delivered to the correct address in early April 2009, people should contact the Tax Office by the middle of March if they need to change address or bank details. The proposed tax bonus will only be paid to those who have their 2007-08 return in by 30 June 2009. To see the full media release, click here (pdf-39kb). REIA represents Australasia in NAR publication The Real Estate Institute of Australia has represented the Australasian Real Estate Industry the National Association of Realtors (NAR) internationally distributed publication, Global Perspectives. The article focuses on the REIA and REINZ’s Focus Group Trends Reports and the challenges that face the real estate industry in Australia as well as To view the full article published in Global Perspectives, click here (pdf-1.6mb). To view the REIA’s Focus Group Trends Report, click here (pdf-4mb).
Local impact of the global economic crisis (story courtesy of Aon) Australia's unemployment rate hit 4.5 per cent in December, with nearly 44,000 full time jobs lost over the month. As these figures indicate, the global economic crisis is very much hitting home in Australia. So what does this mean for you? No doubt agencies are already experiencing the effects of the economic downturn both on the rent roll and sales. As your Real Estate Institute’s insurance partner, Aon has received some pertinent questions and concerns that we would like to share with you. Impact on your business As sales stagnate, many principals are looking at ways to cut costs and insurance usually comes up as a candidate for downsizing. However, rather than a luxury item to be indulged in when business is good, insurance is never more important than during difficult times. By now, you would be familiar with the two types of insurance we recommend for all real estate agencies – professional indemnity and office. Protect your professional reputation Professional indemnity for real estate agents generally covers claims relating to allegations of professional negligence such as misrepresentation of the features of a property listed for sale or property damage; or bodily injury claims arising from the management of a rental property where there are allegations of professional negligence. As you can imagine, in tough economic times such as these, there will be people who struggle to make their mortgage repayments or need to invest more in the property than they anticipated. The real estate agent who sold them the property can become an easy target as they look for someone to blame. Rather than cutting your spend on insurance, now is a good time to review the limits for which you are insured to make sure that your policy will be enough to defend your reputation, your business and your assets should you require it. Office insurance There are two parts to office insurance: the office itself and the contents. Agencies leasing their premises may not be responsible for the building, but the contents of your office are most certainly your concern. This includes all the computer equipment, furniture and any other valuables kept in the office. We always remind our clients that it is critical to insure your contents for their full replacement cost. Another aspect of office insurance is the cost to keep your business running following damages to the premises. For example, if storm damage forces you to relocate temporarily, you may find yourself faced with an array of additional costs you have not anticipated, such as rental of temporary offices and placement of advertisements in the local newspapers and a mail out to tell your customers and suppliers where you have moved to. It is a good risk management practise to plan what you would do to get your business back up and running following damage. Cost out the recovery expenses and consider if you have sufficient insurance cover or would this become a business expense? Impact on your clients The new economic climate increases the risk that once 'rock solid' tenants could face unemployment, pay cuts or other job uncertainties. All of which could affect their ability to pay the rent. Late or unpaid rent places considerable strain on landlords, not to mention the cost of cleaning up after tenants who take off without notice. You’ll be pressured to chase delinquent tenants and find replacement tenants while landlords will look to save money through reduced commission and potentially transfer losses by raising a professional indemnity claim against you. Unpaid rent equals no commission for you, directly reducing your bottom line. Landlords’ insurance is specifically designed to assist landlords recover the cost associated with a ‘bad’ or delinquent tenant. A basic policy is as affordable as a couple of cups of coffee per week and provides many benefits including rent default, malicious damage and deliberate and intentional damage. A landlords’ insurance policy will provide not only protection of your clients’ assets – it will assist in ensuring your commission and discharging your duty to your client.
First Home Owners Incentives, Explained The State and Commonwealth Government’s provide first home buyers with a range of incentives aimed at making purchasing a home more achievable. However, there is a lot to know and incentives vary for each state and territory. REIA has made it easy with this brief overview of what is available across all the states and territories. To access the full paper, click here. (pdf -47kb) To access Figure 1.1 from the paper, click here. (pdf -41kb) To access Figure 1.2 from the paper, click here. (pdf -40kb)
Changes to Foreign Investment Arrangements The Australian Government announced changes at the end of 2008 to its foreign investment arrangements for purchases of residential real estate by foreign persons. Changes to the arrangements are aimed at reducing delay and easing compliance costs for Australian vendors and their agents, the building industry and foreign persons purchasing real estate. The changes will come into effect progressively, however should be fully operational in late February. The changes that are currently in effect are:
To view a full summary of changes, click here. (pdf - 35kb) For more information about the changes, visit www.firb.gov.au/content/policy.asp
Commonwealth Government Pre-Budget Submission REIA Management prepared a Pre-Budget Submission to the Commonwealth Government proposing reviews to two schemes introduced by the Australian Government in 2008, the Guarantee Scheme for Large Deposits and Wholesale Funding (Scheme) - to exempt real estate trust funds and the Boost to the First Home Owners Grant - to assess its effectiveness prior to its proposed cessation in June 2009. To access the submission, click here. (pdf -53kb)
ATO Presentation regarding superannuation The ATO has produced a paper regarding ‘superannuation and everything small business needs to know’. To access the submission, click here. (pdf -107kb)
REIA Key Calendar Dates REIA Management has prepared a calendar of key event dates for 2009. For more information, contact Elena Ghatt at elena.ghatt@reia.com.au To access the document, click here. (pdf -86kb)
ABS data gives mixed picture of Australian Housing Market The Australian Bureau of Statistics has recently released its figures on Building Approvals and Housing Finance for November 2008. The figures are of particular interest because they constitute the first full month of data to be released following the Boost to the First Home Owners Grant (FHOG), and interest rate cuts implemented by the Rudd Government and Reserve Bank, in the wake of the global financial crisis. On the surface, things look very promising as Housing Finance data shows that the number of new loans issued for the purchase of new and established dwellings increased during November. In particular, the number of first home buyers increased to 11,665, compared with 9,901 in the previous month, while the number of loans issued to non-first home buyers for the purpose of owner/occupier also increased 6.1% over the month. Both of these figures would point to increased demand and activity in the housing market. The one sobering point in the Housing Finance data is that the total value of loans issued for the purpose of investment housing, decreasing 6% in November, and 27% when compared to the same month last year. There have been a number of incentives offered to lure first home buyers back into the market, but so far nothing has really been done to lure investors. Many Australians are re-assessing their finances in the wake of huge losses in financial markets and are unlikely to make any large investments in the near future without motivation. Building approvals for November 2008 decreased in every State in Australia with the exception of the Northern Territory. On a seasonally adjusted basis, total dwelling units approved fell 12.8% in November, and 34.7% when compared to November 2007. Approvals for private sector other dwellings fell 21.9% over the month, and 50.7% when compared with November 2007. Approvals for Private sector houses fell 9.7% over the month, and 27.0% when compared to November 2007. As you can see, the data provided presents a very mixed picture of the Australian housing market. There is increased demand and activity reflected in the numbers of new loans issued to first home buyers and owner/occupiers, but that demand has so far not translated into building activity as development applications can take some time to be approved. The decrease in investment housing finance is of particular concern as vacancy rates in capital cities remain at record lows, and with the situation unlikely to improve anytime soon rental affordability will continue to deteriorate in 2009.
The Real Estate Trends Focus Group 2008 Report
The Real Estate Trends Focus Group report provides priorities and a commentary on key industry trends including shifts in the housing market, innovative technology, new consumers, new employees and significantly, now to build a sustainable real estate business. To access the report, click here. (pdf ~4Mb) Financial Literacy Foundation keeping educators up to date The Financial Literacy Foundation is keeping educators and trainers up to date with financial literacy information through its regular newsletter. To access the latest edition, click here. Comply with Do Not Call Register Act or face penalties Real estate agents have been advised by the Australian Communication and Media Authority (ACMA) to ensure they comply with the Do Not Call Register Act 2006 or they are likely to face penalties. Since 31 May 2007, when the Act took effect, it has been unlawful to make a telemarketing call, or cause a call to be made, to a telephone number entered on the Do Not Call Register. To enable businesses to comply with the Act, a ‘washing’ service is in place which allows businesses to compare their calling lists against the Register and identify which numbers they can and cannot call. ACMA advises that real estate agents cannot rely on ‘washed’ data lists purchased from external providers. Real estate agents should wash any calling lists they use themselves, within the 30 days prior to the call being made. This can be done at: donotcall.gov.au Calls may only be placed to phone numbers which are not registered on the Register. With advice from REIA, ACMA has developed guidelines for the realestate profession on the Do Not Call Register, to obtain the guidelines, click here. REIA Real Estate Market Outlook Two distinct markets emerged during 2007 as housing prices continued to rise across much of Australia. In the first home buyer market, declining affordability, now at its lowest point in 22 years, is having a major impact. Buyer numbers have fallen, with first home buyer loans only representing 17.7% of total loans in September 2007, compared with the longer term average of 20%. There is a second healthier market for established buyers and investors who are able to leverage equity and higher incomes to cope with the increasing median prices for both houses and other dwellings, although September quarter housing finance data showed some market caution in an environment where an interest rate rise was anticipated. Investors will be attracted by improving yields as rents rise owing to tight vacancy rates across the country, although interest rate rises will also impact on yields. For a more detailed look at the 2008 Real Estate Market, please click here. Australian Property Market Indicators Anti-money laundering: REIA, Deloitte to work together
Deloitte Australia is pleased to become an official sponsor of the REIA. We will use our experience and expertise in Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) to keep REIA members informed of legislative developments and their impact. For more information, click here. Deloitte Australia is a member of Deloitte Touche Tohmatsu, one of the world’s leading professional service firms. We are a leading provider of AML/CTF advisory services, online AML/CTF compliance training, innovative tools and compliance programs. Our online AML/CTF service AMLcheck™ is specifically designed to help small and medium sized businesses meet key AML/CTF compliance obligations at an affordable price. For more information about Deloitte and our AML/CTF services, please click here. REIA honours leading members Associates of the Real Estate Institute (AREI) Fellows of the Real Estate Institute (FREI) Instalment warrants Residential tenancy databases New Australian Pay and Classification Scale for real estate agents What can be done to make housing more affordable? The Small Enterprise Telecommunications Centre Ltd (SETEL) has released a Guide to VoIP REIA signs strategic alliance with First National Real Estate 
General insurance. REIA launches National Principles of Conduct REIA Guidelines WorldProperties.com gets a new face
An annual membership fee of $150 will provide Real Estate Institute members access to the 60 country membership of the International Real Estate Federation (FIABCI). Click here for more information. Industry news - free to your desktop, every fortnight. Real Estate National Update is the REIA's free fortnightly e-newsletter, containing industry news and information on the Australian property market. For a free subscription,click here. |
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