INTRODUCING REIWA.COM AGENTFINDER - REIWA calls for State Government to encourage buyer activity
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#75 MARCH 2016 OFFICIAL PUBLICATION OF THE RE AL ESTATE INSTITUTE OF WESTERN AUSTR ALIA INTRODUCING REIWA.COM AGENTFINDER +PLUS REIWA calls for State Government to encourage buyer activity A challenging year ahead for WA property market New reiwa.com advisory board
CONTENTS
contents
U P F R O N T N E WS
President’s Address 4
Message from the Chief Executive Officer 6
A challenging year ahead 8
Vacancy glut in office markets 10
Retail markets strong despite challenges 11
New planning guidelines for Swan Valley 12
Archives want more for centenary year 13
REIWA supports Community REInvest for third year 14
A DVO C AC Y & P O L I C Y
REIWA budget submission targets transfer duty 18
Cutting red tape for real estate agents 21
Changes to Australia’s foreign investment framework 22
Progress in strata title reform 24
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R E I WA .CO M New advisory board for reiwa.com 28 Boost your listings with a Feature Property 29 Introducing reiwa.com AgentFinder 30 Successful second year partnership with Perth Scorchers 31 TRAINING New training website launched 32 MEMBERS Social snaps 36 REIWA welcomes new members 38 Calendar of events 2016 40 REIWA Councillors 41 REIWA Network Chairs 41 Getting the most from your REIWA membership 42
UPFRONT NEWS 4 REIWA NEWS
PRESIDENT’S ADDRESS
By REIWA President Hayden Groves HAYDEN GROVES
Being elected REIWA President by OPPORTUNITY KNOCKS introduction of an advisory board that
your colleagues is both humbling While commentators seem keen to will offer strategic direction and advice.
and thrilling in equal measure. highlight the negatives of the Perth We’ve appointed a group of professionals
The opportunity to serve our property market, it’s important we look from across a range of different industries,
industry is a responsibility for the positives and opportunities that including member representation, whose
I welcome, relishing the idea that the current market brings. Sustained low varied experience will ensure reiwa.com
a difference can be made whilst in interest rates and plenty of housing stock remains an essential part of your business.
the role. to choose from make 2016 a great time
SUPPORT YOUR INSTITUTE
to buy.
IMPROVED SERVICE I have grown increasingly concerned
Affordability has improved, giving first
One of REIWA’s strategic focuses for this about the significant growth in third
home buyers and those trading up
year is to extend our service delivery to party commercial operations promising
through the market the luxury of time
members. Your Institute offers a suite of to deliver you more leads and business
and choice in finding their ideal property.
services designed to improve efficiencies, opportunities. These so-called ‘industry
Trade up activity ought to drag up the
enhance professionalism and maximise partners’ rely on you to support them
median house price, giving us a chance
business profits, yet there is room to but by doing so you are feeding a
at more positive media as the year
improve the manner in which these commercial entity that is solely interested
progresses. Pleasingly, sales volumes are
services are developed and delivered. in taking a share of your commission
moderately higher in the early stages of
or management fee. These rating or
I promise improved service delivery to 2016 when compared to the same period
agent finding sites do not have your best
you, your staff and your businesses as the last year.
interests at heart; they simply want a share
year progresses.
ADVOCACY RAMPS UP of your hard earned money. By backing
THE YEAR AHEAD them, you are giving away control of your
REIWA’s most recent focus has been on
industry to commercial providers that,
This year will be challenging for many as the 2016-17 State Budget. We’ve put
once in control of a market, ramp up their
sales volumes remain at comparatively forward a number of recommendations
fees and deliver poor service.
low levels, property values remain for the State Government to consider
subdued and rental markets remain in around key issues including transfer duty I encourage you to carefully consider
oversupply. and land tax. the implications for your industry before
supporting these providers.
Population trends have shifted Negative gearing has been
dramatically, impacting on all residential comprehensively debated in recent In response, reiwa.com is launching
sectors. The vacancy rate reached six times. We stand united with the Real AgentFinder, that ensures the public can
per cent in the December quarter and Estate Institute of Australia and share their find an agent who meets their needs and
listings have moved beyond 15,000 from view that Labor’s plan to limit negative not simply the one offering the lowest fee.
the seasonal dip we saw over the holiday gearing to newly constructed investment I look forward to seeing you all at the many
period. properties won’t improve the supply REIWA events planned for the coming
Consumer confidence across the state of housing and housing affordability as year. These events are a great way to
remains low and this is impacting the claimed. If such a policy was introduced, stay informed about issues that affect our
decisions being made in households. investors would exit the established rental industry, extend your professionalism and
The commercial sector is also feeling the property market and this would affect to celebrate your success.
impact of the state’s slowing economy the value of your property management May the year ahead bring you
with the local office and industrial portfolios. opportunities to grow and learn, both
property markets seeing rents drop and personally and professionally.
DRIVING THE FUTURE
incentives increase to encourage enquiry
and tenure. REIWA’s dedicated focus on improving
reiwa.com continues, with the
UPFRONT NEWS 5 BUSINESS PARTNERS REIWA would like to thank the following partners for their generous support of the Institute and its members.
UPFRONT NEWS 6 REIWA NEWS
MESSAGE FROM THE
CHIEF EXECUTIVE OFFICER
By REIWA CEO Neville Pozzi NEVILLE POZZI
The REIWA Council and Corporate REIWA.COM AGENTFINDER year between 1989 and 1997 and only
Executive team met in February The Institute sees the emergence of 63,000 per year between 2007 and
to review the Institute's current such sites as a significant threat to the 2015, despite a significant increase during
performance against key long term viability of real estate agency that time in the total housing stock.
indicators and to adjust some practices. A number of agencies have adapted to
strategies that reflect changes this changing trend by concentrating
To this end, REIWA has developed
in the real estate market, as well on increasing their rent rolls. The
an industry-owned rating system,
as new trends and services that potential for growth in this area of real
reiwa.com AgentFinder, to provide all
impact the traditional way real estate practice is significant, with only
the features, plus more, that these third
estate is transacted. 60 per cent of private rentals currently
party providers offer. The intention is to
An extensive list of threats and become the most credible source for being managed by real estate agents.
opportunities were also considered the public when seeking a real estate REIWA Council noted that the industry
during the review. company or individual to sell their had foregone some $28 million in fees
It came as no surprise that one of the property. over the last year, based on the current
biggest threats facing our industry is The planned release date for reiwa.com vacancy rate of six per cent.
in fact agents themselves and their AgentFinder is April and this new
employees embracing new third party BUDGET SUBMISSION
system will enable companies and
services for short perceived gain individuals to decide what level of REIWA is very conscious of the negative
without considering the longer term information they wish to make publicly impact property taxes are having on the
impacts these decisions may have available. market, particularly stamp duty.
in creating further competition in an As part of our state pre-budget
The Institute's current 'Find an Agent'
already crowded market of real estate submission we have suggested that
function on reiwa.com is already widely
service providers. transfer duty on property be replaced
used by the public.
One such threat is the emergence by a broad-based land tax similar to that
We believe that by adding additional
of agent rating websites which have adopted by the ACT government.
features and combining information in
recently gained popularity. The Institute is very aware of the
one area on reiwa.com, this will greatly
As these sites gather industry assist people in their decision-making pressures the industry currently faces
support they will over time become and hopefully remove the need for and is striving to provide services that
a 'wholesaler' in the real estate members to list with and support third complement members' businesses and
transaction. Their role will be to party products. which are cost-effective alternatives
completely bypass the current direct to the range of services that are
relationship between seller and agent MARKET TURNOVER commercially available.
and become a broker/referrer for those Another significant factor impacting the REIWA is well advanced in discussions
seeking an agent to sell their property. viability of real estate agency practice with a major real estate services
While fees are currently either has been the trend by homeowners to provider to develop an industry
subscription based or a percentage of move less frequently. controlled benchmarking product
the selling fee, and in some cases free, REIWA Research undertook a study that will assist members measure their
as these sites become more popular the last year which revealed that in 1990 businesses against their peers, and also
fees could increase to the extent that a homeowners moved every 14 years and provide valuable assistance to ensure
significant portion of the selling fee is in 2015 the average time was 19 years. the viability of individual businesses in
actually going to these brokers/referrers. this changing real estate market.
This is supported by the number of
transactions which averaged 72,000 per
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UPFRONT NEWS 8 REIWA NEWS
A CHALLENGING YEAR AHEAD
Rapidly changing population and Total sales volume declined over Despite a quarterly decline in
migration trends will continue the December quarter as the December, the historically high new
to have serious implications market experienced a significant dwelling grants paid over the year 2015
for economic growth and the increase in listings in November, further reinstates the fact that first home
performance of the housing market almost crossing the 17,000 mark buyers are taking advantage of the
in the short term. before retreating to around 14,500 softening market to secure a good deal.
According to recent population data during the festive season.
CHALLENGE AHEAD
released by the Australian Bureau of Rental listings across houses and units
Statistics (ABS), Australia's population reached the 10,000 mark during the As we move into 2016, the big challenge
grew by 1.35 per cent during the year to start of this year, which is 60 per cent confronting the Perth market will be the
June 2015. higher than the same time last year. impact that the completion of a record
level of new dwelling construction will
Australia's population growth rate
CONFIDENCE DOWN have over the next two years.
continued to slow to record the smallest
growth since 2006 and is now just Record low interest rates have done The impending supply of dwellings,
below the 20 year average growth rate. little to stimulate activity over the past coupled with the downturn in
12 months. population, may lead to a surplus supply
In Western Australia, net overseas
Any further rate reductions in the first of houses in the short term.
migration to the state dropped by
37.3 per cent over the year and a more half of 2016 are unlikely to lift activity Nevertheless, the market welcomed
significant drop of 63.6 per cent on a due to the strength of socio-economic a favourable decline in WA's building
quarterly basis. Likewise, net interstate forces that are stifling investment and approvals once again during the
migration has dropped to the point confidence in WA. December 2015 quarter by 14.5
where the state has recorded a net Consumer confidence in WA weakened per cent, following a 9.5 per cent
interstate loss, a trend not seen over the during December, according to the decline in the last quarter.
last 10 years in WA. Westpac–Melbourne Institute, as a result This will allow the market to work on
of future job cut announcements and the sizeable backlog of dwellings that
RENTAL IMPACT anticipated weaker mining conditions. have been previously approved and
This slowdown has had a dramatic avoid exerting additional pressure on
impact on rental markets, with POSITIVE NOTE the market.
Perth's vacancy rate recording a On a positive note, there were 8,984
historic high of six per cent as of first home owner grants for new
the December 2015 quarter. dwellings approved during 2015, which
The vacancy rate is expected to is the highest number approved on an
increase further as the record level of annual basis since the year 2000.
new dwellings that commenced in This is an increase of 1,093 grants for
the booming years of 2013 and 2014 new dwellings approved compared to a
are completed in 2016 and 2017. year earlier.
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UPFRONT NEWS 10 REIWA NEWS
VACANCY GLUT IN OFFICE MARKETS
Perth's commercial property Foreign equity remains keen on WA Knight Frank expects commercial CBD
market remains weak with commercial property projects despite vacancies to peak at around 22 per cent
about one in five offices vacant, the high vacancy rates and often during 2016.
maintaining a crash in tenancy substantial incentives being offered by West Perth commercial landlords have
demand that began in 2012 when inner city landlords to attract tenants. been refurbishing and upgrading their
China's reduced need for WA Plentiful office supply is still entering buildings in a bid to draw tenants who
resources first began to impact the Perth market and commentators are are demanding quality office fittings in
our economy. suggesting it could be up to three years a competitive market, with more than
The Property Council estimates Perth's before lower quality, old office stock is a quarter of the inner suburb's B and C
office vacancy rate increased from 16.6 absorbed or converted for a different grade buildings vacant in late 2015.
to 19.2 per cent in the six months to use so that demand is balanced.
January, the highest level since 22.8 SUBURBAN MARKETS
During this time it's likely that WA
per cent was recorded in 1995. commercial property agents will Perth's suburban office markets had
In January, CBD office vacancies varied struggle to find office tenants if their lower vacancy rates than the CBD during
from 15.9 per cent in premium buildings landlords aren't willing to lower rents 2015 but suburban tenancy demand is
to 37.5 per cent in D grade buildings. and offer incentives that match the weak expected to ease during 2016.
JLL property group estimated Perth's market. Landlords of older office buildings
CBD had a 23.5 per cent vacancy rate have been discounting their rents well
SUPPLY below what tenants are expected to pay
in the December 2015 quarter and has
forecast that office vacancies will peak In the six months to January, 113,463sqm for new premises, but city owners are
around 24 per cent in the first quarter of new office space was added to the likely to compete strongly for suburban
of 2016. Perth market, even though there are tenants throughout this year because of
now about 10,000 fewer office workers the high office vacancy rates in the CBD
Other market observers claimed in
in the CBD than in 2012. However, new and West Perth.
February that the CBD office vacancy
office construction is winding down Premium CBD rentals were around
rate is probably close to 25 per cent and
significantly this year. $1,000 per sqm at the peak of the
will remain high for several years.
The Property Council reported that property market and the same premises
WEST PERTH in January, Perth had its first signs in are now likely to let for about $600 per
The office vacancy rate in West Perth three years of positive net office space sqm, along with incentives as high as 50
rose from 10.8 to 12.2 per cent in the absorption, offering hope that the per cent of the lease rental value.
six months to January, according to The downturn may have bottomed.
Property Council, with market signals in By early December 2015, there was
late 2015 that a low point for vacancies around 300,000sqm of office space
has almost been reached in the suburb. empty in the Perth CBD, with many
However, office vacancies in East Perth landlords having to discount their rent,
were pushing toward 30 per cent in pay for fit-outs and be flexible with
late 2015. generous concessions to attract tenants.UPFRONT NEWS 11
RETAIL MARKETS STRONG
DESPITE CHALLENGES
The most significant influence Retail market analysts believe the advent the increasing competition from
on WA's retail property market of Aldi is most likely to affect the turnover internet retailers.
during 2016 is likely to be the and associated foot traffic of IGA rather However, it's not known if or when
opening of Aldi grocery stores than Coles or Woolworths outlets. various of these shopping centre
across the state, with the German expansions will proceed.
supermarket giant investing about EXPANDING MARKET
$450 million to develop as many as Twelve shopping centres were sold in
70 sites over coming years. WA during 2015 with a total sale price
Construction is nearing completion on of almost $352 million, and investors
14 stores in Mundaring, Butler, Kwinana, have been increasingly interested
Rockingham, Southern River, Mandurah, in Perth retail properties that come
Joondalup, Wattle Grove, Halls Head, to market due to their security and
Australind, Mirrabooka, Belmont, competitive returns.
South Lake and Camillo, with Aldi also There were recently nine major
considering locations in Nedlands, shopping centres in Perth and Peel with
Lakelands, Mandurah, Cannington, expansion plans totalling 335,637sqm
Haynes, Midland, Ellenbrook, at a cost of more than $3.7 billion,
Busselton, Maddington, Secret Harbour largely due to the easing of retail
and Waikiki. trading hour restrictions and despite
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E: graham@buyabusiness.com.auUPFRONT NEWS 12 REIWA NEWS
NEW PLANNING GUIDELINES
FOR SWAN VALLEY
The State Government is The guidelines also recommend an Q&A
considering public comment on its intensive tourism zone to create REIWA News asked Swan/Hills branch
draft planning guidelines for the attractions along West Swan Road and chair Grant Winning for his opinion about
Swan Valley that will determine how Great Northern Highway, and a the draft Swan Valley planning guidelines:
the district can be developed for rural-residential zone to allow rural
residential, tourism and agricultural lifestyle lots with hobby farm, small scale How do you believe the new planning
use during future years. agriculture, horticultural, tourism and guidelines will most influence the Swan
The draft plan prescribes what land cottage industry opportunities. Valley real estate market in coming
uses are appropriate and how buildings The draft planning guidelines also flag years?
should be designed in the valley to a new town centre at Herne Hill that I think it's a good positive move. The Swan
ensure that future developments reflect consolidates residential, commercial and Valley is a beautiful spot to visit, not only
the area's character. community activities so the area develops on the weekend but during the week as
as a typical WA rural town. A local structure well. The amount of visitors frequenting
VALUES plan will be developed by the City of Swan the area could be over one million in no
If and when adopted, the planning for the town centre. time at all and this is obviously great for our
guidelines will influence property values Minister for Planning John Day said the economy.
and investment potential as they control draft guidelines aim to provide greater
most of the ways that land can be used and Does feedback from branch members
protection of the valley's agricultural land
buildings developed. suggest industry satisfaction or
while at the same time encouraging more
dissatisfaction with the guidelines?
The Swan Valley Development Plan tourism activities and related
creates a zoned template for protection developments. Overall it's satisfaction. There are always
of natural features and requirements for a few who do not like the idea of change
tourism developments, sheds, agricultural RESIDENTIAL DEVELOPMENT and that's understandable, but the vast
buildings, single houses, commercial and The Satterley Property Group paid majority are in favour.
retail properties. $90 million in November for 140ha of
Do you believe the draft planning
Landowners wishing to develop can use land at an Upper Swan site adjacent
guidelines provide enough scope for
the plan to determine their siting, setbacks, to the Vines and Ellenbrook, and
future residential development in the
parking, access, entry statements, ancillary is expecting it to produce 1,717
Swan Valley?
dwellings, land use buffers, fencing, residential lots as well as a new primary
school and a two hectare retail space. Absolutely. The draft came across to me as
landscaping and signage.
Construction is expected to begin in a very good mix.
ZONES 2017 with the first land release in 2018.
If adopted in their current draft, do
The guidelines recommend the valley The $1.12 billion Swan Valley bypass you believe the new development
be split into a 6,500ha rural zone which road, a 37km link from the Reid and guidelines will improve buyer and
supports incidental tourism developments Tonkin Highway intersection to the investor confidence and stimulate
that maintain the area's agricultural basis. Great Northern and Brand highways, greater market demand for Swan Valley
Developments related to tourism would is due to be completed by 2019. properties, with a positive influence on
be supported in the rural zone only if they The Swan Valley attracts about 600,000 turnover and values?
are incidental to the land's primary use and visitors and contributes around Yes, I do. As tourism increases the area will
the style is sensitive to the character of the $200 million to the WA economy become better known not just in WA but
Swan Valley. each year. for interstate and overseas visitors as well –
a little like Margaret River without the surf!UPFRONT NEWS 13
ARCHIVES WANT MORE FOR
CENTENARY YEAR
This year will see planning start in Officer Neville Pozzi and Centenary We'd like to thank these members and
earnest for REIWA's centenary year Coordinator Kate Gorce-Macham to their families for their kind donations.
in 2018. plan what will be an exciting year-long Other artefacts we have in the archive
Throughout 2016, archiving aficionados celebration for members, staff and the that may be considered for display are:
and Past Presidents Les Wearne, Paul general public.
Druitt and Bryan Mickle will continue • A membership seal press circa
DONATIONS 1960s
to meet regularly under the guidance
of REIWA's archiving consultant Jon While we already have a wonderful • A membership book dating from
Readhead to consider items worthy of collection of artefacts, any donations 1931
the centenary collection. or loans to REIWA for display purposes • The original certificate of
would be most welcome. incorporation from 1918 when
An application has been submitted to
To date we've been most grateful to REIWA was known as the
the State Library of Western Australia in
receive: Auctioneers', Land and Estate
the hope it will agree to an exhibition
Agents' Association of Western
of key historical information that has
• A hand-painted ‘For Sale’ sign circa Australia (until 1944)
formed part of REIWA's evolution over
1960s (donated by Les Wearne)
the last 100 years. Please contact Kate Gorce-Macham
• A diary log of Roy Weston's time
Executive Manager Marketing and as REIWA President 1972-1974 on 9380 8221 or via email at
Communications Stephanie Collinson, (donated by Patricia Weston) kate.gorce-macham@reiwa.com.au
together with newly appointed • Several copies of A Terrace Walk to discuss any items you may wish
Corporate Communications Manager and Half a Rood by Athol Thomas to donate.
Jane Humphries, will now work (donated by Jim Henneberry, Tom
closely with REIWA Chief Executive Moylan and Peter Yujnovich)
A hand-painted ‘For Sale’ sign circa 1960s, donated by Les Wearne.UPFRONT NEWS 14 REIWA NEWS
REIWA SUPPORTS COMMUNITY
REINVEST FOR THIRD YEAR
We are entering our third year of • Avanti Residential We'd also like to acknowledge all our
supporting inaugural Community • Airey Real Estate members and their staff who have
REInvest partner The Salvation • DQ Real Estate volunteered by preparing meals and
Army in their goal to help end • Professionals Michael Johnson & Co putting up Christmas decorations at The
homelessness. • dethridgeGROVES Real Estate Beacon, serving meals to the homeless
To date, REIWA has donated almost • Ray White Uxcel via the Street Outreach program,
$300,000 to the Salvos and in 2015 • O'Rourke Realty Investments planting seedlings and weeding gardens
more than 300 hours of volunteer time • Momentum Wealth at the Harry Hunter Rehabilitation
was also invested in Salvation Army • Bourkes Centre, and donating sleeping bags and
programs. • Joyce Property Investments Christmas gifts to help those in need.
• Realmark Dunsborough Your contributions have been heart-
Funds donated over the 2015-16
• First National Real Estate Druitt warming and display the significant
financial year will provide a night at The
& Shead generosity of our industry as a whole.
Beacon, the Salvos' homeless facility,
• Naked! Real Estate
for 878 people in need, as well as
• Tully Real Estate
2,634 meals.
• PLG Realty
We'd like to thank our inaugural • Northbridge Sales & Leasing
Community REInvest sponsors who have • Rentwest Solutions
largely made our financial contributions
possible:
Mark and I really enjoyed
working with the Salvos this
morning. It has made me
realise that when I eventually
have more time on my hands
I would like to contribute to
this cause on a regular basis.
I would highly recommend
this experience to everyone.
Tracey Rath, Joyce Property Investments
Tracey Rath and Mark McCaster from Joyce Property Investments
volunteering with The Salvation Army as part of the Community
REInvest program.IN
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REIWA BUDGET SUBMISSION
TARGETS TRANSFER DUTY
REIWA’s submission to the State Interestingly, house sales within the also declined. The significant loss in
Government’s 2016-17 budget $310,000 – $500,000 price range have migration bluntly outlines the impact
process focusses on the issues that come off in the last two years, which that the mining investment shutdown is
will impact Western Australia’s real indicates softening activity among having on resource-focussed WA.
estate industry the most. FHOG buyers. The impending supply of dwellings,
During this difficult time, it will be coupled with the downturn in
MULTI-RESIDENTIAL
important to keep first home buyers population, may lead to a surplus supply
active in the local market. First home The multi-residential market remains soft of houses in the short term.
buyers represent approximately 25 in terms of sales.
This may further trigger downward
per cent of the WA property market. A longer term picture shows that sales pressure on house prices and will have
They provide for the development volumes are 50 per cent below their flow-on effects for both the established
of new housing but also create 15 year average. Some of this may be and rental markets at a time when
opportunities for trade-up activity in the attributed to weak investor activity, in listings and vacancy rates are on the
established WA property market. particular since the Australian Prudential rise.
Regulation Authority changed the
Balancing a number of policy areas is
capital adequacy requirements for RECOMMENDATIONS
crucial for the State Government.
investor lending in mid-2015. On the basis of the current housing
Keeping state property taxes at current
This, together with further supply of market, together with existing policy
levels and ensuring there is suitable
stock hitting the market, has affected the imposed by the State Government,
affordable housing will provide some
multi-residential market. Median prices REIWA suggests the following
assurance to a market that exhibited
for the December quarter 2015 sat at recommendations:
signs of slowing in 2015.
$434,000 and seem to be flattening
REIWA’s submission focusses on • REIWA strongly recommends that
out, trending around $430,000 –
historical trends and the market outlook the State Government does not
$434,000 over 2015.
for 2016, which creates a backdrop to increase transfer duty rates or
Similarly, the rental market has been thresholds.
discuss the impact on key state revenue
weak in terms of median rents, down 9.1 The continuing downward trend in
streams. The consequences this has on
per cent for the year to December 2015 housing sales activity since the March
government policy are also considered.
to $400 per week. 2013 peak will clearly have a negative
LATEST MARKET TRENDS Rental listings trended up 55 per cent impact on the State’s transfer duty
There has been a consistent downward for the year to December. receipts over 2016-17.
trend in housing sales activity in the While this is an issue for state revenue,
OUTLOOK
Perth Metro Region residential market any meddling with transfer duty
since volumes peaked in March 2013. A slowdown in WA’s population rates as a means of improving the
growth may have serious implications budget position will only magnify the
Median prices have also trended lower
for economic growth and the overall slowdown with a large increase in
but only slightly, down to $525,000 for
performance of the housing market. listings and longer selling times.
the preliminary December 2015 quarter.
Net overseas migration to the state
This comes on the back of prices
has dropped by 37 per cent over the
peaking during the fourth quarter of
year while net interstate migration
2014 at $555,000.ADVOCACY & POLICY 19
Any upward adjustments to transfer
duty rates will only further deter sales
activity in an already slowing market.
• REIWA strongly recommends that
the State Government maintains the
existing transfer duty exemption for
first home buyers at $430,000. This
will avoid any further disincentive
for buyers to enter the WA property
market in what is a softer residential
market.
The latest First Home Owner Grant
(FHOG) data from the Office of State
Revenue indicates first home buyers
of established housing continue to
trend down, falling 8.8 per cent from
59.1 per cent in 2014 to 50.3 per cent
in 2015 based on rolling annual
• REIWA recommends that the State A key policy issue that REIWA
established grants paid during the
Government introduce rebates consistently advocates is the need for
respective year.
on transfer duty for seniors to diversity in our housing stock.
If first home buyer activity declines encourage appropriate downsizing It is well understood that transfer duty
to levels of approximately 16 and assist in ensuring appropriate prohibits people from making better
per cent like it did in 2003-04, such housing diversity in the WA housing choices. For example, older
a slowdown could remove almost residential market. households often struggle to raise the
7,000 established first home buyers In past pre-budget submissions, upfront cost of transfer duty in order
in the market. REIWA has indicated the extent to to allow them to downsize to a smaller
This would also have a significant which transfer duty has an impact on house that is more appropriate for
knock-on impact to transfer duty. housing affordability. This submission their needs.
Potentially, the State would forgo reiterates that position.
between $160 - $195 million in • REIWA recommends that the State
It is widely understood that most trade-
transfer duty, assuming these trade- Government revisit transfer duty
up buyers are not in a position where
up buyers purchased a house with a relief for off-the-plan developments
surplus funds are available to cover
value of $600,000 - $700,000. and house and land projects to
the transfer duty impost upfront. As
assist in delivering on the key
This means the effect of lower a consequence, buyers are forced to
component of the Government’s
trade-up activity as a result of fewer borrow this amount on top of the loan
Directions 2031 planning strategy
first home buyers in the established amount, hence amortising the transfer
and the Perth and Peel @ 3.5 million
market will impact the State’s future duty cost across the whole life of their
strategy.
transfer duty receipts. mortgage.ADVOCACY & POLICY 20 REIWA NEWS
Introduction of transfer duty relief This is particularly exacerbated in the • REIWA recommends that the State
would facilitate investment into multi- current market as rental prices are Government undertake a state
residential projects and make them soft and securing tenants is difficult. tax review as a commitment in the
more attractive. In addition, this is adversely affecting upcoming 2017 state election.
It would also assist the State self-retirees who are funded by their This review must assess the viability
Government to deliver on key investment properties. of and financial implications on
priorities in the areas of master This would have a significant impact the community of a shift to a
planned and built communities, and on the residential rental market broad-based land tax system that
support the push to increase densities as supply would decline, adding ultimately removes transfer duty.
which are a key policy direction of the pressure to rental prices and also While it is acknowledged that the
Directions 2031 and Perth and Peel @ impacting housing affordability. Federal Government is undertaking
3.5 million strategies. a national taxation review, REIWA is
• REIWA recommends removal of of the view that the WA Government
This type of relief is present in the land tax aggregation rules across should undertake an assessment of a
Victorian market which allows for the board because it remains a broad-based land tax regime with a
an exemption on off-the-plan strata tax on business and a disincentive view to abolishing transfer duty.
projects. for investors to hold a portfolio of
There are a number of flow-on
• REIWA recommends that the State properties.
benefits from a land-based tax
Government make no further REIWA has in the past and continues
regime.
changes to rates or thresholds in this submission to advocate to the
State Government for the removal It would allow for greater housing
for land tax. The rate hikes and
of land tax aggregation rules across mobility across the community.
changes to thresholds in the
the board. Households could locate closer to
last State Budget are having a
employment and activity centres, thus
detrimental impact on landholders This is needed as currently the
reducing congestion and allowing
and their view to holding aggregation rules remain a tax
benefits that are stymied by the
investment properties. on business and a disincentive
current transfer duty regime.
REIWA is concerned that the decision for investors to hold a portfolio of
to increase land tax in the 2015-16 properties, particularly rental stock. Removal of transfer duty would also
budget is now having perverse improve housing affordability as
There can be no underestimation
outcomes on the investment decision most households currently borrow
of the importance that the private
and may lead to those investors funds to cover transfer duty, which
rental market has in the provision of
selling their property holdings. is amortised across the life of the
appropriate housing.
mortgage and increases repayments.ADVOCACY & POLICY 21
CUTTING RED TAPE FOR
REAL ESTATE AGENTS
In 2015 REIWA advocated on your This Bill will allow property managers to This disadvantages the real estate agent
behalf for changes to both the send the notice of the proposed time significantly as these projects can take
Residential Tenancies Act 1987 and on an approved form, but will still allow anywhere from two to four years to
the Real Estate and Business Agents the tenant to negotiate the time if the settle.
Act 1978. proposed time is inconvenient.
Recommended reform
The reforms were based on issues that This simple change will reduce costs
The Bill will allow real estate agents to
you were facing in your business and to real estate agents significantly, while
receive early payment of commission for
we responded by discussing these still ensuring consumers are protected
off-the-plan strata transactions.
regulatory setbacks with the Barnett and can negotiate and attend a periodic
Government. inspection. It seems, though, that the Bill misses
the opportunity to include vacant land
Two Bills are currently before the WA A win for everyone involved.
subdivision as well.
Parliament. At the end of 2015 we wrote
to all members of Parliament seeking REFORM 2 A key feature of the reform will be to
their support for the two Bills. Licensing Provisions Amendment Bill ensure that a consumer’s deposit is
2015 – removing the prohibition against never used as part of the commission
Following is a summary of the two major
commission payments to real estate payment.
reform wins:
agents before settlement for off-the- As you can see from these two key
REFORM 1 plan transactions. policy reforms, REIWA holds the impact
Residential Tenancies Amendment of our policy positions on the WA
Current provision
Bill 2015 – simplifying the notification consumer at the forefront at all times.
Off-the-plan transactions for both strata
process when a lessor wishes to enter It is important to REIWA that everyone
and vacant land subdivision are more
the property. wins in WA real estate and that good
commonplace than they were in the past
industry outcomes are balanced with
Current provision when the REBA Act came into force.
appropriate consumer protections.
The RTA requires a property manager Real estate agents undertake a
REIWA congratulates the Minister for
or lessor to negotiate a time with the significant amount of work to sell these
Commerce and the Barnett Government
tenant before they send a notice for a sorts of projects but are not allowed
for working with the real estate industry
periodic inspection. This change came to be paid their commission until the
to progress these reforms.
in as part of the larger reforms to the RTA project settles.
in July 2013.
Recommended reform
While REIWA believes it is important to
ensure a tenant can negotiate a suitable
QUICK FACT
time for a periodic inspection, the
• Research data suggests 3.2 per cent of
requirement to do so before a notice is the Perth metropolitan population lives in an
sent is increasing administrative costs apartment within 15km of the CBD.
significantly for real estate agents.ADVOCACY & POLICY 22 REIWA NEWS
CHANGES TO AUSTRALIA’S FOREIGN
INVESTMENT FRAMEWORK
Foreign investment plays an important The most significant changes to note ADDITIONAL WORK FOR THE ATO
role in Australia’s economy. As long as are that fees are now payable and in As a result of the new reforms, the ATO
the investment is not contrary to our addition to the Treasurer’s ability to is now responsible for the transfer of
national interest, it’s welcomed by the require a person to give information or real estate functions which includes
Australian Government. produce documents, officers from the managing and recording applications
Foreign investment provides many Australian Taxation Office (ATO) can for foreign investment in residential
benefits including additional capital for exercise broad ranging investigatory real estate. This role encompasses the
economic growth, new employment powers. collection of the application fees, the
opportunities and improved consumer upfront screening process, compliance
THE ROLE OF THE TREASURER
choice. activities and enforcement action.
AND THE FOREIGN INVESTMENT
REVIEW BOARD The ATO will also be responsible for
THE NEW LEGISLATIVE REFORMS
keeping an Agricultural land register
New foreign investment reforms came The Foreign Acquisitions and Takeovers
and Residential land register.
into effect on 1 December 2015. The Act 1975 allows the Treasurer, or
changes were made to modernise his delegate, to review investment NOTIFYING THE TREASURER
the foreign investment framework, proposals to ensure they are not
A foreign person who proposes to enter
reducing complexity and compliance contrary to Australia’s national interest.
an agreement to take a notifiable action
costs for investors. The changes If the Treasurer considers the proposal must give a notice to the Treasurer and
include: contrary to Australia’s national interest, receive a no objections notification
• Incorporating policy-only the Treasurer may make an order before following through with an
requirements into the legislative prohibiting the proposed transaction investment.
framework to improve transparency or, if the transaction has already taken
The following circumstances require the
and certainty for investors place, directing the foreign person to
Treasurer to be notified:
• Increasing the substantial interest dispose of their interest.
• Foreign persons acquiring a
threshold from 15 per cent to 20 According to the ATO, while each
business
per cent so it aligns with Australia’s proposal is considered on a case-
• Foreign persons acquiring
corporate takeover rules by-case basis, the factors typically
agricultural land
• Removing routine cases from the considered by the Treasurer when
• Foreign persons acquiring
system considering any non-residential
residential land
• Introducing civil penalties and proposal include:
stronger criminal penalties • The impact of the proposed RULES FOR FOREIGN INVESTORS
for serious offences, as well investment on Australia’s national BUYING RESIDENTIAL LAND
as providing for the issue of security, the economy and the To ensure that foreign investment
infringement notices for less serious community is in the country’s best interest, the
offences • The impact of the proposed government has introduced some
• Introducing civil penalties for third purchase on competition rules for those wanting to purchase
parties who assist in breaches of the • Other government policies residential land.
rules (including taxation) • Established dwellings
• Introducing fees for applications • The character of the investor - Temporary residents need to apply
under the Foreign Acquisitions and
and receive foreign investment
Takeovers Act
approval if they want to buy an
established dwelling.ADVOCACY & POLICY 23
- Temporary residents cannot buy If the application falls in a number of
established dwellings as investment categories outlined by the ATO then the QUICK FACT
properties but they will normally category with the highest fee will apply. In the 12 months to September 2015,
be allowed to buy established WA’s population grew by 32,542 or 1.27
dwellings for redevelopment OFFENCES AND PENALTIES per cent to 2.59 million. Natural increases
of 21,014 and net overseas immigration of
where there is an overall increase in The introduction of a civil penalties
14,249 were offset by 2,721 people leaving
housing stock. regime and increasing the existing WA for other states. WA’s net interstate
• New dwellings criminal penalties associated with migration was negative in the 18 months to
September, reflecting the resource sector
- Temporary residents need to apply foreign investment are also significant
downturn. WA’s population was forecast
and receive foreign investment outcomes of the reform. to grow two per cent in 2015 but achieved
approval if they wish to buy new The penalties are designed to deter only 1.4 per cent.
dwellings in Australia. Such investors from failing to comply with
applications are normally approved their obligations under the law. The
without conditions. amount of the penalty depends on what
• Vacant land rule has been breached.
- Temporary residents need to apply
and receive foreign investment MORE INFORMATION
approval if they wish to buy vacant More information on Australia’s Foreign
land for residential development. Investment Framework, including a
These are normally approved breakdown of fees and penalties, can
subject to conditions, i.e. that be obtained from the ATO.
construction is completed within
four years.
FOREIGN INVESTMENT
APPLICATION FEES
The introduction of a fee-payment
regime for foreign investment
applications is a significant part of the
reform. The fees apply per application
and are non-refundable should the
application be refused or not proceed.
A person or entity who applies for an
exemption certificate, gives notice of
a notifiable action or gives a notice in
relation to a proposal to take significant
action that is not a notifiable action, is
required to pay a fee when the notice is
given or an application is made.
Fees vary depending on the type and
value of the proposed investment.ADVOCACY & POLICY 24 REIWA NEWS
PROGRESS IN STRATA TITLE REFORM
In mid-January, Landgate and
Minister for Lands Terry Redman
REIWA’s Strata Titles Network
committee was instrumental in
NEW CODE
announced that the Barnett developing the recommendations OF CONDUCT
Government has approved the
drafting of a Bill to reform the
of our submission that we lodged in
January 2015.
IMMINENT
Strata Titles Act. Landgate has listened to REIWA’s The Department of Commerce is in the
The Bill will be drafted on the advice recommendations. In the reform final stages of preparing the proposed
of Landgate which had significant area of buyer information and wording of the Code of Conduct for
stakeholder engagement and protection, Landgate will proceed with Agents and Sales Representatives.
consultation over 2015. amalgamating Forms 28 and 29 and The wording is being drafted by
The key areas for reform are: inserting a cover sheet for prospective the government solicitor based on
buyers that outlines key information they the final recommendations of the
• New forms of strata: community title need when buying a strata property. Department of Commerce, which tries
and leasehold strata and improved to ensure that the wording matches
The recommendations made about
staging of strata developments the recommendations.
the forms were based on our extensive
• Buyer information and protection
experience in this area. Once the Department of Commerce
• Resolving strata disputes
Next steps for reform will be for the is satisfied with the final draft, REIWA
• Management of strata schemes
Bill to be drafted by the Parliamentary will have the opportunity to raise
• Termination of strata schemes
Counsel and it will be introduced into any comment and advocate for any
the WA Parliament later in 2016. changes that in its view are in the best
interests of the industry or achieve the
desired consumer protection.
Draft codes of conduct have been
QUICK FACT released to settlement agents and
• An increasing number of WA’s metropolitan and regional councils are introducing or valuers for industry comment.
considering split coding regulations wherein a higher density bonus is allowed when neighbours
amalgamate their lots to sell a single property to a developer, usually at a higher price than if they REIWA expects the final code of
sold separately because of the land’s increased development potential. conduct to be in place prior to
June 2016.DELUXE
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NEW ADVISORY BOARD
FOR REIWA.COM
reiwa.com’s objective is to become development and improvement of the • impose challenges to directors and
the real estate portal of choice for reiwa.com portal. management that could improve
all West Australians. The purpose is to seek expertise the business unit
In order to compete with national outside of REIWA and benefit from the Advisory board members have
portals, work smarter and be nimble knowledge of others. complementary knowledge on different
in this pursuit, REIWA Council has The reiwa.com Advisory Board aspects of business.
formed an advisory board to drive the will provide the business unit with
direction and accelerate future growth external advice, understanding and REIWA.COM ADVISORY MEMBERS
of reiwa.com. strategic thinking about the real estate The selected members for the 2016
portal space, together with strategic reiwa.com advisory board are:
WHY AN ADVISORY BOARD?
recommendations for consideration. • Damian Collins, REIWA Deputy
An advisory board is a body that
President and Chair to the reiwa.
provides non-binding strategic advice ROLES AND RESPONSIBILITIES
com Advisory Board
to the management of an organisation – The reiwa.com Advisory Board will: • Paul Otness, Digital Product
for example, to REIWA Council.
• develop an understanding of the Manager reiwa.com
The informal nature of an advisory board business, market and industry • Clay Cook, CEO Bonfire
gives greater flexibility in structure and trends • David Fare, Director Media Tonic
management. Unlike REIWA Council, • provide ‘wise counsel’ on issues • Alischa Wunsch, Consultant,
the advisory board does not have raised by the membership, the Multiplier Strategic Marketing,
authority to vote on corporate matters CEO and REIWA Council PR and Digital Communications
or bear any legal responsibilities. • provide unbiased insights and ideas • Nathan Hewitt, Director YARD
In this case, the reiwa.com Advisory from a third party point-of-view Property Group
Board will report back on a regular (not involved in the operation of • Kevin Attree, Director Attree Real
basis and provide the Chief Executive the business) Estate Group
Officer and REIWA Council with a closer • encourage and support the
overview of the perceived challenges exploration of new business ideas
facing the reiwa.com business unit, and digital initiatives
together with recommendations on • act as a sounding board and
how to drive reiwa.com closer towards resource for REIWA Council, CEO
achieving its objective. and Executive Manager, and
reiwa.com when required
MISSION • encourage the development of a
The reiwa.com Advisory Board’s governance framework that enables
mission is to provide strategic direction sustainable growth of reiwa.com
and advice to the REIWA Council, CEO • monitor business performance and
and Executive Manager about the competition closelyYou can also read
