Each year, the REINSW Industry Summit brings together key industry leaders to discuss the critical issues facing the real estate profession. The Summit provides an open environment for delegates to share their views and opinions on a wide range of issues. REINSW then takes the recommendations from Summit delegates and uses them to inform strategic direction and lobbying positions.
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2014 REINSW Industry Summit
What do we need to do to secure the future fitness of our industry?
That was the question posed to the 75 industry leaders at REINSW’s second annual Industry Summit on 27 November 2014.
Following the success of the inaugural event 12 months ago, the 2014 Summit again provided an open environment for industry figures to voice their opinions on the issues, challenges and trends impacting the industry and profession.
“This Summit is vital for our profession and plays a critical role in shaping how we will move forward,” REINSW Deputy President John Cunningham said when opening the Summit. “REINSW values the commitment of each and every one of you here today. Speak up, tell us what you think and put your issues on the table so we can move forward with conviction and achieve the outcomes you want and need.”
Setting out the six key focus areas for discussion at the Summit, facilitator Michael Sheargold encouraged everyone in the room to embrace the opportunity to raise fresh ideas and engage in healthy debate.
“Today is all about the future fitness of the industry,” he said. “The issues on the table today and how we resolve to tackle them will have a real impact on that fitness.”
1. The great portal debate
Speak to any agent about the issues that are concerning them and portals are usually on the list – and they certainly proved to be a hot topic at the Summit.
Following robust discussion amongst the delegates, there was consensus that there needs to be more and better support of industry-owned portals. By doing so competition will increase, which may go some way to breaking the stranglehold that the major portals currently enjoy.
It was acknowledged that there is a need for greater dialogue and engagement between the portals and the profession to ensure the former understands the pressures faced by agents. Further, the portals, being major industry suppliers, need to understand that it is agents who are their customers, not consumers, and as such deserve to be treated with a service ethos.
“Looking forward, we need to consider what we can achieve in a realistic sense,” Mr Cunningham said. “Can we exert a level of strategic influence over the major players? Is there an advisory role for us to improve the services and costs for agents? Or are there other strategies that we can implement by harnessing our power as a collective?”
Before closing discussion on this important issue, a question was asked: “What does tomorrow look like?” Delegates agreed that the profession needs to keep an eye on the future, so that developments in this space don’t take us by surprise.
2. Our national presence
In introducing this topic, REINSW President Malcolm Gunning outlined why REINSW parted ways with REIA some seven years ago.
“The Board took a critical look at the situation, and the clear conclusion was that we were just not receiving sufficient value for our investment and that the national body was not operating effectively,” Mr Gunning said. “So how should a national real estate body come together to best benefit the industry? How could it best provide value back to members?”
Evolution, rather than revolution, was the clear message from delegates.
REIs across the nation have so much in common; the similarities are far greater than the differences. It was acknowledged that there are clear operational benefits and savings that would flow from bringing the REIs together on a national basis, however it will be a journey. Delegates saw a pathway whereby two or three state REIs could begin working together on a more limited basis, establishing a solid foundation for future expansion. This approach would see each state enjoying operational and commercial economies. It would also see the development of a stronger lobbying voice on the national stage, while still allowing each state to address issues that are particular to their local environment.
The delegates agreed that the current model is outdated and requires a complete overhaul, so that the best people in the profession from across the country are representing national interests.
“It will be a journey of small steps,” Mr Gunning said.
3. Lifting education standards
The professionalism of the industry was discussed at length, highlighting the need for improved education and training standards, with particular emphasis placed on the requirements for entering the industry.
“There has been a dumbing down of educational standards,” Mr Cunningham said. “So how can entry-level and ongoing industry education be better aligned to workplace requirements?”
There was overwhelming consensus that current educational standards are grossly inadequate. Many of today’s most successful agents gained their qualification via an apprenticeship-style model and it was thought that there is merit in returning to a similar system; requiring entrants to the profession to “do their time” in order to gain experience before being eligible to hold a Real Estate Licence.
It was also suggested that national licensing needs to be put back on the agenda.
“Ultimately, if we want to hold ourselves out as professionals then we need to address this issue,” Mr Cunningham said.
4. Regulatory challenges
“NSW Fair Trading is prepared to rap us over the knuckles whenever we do something wrong, but they are not in the business of developing agency practice,” Mr Gunning said in introducing the next topic.
Delegates wholeheartedly agreed, calling for a more cooperative relationship with government rather than the adversarial one that current exists. This could be achieved under a partial self-regulation model where REINSW would take a greater role in helping agents understand what their obligations are and how to comply with them, rather than NSW Fair Trading attempting to regulate the industry at the point of service delivery.
“The property industry is not given the respect it deserves,” Mr Gunning said. “Our industry is one of the biggest revenue generators for the Government and it is simply not accorded the attention it needs.”
In order to achieve this, moving the real estate sector to another department (such as NSW Land & Property Information) should be considered in conjunction with a partial self-regulation model.
There was strong support for the concept of forming a property focused political party. Bringing together relevant industry bodies, the party would be focused on overhauling the property and business related taxes that currently inhibit property investment, as well as creating the opportunity for real estate industry reforms to receive the attention they need and deserve.
5. Payroll tax
The complexities surrounding payroll tax continue to cause angst for the industry.
“It’s all about interpretation. Unfortunately, even it you think you’re OK, you’re probably not. There are many shades of grey when it comes to payroll tax and the associated compliance issues,” Mr Cunningham said.
On this issue, delegates were unanimous: the NSW Office of State Revenue needs to provide clarity around the issue of contractors and employees, and when payroll tax is applicable.
“For far too long, the property industry has been operating in a very grey space, and it is time for the NSW Government to give us a commitment to providing guidance on the issue,” he said. “Until we have such clarity, many agency Principals are living in a dangerous world.”
6. The role of property managers
Smoke alarms, decks and balconies, glass, window safety devices, blind cords, swimming pools, asbestos and more. Property managers are now expected to make assessments on a wide range of building related issues.
“Are these the risks and responsibilities that we want to take on?” REINSW Vice President Brett Hunter asked delegates. “What do we want the role of property managers to be?”
Delegates were divided about whether there was any benefit in changing the title of ‘property manager’ to ‘tenancy manager’, but agreed that the title has led to misunderstandings as to the qualifications that property managers hold. While it was agreed that in most instances the role should be more akin to that of a tenancy manager, the real issue was how more responsibility for risks and safety compliance could be shifted back to the landlord and not left with the property manager as the easiest target.
“The job description has changed dramatically and we need to acknowledge this,” Mr Hunter said. “There’s no doubt that this is an issue that the industry will need to work together on as one to overcome and the work begins right here.”
Special interest groups
At the close of the Summit, Mr Cunningham invited delegates to stay involved.
“Following today, we’ll be forming a series of special interest groups,” he said. “These groups will help drive reform in each of the important areas discussed today. We encourage you stay involved and be an active part of shaping the future of our industry.”
A full report setting out all the recommendations coming out of the 2014 REINSW Industry Summit will be available soon.