REINSW is calling for changes to the regulatory environment for the property services industry – particularly the paltry training requirement of just four days to gain a qualification to enter real estate practice. It is running a vocal campaign prior to the 23 March State Election.
REINSW congratulates NSW Labor on its recent announcement to establish a dedicated Strata Commissioner, but believes that a Commissioner for all things property, including strata and real estate services, would serve the public even further.
Real estate agents are charged with guiding consumers through complex transactions involving their most valuable asset. Traditionally, gaining a qualification for entry to the property services industry required three years at TAFE. The education requirement was slashed to four days by NSW Fair Trading in 2003, but since then property transaction values have skyrocketed and become increasingly more complex.
REINSW has been lobbying the NSW Government for improved education and training standards since then. The weeks leading up to the 23 March election is a key period for REINSW and its members. The REINSW has met with the political parties and sought their policy position as it relates to the industry. REINSW will be informing its members of these policy positions and requesting them to appraise their clients so that, come Election Day, they can make an informed choice.
REINSW CEO Tim McKibbin says: “Government ultimately listened to REINSW, passing legislation in 2016 that will increase the education requirements by new entrants into practice by 600 per cent. Surprisingly, however, NSW Fair Trading has not yet implemented the reforms. We believe this is because Fair Trading believes more training will reduce competition in the industry. REINSW agrees competition is a positive market influence, however it must be competition between well-educated, experienced professionals. Competition alone is not the panacea for all that ails a market.
“The current education requirement not only fails to prepare agents to respond to the reasonable expectations of consumers, it fails people wanting a career in real estate practice. Eighty (80) per cent of new entrants leave the industry in the first year.”
REINSW is calling for the appointment of an industry-experienced Commissioner for Property Services, who will work cooperatively and constructively with industry. “The industry, and more importantly consumers, need a regulatory authority that will work in a collegial manner, and support it. Industry’s current relationship with Fair Trading is adversarial, which benefits no one,” Tim says.
REINSW believes that all industry stakeholders should be protected by quality legislation that evolves and promotes continuous improvement of standards. REINSW has strong support from its member base: to date, it has gained over 2,300 signatures on its petition calling for a Commissioner for Property Services.
REINSW’s four reasons for the property services industry to be moved out of NSW Fair Trading and located under the regulatory control of a Commissioner for Property Services:
- Property transactions are high-value, low-frequency and inherently legally complex. Currently, under NSW Fair Trading, the property services industry is squeezed in among 40 other different trades and service providers that manage low-value, high-frequency transactions with minimal legal complexity. These industries include tattoo parlours, second-hand dealers, hairdressers and tow-truck drivers. NSW Fair Trading does not have the requisite industry knowledge and experience to support the property services industry.
- Property is Australia’s biggest industry. The property industry has an annual turnover exceeding $107 billion annually in NSW alone. This is far greater than the aggregate of all of the other industries regulated by NSW Fair Trading. In addition, it is bigger than the mining industry ($21 billion), the retail industry ($22.8 billion) and tourism industry ($38.1 billion) combined. A real estate acquisition is the largest financial transaction most NSW residents ever undertake. Even the cost of rent is estimated to be 30 per cent of the average income. The industry’s contribution to the NSW economy is significant, with stamp duty contributing $8.4 billion to the NSW Government revenue in FY2018.
- NSW Fair Trading has made poor legislative decisions. These have resulted in appalling consumer outcomes. For instance, NSW Fair Trading removed the need for an auctioneer to be licensed in 1993, reinstated it in 2002 and recommended its removal again in 2018. Additionally, it amended consumer protection legislation associated with trust accounts, which has had severe consequences. The total cost, which is being funded by the NSW taxpayer, is still being calculated. Despite several efforts to rectify this, consumers remain unprotected today.
- Real estate agents require better training and qualifications. Today, a certificate of registration to become an agent can be obtained in less than a week. Another example is that property managers – rather than trained inspectors – are expected to inspect important property safety devices, without the requisite training, qualifications and experience. Fair Trading is content with someone to blame quickly and not consumer protection.
Real estate transactions require an experienced and dedicated specialist, not someone who has acquired a certificate with four days of training and no practical industry experience.
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