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Build-to-rent
How the sector works and what it means for real
professionals
Unless otherwise specifically expressed, the views or opinions appearing in The Estate Agent (EA) are those of the authors and do not represent the views of The Real Estate Institute of Victoria Ltd (REIV). The REIV gives no warranty about the
PRESIDENT’S REPORT
Jacob Caine, REIV President
COLLABORATIVE EFFORTS IN NAVIGATING A CHALLENGING HOUSING MARKET
As we navigate the turbulent waters of 2024, the housing ecosystem in Victoria continues to present significant challenges for real estate professionals and all of our stakeholders. The urgency of the situation is underscored by the alarming rate at which rental providers are exiting the market, leaving renters in dire straits as they struggle to find safe and secure homes. On the horizon, new rental minimum standards promise to add complexity and cost for property investors and managers while property prices in Metropolitan Melbourne remain stagnant. The current media narrative often pits investment property owners against renters, buyers against sellers, and real estate professionals are routinely and unfairly portrayed as the villains in this complex system.
This negative tone does nothing to address the root of our housing issues. Instead, it creates division and hampers our ability to find meaningful solutions. It is crucial to recognise that all stakeholders share the same ambition: a healthy and thriving property ecosystem. This shared ambition is the foundation on which the REIV is building to change this narrative and foster a collaborative approach to solving the housing crisis.
The exodus of rental providers from the market is a stark indicator of the challenges we face. These providers, often demonised in public discourse, play a critical role in the housing supply chain, supplying 90 per cent of all rental housing. Without them, the availability of rental properties dwindles, exacerbating renters’ struggles. It’s essential to acknowledge the legitimate concerns of rental providers, including regulatory pressures, rising costs and economic uncertainties, and work towards solutions that keep them engaged in the market.
Renters deserve safe, secure, and affordable housing. The new rental minimum standards aim to improve living conditions, but the implementation must be handled carefully to avoid unintended consequences, such as driving more providers out of the market. Open dialogue and cooperation between rental providers, renters and regulatory bodies is essential to balance these needs.
The stagnation of property prices in Metropolitan Melbourne adds another layer of complexity. For sellers,
It is crucial to recognise that all stakeholders share the same ambition: a healthy and thriving property ecosystem
this may mean a lack of return on investment or a shortfall in their relocation budgets. At the same time, buyers are caught in a market where affordability continues to limit home ownership. A fundamental idea that we must contemplate, but often results in cognitive dissonance, is that achieving housing affordability inevitably translates into reduced housing prices. Melbourne currently ranks as the 7th least affordable housing market globally (Sydney is #2).
This scenario presents a paradox: while increasing property values might signify a booming market and profitable investments, it simultaneously pushes the dream of home ownership further out of reach for many. Striking a balance between maintaining property values and ensuring homes are affordable requires a nuanced approach, recognising that these goals often conflict but are both crucial for a sustainable and equitable housing market.
that the wellbeing of renters and the stability of the rental market are not mutually exclusive goals.
Changing the tone of our conversations about the housing market is not just about shifting blame or pointing fingers. It’s about building bridges and understanding the interconnectedness of our roles. At the REIV, we have engaged with all stakeholders, including the government, opposition, and advocacy groups like Tenants Victoria. These dialogues are essential in finding common ground and developing policies that benefit everyone involved.
We are encouraged that our evolving discussions with the government have yielded promising responses. There is a growing recognition of the need for balanced regulations that protect renters while ensuring the viability of rental investments. Similarly, our engagement with Tenants Victoria has opened up avenues for cooperation,
However, changing the narrative requires more than just institutional efforts. It calls for a collective shift in perspective. We must all strive to see the bigger picture and understand that our fates are intertwined. Rental providers need assurance that their investments are secure. Renters need homes where they feel safe and respected. Buyers and sellers need a market that reflects true value. Real estate professionals need recognition for their hard work and expertise and the invaluable role we play in sustaining Victoria.
Jacob Caine, REIV President
Compliance management made simpler
Detector Inspector is proud to partner with the REIV. Through our investment in technology and training, coupled with a skilled and enthusiastic workforce of account managers, support team members and field technicians, we strive to make compliance simpler for property managers and rental providers and homes safer for renters. With the leading compliance software in the market and millions of checks completed over the past 20 years, make Detector Inspector your first choice for smoke alarm, gas and electrical safety checks.
The scale to meet your needs
More than 500 field services team members work hard to make over 2,500 homes safer every day, and our team of 50 account management and help@DI team support property managers in their important compliance work for their portfolios.
The industry’s leading technology
From integration with the popular property management software, to self-service bookings for renters and the industry’s most detailed audit trail to ensure checks are done in accordance with legislated requirements, our technology is best-in-class.
Compliance management at your fingertips
In a world of CAV audits and ever increasing complexity, our Compliance Portal provides you with comprehensive reporting, available on-demand.
If you’re interested to learn more, please email us at reiv@detectorinspector.com.au and one of our team members will be in touch.
CEO REPORT
Kelly Ryan, REIV CEO
THE NEW REIV CHIEF EXECUTIVE HAS GONE STRAIGHT TO WORK REPRESENTING YOUR INTERESTS
I would like to begin by thanking you all for the opportunity to lead the Real Estate Institute of Victoria at such an important time for the sector. It is a privilege to represent each one of you.
In my short time at the REIV I have enjoyed the many meetings with members, stakeholders and partners to learn as much as I can about the sector and understand the key issues impacting each of you.
My aim is to provide timely updates on matters that are impacting our industry, and to engage consistently with you on solving the short and long-term challenges we are facing.
In order establish working relationships across the wide range of REIV stakeholders, I have already met with many government ministers and shadow government ministers, the CAV executive director, VCAT CEO, Property Council of Australia, Small Business Commissioner, Rental Commissioner and Tenants Victoria CEO (to name a few), and attended a range of consultation forums.
These meetings have given me great insight into matters that are of highest priority to our members.
It is my primary focus over the near future to build capability and capacity to be your single source of information, training and resources, to be your voice on all matters impacting your business and to support you in building a successful real estate business.
Member collaboration and engagement will be critical in delivering services that add value to your business. I look forward to working with you.
Member collaboration and engagement will be critical in delivering services that add value to your business. I look forward to working with you
Please don’t hesitate to contact me directly should a particular matter be of more concern or interest, I welcome the collaboration.
Kelly Ryan, REIV CEO
REIV INFORMATION OFFICERS JIM LOURANDOS AND CHRIS SNELL ADDRESS SOME OF THE COMMON QUESTIONS FROM MEMBERS
Easy way to avoid payment redirection scams
ADDING ONE SIMPLE STEP TO YOUR PAYMENT PROCESSES CAN HELP YOU AVOID FALLING VICTIM TO PAYMENT REDIRECTION SCAMS
Agencies can help to mitigate the risk to their clients and their agency from scammers in one simple step: contact the provider of relevant bank details – on the phone number you have on file – to verify the sender and verbally confirm the bank details nominated by the sender. Relying solely on email can be risky.
Here is a simple scenario:
• On Monday, the agency emails Sally (the vendor) to request her bank account details to transfer funds.
• Sally promptly replies by email and provides her ABC bank account details.
• Three hours later a scammer who has hacked into Sally’s email account sends an identical email but has included a ZXY bank account details.
• On Tuesday, the agency emails Sally asking her to confirm which bank account should be used.
Verbally confirm the bank details nominated by the sender. Relying solely on email can be risky
• The scammer responds, providing a new ABC account details for an account that doesn’t belong to Sally.
• The agency transfers the funds to the latest account, an account with the same ABC bank, but belonging to the scammer.
Had the agency phoned Sally to seek a verbal confirmation of her nominated bank account the wrong transfer into the scammers account could have been easily avoided.
FREE SHORT-COURSES FOR A LIMITED TIME ONLY
Improving leadership skills has become more accessible through the REIV e-learning platform PropEL. With a range of 19 courses covering strategic planning, communication, decision making and conflict resolution, it gives members convenient access to valuable resources to enhance their leadership abilities.
I want to learn more
Chris Snell
Jim Lourandos
REIV Information Officers
Soliciting listings
Soliciting other agents’ listings, or attempting to, is considered unprofessional behaviour by the real estate sector, the Estate Agents Professional Conduct Regulations and the enforcement arm of Consumer Affairs Victoria.
It is an offence to do so under Regulation 14 of the Estate Agents Regulations 2018, that is:
14 Estate agent or agent’s representative not to induce breach of contract
An estate agent or an agent’s representative must not knowingly induce or attempt to induce a person to breach a contract of sale, letting or agency or a contract of any other kind relating to the estate agency practice.
If there is a board on a property or it appears on another
agency’s website or there are other indications that another agency is very likely to have an unexpired, exclusive listing, especially in the case of an auction, competitors must not approach the vendor.
Activities such as emails or letterbox drops with references such as, “I have noticed your property has been on the market for 63 days, please do not hesitate to contact my office if I can assist you in the sale of your property,” are considered an attempt to induce a breach of contract.
If an agent is approached by a prospective client who may already have an exclusive authority with another agency, the proper course of action is for the agent to advise the prospective client that such discussions can only be initiated once the existing exclusive authority period has come to an end.
Minimum standards for rental energy efficiency and safety
SUBMISSION BY THE REAL ESTATE
INSTIUTE OF VICTORIA ON THE PROPOSED RESIDENTIAL TENANCIES REGULATIONS
AMENDMENT 2024
The Victorian Government is proposing extensive changes to the minimum standards around energy efficiency and safety requirements for rental properties and rooming houses. The government is seeking consultation following the release of its draft legislation and the accompanying regulatory impact statement (the RIS). This submission focuses on the RIS and examines the costs and benefits of the proposed regulations. The proposed standards are anticipated to be introduced in October 2024 and come into full effect from October 2025. The insights provided
in this submission are based on industry consultation and feedback.
The REIV welcomes considered improvements to minimum energy efficiency rental standards but has serious concerns over the viability of the proposed legislation. The REIV supports the objective of improving energy efficiency standards in households to reduce emissions. However, the proposed legislation places an undue burden on the residential rental market and its residential renter providers. The rental market is sustained through the balanced contributions of its stakeholders and requires legislative support to ensure that stability.
THE REIV’S POSITION
The Victorian rental ecosystem is under immense pressure, with acute shortages of affordable rental stock as RRPs are compelled to exit the market due to increasingly complex regulations and the rising costs of owning and maintaining an investment property in Victoria.
The REIV welcomes considered improvements to minimum energy efficiency rental standards but has serious concerns over the viability of the proposed legislation
In effect, the proposed standards, if implemented within their intended timeline, will force RRPs to appreciably raise rents to cover costs in an already constricted market. Additionally, it is likely to cause a sizeable cohort of current RRPs to sell their investment properties due to the incurred financial burden, an outcome that will further destabilise an already volatile rental market.
The REIV maintains that the government should provide expanded rebates or incentives, such as tax concessions, to assist with additional financial burdens RRPs incur in implementing new standards.
According to the RIS released by the government, the main problems that were identified as driving the need for reform are the following:
• Financial impacts on renters from inefficient and more costly appliances,
• Health impacts on renters from inadequate heating or cooling,
• Impacts on renters’ mental health, productivity and comfort levels, and
• Environmental impacts from greater emissions caused by inefficient appliances.
Whilst the REIV recognises the need for appropriate energy efficiency minimum standards within rental properties, the immediacy of the costs and implementation explored in the RIS indicate that more consideration should be given to how to bring new minimum standards into effect more fairly and effectively.
The REIV urges the government to reconsider its proposed implementation timeline and further consider the industry’s current capacity for assessment, implementation and compliance with new standards. Given the challenging nature of the proposed standards, forcing the financial and logistical capacities of the sector to implement them while navigating the current market conditions is likely to result in an accelerated reduction in available rental homes as RRPs continue to exit the market.
Unless the government can independently supply more dwellings across all types of housing, including social and affordable housing, private investors will remain key to fulfilling rental housing provision. Notably, almost 90 per cent of renters live in properties supplied by the private rental market, with a Parliament of Victoria inquiry demonstrating that 71 per cent of property investors only own a single investment property.
The ongoing government approach of increasing regulation and onerous property taxation is actively discouraging “mum and dad” investors from entering or remaining in the property investment market.
Given the current cost-of-living pressures, introducing significant new costs to rental properties within a short timeframe during a severe housing shortage is likely to negatively impact the rental market, with the effect being felt most significantly at the lower end of the market.
For the REIV’s membership specifically, the proposed minimum standards impose several new requirements and carry a range of compliance and associated risks. These include:
• Understanding new complex regulatory requirements,
• The lack of qualified personnel across all touchpoints,
• Unreasonable constraints given timelines and resources, and
• Changing goalposts around government expectations.
A June 2024 article in Domain indicated that property investors are already leaving Victoria in droves due to the impost of new land taxes. Despite the caveat that Victoria has realised the highest rate of first-home buyers in the nation, this does not rectify continuous rental shortages and unaffordability for those unable to enter the “buyers’ market”. This is supported by an Australian Financial Review article that reported more than 3000 property investors leaving Melbourne in May alone, effectively selling up more than 3000 rental properties and providing little certainty over the renting community’s security.
As noted, when property investors leave the market, the negative impact disproportionately affects the lower end
of the market. Lower-income renters, who are unlikely to be able to afford to purchase a home, are particularly vulnerable when an investor sells their rental property, forcing them into the incredibly competitive rental market to search for a new home.
Considering this, the REIV is seeking longer time frames and financial assistance for implementation. The appropriate rebate and incentive structures, including tax concessions, must be in place to retain RRPs and ensure that rentals stay on the market. The REIV supports quality housing outcomes for all participants within the rental ecosystem.
CHALLENGES OF LEGISLATION
Financial implications on RRPs
Any legislation triggering added costs or increasing an existing cost must be considered in the wider context of total overheads for maintaining a rental property. Financial implications for RRPs, including forcing RRPs to exit the rental market, are conceivable given the current level of regulation and property taxation imposed upon them. RRPs provide the crucial backbone of stability across the rental ecosystem and without their sustained participation in the real estate market, many rental properties would be withdrawn. This will only act to exacerbate supply issues, directly impacting renters.
It has been reported by news.com.au that RRPs are already feeling the financial squeeze. Sentiment within the RRP community demonstrated that ongoing cost increases between property taxes, interest rates and property maintenance costs are hurting them, leaving RRPs with little choice other than to increase their rents or sell their rental properties. Either consequence has a disruptive effect on the rental market and makes circumstances significantly worse for renters. Incentives must be implemented to induce investors to stay in the rental market and ensure its stability for renters.
The government must consider introducing incentives such as land tax rebates for property owners that are equal to the cost of implementing energy efficiency standards. This extends to current government-supported initiatives such as solar. Whilst the long-term benefits
to the state economy are well documented in the RIS, financial support from the state government to realise these gains would make this legislation feasible without hurting Victorian renters.
Shortage of tradespeople
There is currently a nationwide shortage of tradespeople – an issue the construction sector has long been vocal about. An SBS article from March 2024 indicated that 90,000 extra construction workers would be required to immediately build the new properties Australia requires to address our existing housing shortage. This number does not factor in the tradespeople required to maintain and upgrade properties.
Introducing new regulations that require additional sustainability-focused work on properties will likely cause
gridlock in the system that currently maintains rental properties. Victoria is competing fiercely with other states and territories to attract skilled tradespeople, a challenge that further tightens the trades market.
High-quality properties classified as unsuitable
There will be instances when RRPs are unable to bring a rental property up to the new minimum standards (ie shortages of tradespeople, supply chain issues, or financial constraints). In these cases, a property may have met the previous minimum standards and regulations but will fail to comply with the new minimum standards. Consequently, these properties may need to be removed from the market, making them unavailable to renters once the new standards are in place.
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Exemptions exacerbate issues around suitability
Without proper processes for identifying, documenting and monitoring exemptions, properties risk becoming “unqualified” for rental, leaving RRPs without the income needed to maintain and update them to appropriate standards. This situation forces renters to seek alternative accommodation. Without clearly defined frameworks for exemptions, more properties are likely to be withdrawn from the market due to compliance concerns.
Difficulty in compliance
The nature of any new compliance measures, including the recourse if there is a failure to adhere to them by RRPs or real estate agents, is unclear. Further, under Section 12.4 of the RIS, it notes that enforcement and compliance processes will remain under Consumer Affairs Victoria with no major adjustments to their operations. This is despite comprehensive changes in the areas of experience and expertise that would be newly incorporated under Consumer Affair Victoria’s remit, such as the inspection of insulation upkeep.
Under Section 12.5.1 and Section 12.5.2 of the RIS, which detail the evaluation activities of the Department of Energy, Environment and Climate Action (DEECA) and its adjacent government agencies and stakeholders, it is noted that the effectiveness of the regulations would be assessed against the analysis of non-compliance data from investigations and information supplied by VCAT.
Further stakeholder consultation with industry bodies is required to determine how effective the minimum standards are in practice. This requires further clarification on what data is used and how it is applied to
ensure that compliance measures are understood by the relevant parties.
Further, new requirements will necessitate suitably qualified professionals such as insulation experts, electricians and plumbers to assess properties before an RRP can consider the rectifications. These tradespeople can be costly to engage for even the most minor compliance checks. Given the varying degrees of scale in which standards must be rapidly implemented, it could feasibly run into the thousands for the simplest measures described in the proposal.
Gaps in education
The current minimum standards are commonly misunderstood, causing issues with compliance. Further engagement and education with relevant stakeholders would help ensure compliance improvement and prevent further bottlenecks within tribunal services between RRPs, renters and real estate agents. Compliance is likely to worsen without the correct educational mechanisms in place, taking more properties off the market and destabilising the rental ecosystem further.
RECOMMENDATIONS
The REIV commends the fundamental ambition of minimum energy efficiency and safety standards in the long term and recognises the importance of comfort within a home. Listed below are the REIV’s key recommendations that we offered – and hope will be given consideration – to assist the state government in realising the objectives of its standards without substantially impacting the rental market for the worse.
Financial assistance for RRPs
It risks a significant reduction in rental supply in Victoria as RRPs will be forced to sell up due to high ongoing costs
The government will need to provide financial assistance to RRPs who are unable to absorb any additional costs following the recent increases in taxation, compliance with minimum standards recently introduced in 2021 and rising interest rates. Additional costs for energy-efficient upgrades must be seen in the context of the range of additional costs, some of which are substantial and unanticipated, in addition to any existing property taxes imposed on RRPs. The government must include direct
PROPOSED STANDARDS
Standard Trigger for compliance
Blind cord safety anchor
Must be compliant by October 30, 2025
Ceiling insulation Must be compliant from October 30, 2025 where there is a new rental agreement or conversion from fixed term to periodic rental agreement; and where there is no ceiling insulation present
Cooling
Draught proofing
Heating (residential properties)
Heating (rooming houses)
Must be compliant from October 30, 2025 if there is no existing cooling, where there is a new rental agreement or conversion from fixed term to period rental agreement and where there is existing cooling, at the end of life of the existing cooling systems. From October 30, 2027, all rental properties are to have a fixed cooling system
Must be compliant from October 30, 2025 where there is a new rental agreement or conversion from fixed term to periodic rental agreement
Must be compliant from October 30, 2025 from the end of life of the existing fixed heating system
Must be compliant by October 30, 2025 where there is no existing fixed heating system; or must be compliant from October 30, 2025 where there is an existing fixed heating system in the bedroom, at the end of life of the existing fixed heating system
Hot water system Must be compliant from October 30, 2025 from the end of life of the existing fixed hot water system
Shower head
Must be compliant from October 30, 2025 where there is a new rental agreement or conversion from fixed term to periodic rental agreement
financial assistance and incentives such as the land tax rebates described above, or it risks a significant reduction in rental supply in Victoria as RRPs will be forced to sell up due to high ongoing costs.
Transitional periods and prioritising standards
A 12-month period is inadequate for a comprehensive assessment and rectification process if the rental market is expected to achieve widespread compliance. Different properties have varied needs regarding implementing minimum standards, and a lag or transitional period for compliance should be considered.
For instance, properties already well-insulated and cool in the summer might be unfairly burdened by stringent cooling standards, potentially forcing landlords to remove or sell the rental property due to logistical or financial constraints despite renters being content living in the property in its existing condition.
Industry feedback suggests a 36-month lead time for full implementation, particularly for costly work addressing conditions already covered by other standards. This ensures properties remain broadly compliant.
Current pricing for tradespeople indicates that costs could be significantly higher than predicted in the RIS’s modelling. This applies to all proposed standards except for the blind cord safety anchor and showerhead installation. Few landlords have the financial capacity to absorb all proposed costs in the short term. Additionally, the availability of tradespeople to undertake compliance checks, installations, and upgrades is limited. Realistic expectations are needed regarding the trades industry’s capacity, especially with concurrent private sector and government projects.
Transitional periods should prioritise standards. If ceiling insulation is effective enough to eliminate the need for cooling, it should take precedence while other priority standards are addressed across the rental market. Since these standards can complement each other, a statewide approach should prioritise the most urgent standards.
Compliance training
Introducing all measures simultaneously would require structural reform in how compliance is applied within the rental market. This would benefit all stakeholders by ensuring a sufficiently educated workforce to support the objectives of the minimum standards. The recent establishment of the Rental Taskforce by Consumer Affairs Victoria has shown that there is still significant misunderstanding and non-compliance with the current minimum standards. Adding another layer of complex compliance will likely exacerbate this issue.
The government should develop clear documentation, forms, and communication for all stakeholders regarding
all minimum standards. Numerous cases have emerged where unscrupulous service providers have exploited rental provider’s lack of understanding, charging unreasonable prices or providing incorrect advice. Clear and accessible communication would help prevent such exploitation and ensure a smoother transition to the new standards.
Clarification around exemptions
Clarification regarding exemptions and the process to seek them is essential. Establishing a clear, documented format for requesting and recording exemptions would enhance transparency for all stakeholders and reduce the potential for exploitation.
The government should develop comprehensive registers for properties granted exemptions. These registers should include details on the nature of the exemption, the conditions for maintaining exempt status, and records of who conducted the last inspection and when it occurred. This approach ensures ongoing compliance and accountability, benefiting all parties involved.
Sector education
Education on all new standards is paramount and must be implemented by the government in coordination with Consumer Affairs Victoria. This education should extend to both rental providers and renters to prevent any miscommunication of obligations. The documentation must be easily accessible and free from technical jargon to ensure that all parties clearly understand their rights and responsibilities. This approach will foster better compliance and understanding across the rental market.
CONCLUSION
The REIV supports the state government’s objectives for the improvement of energy efficiency and safety standards in rental properties but strongly urges the government to reconsider the timing of the rollout.
Without adequate financial support from the government, any moves to force further expenditure on the maintenance of a rental property will likely negatively impact the state’s rental supply significantly. While the climate objectives are essential and welcomed broadly by the REIV, any further factors that will accelerate the loss of properties from the rental market will be detrimental to renters.
With all of this considered, the REIV is seeking financial assistance for RRPs to implement minimum standards and extension of transitional periods. The appropriate rebate and incentive structures, including tax
Any further factors that will accelerate the loss of properties from the rental market will be detrimental to renters in Victoria
concessions, must be in place to retain RRPs and ensure that rentals remain on the market. The REIV will continue to support quality housing outcomes for all participants within the rental ecosystem and encourage the settings that promote its ongoing stability. The REIV is seeking to prevent RRPs from exiting the market as a means of protecting the interests of all stakeholders, particularly Victoria’s growing body of renters.
Essential safety measures for commercial properties
IT IS ESSENTIAL THAT A COMMERCIAL PROPERTY MANAGER HAS A GOOD UNDERSTANDING OF THE REGULATIONS AROUND ESSENTIAL SAFETY MEASURES
The building regulations require that essential service items within commercial properties be serviced and maintained. In 2008 the building regulations introduced mandatory annual inspection of the essential safety measures.
Essential safety measures are the fire and life safety items installed or constructed in a building to ensure adequate levels of fire safety over the life of the building. Noncompliance with these regulations is a risk for occupants of the building, passers by and adjoining buildings.
A standard commercial management authority requires that agents manage the client’s exposure to compliance and essential safety measures. As such, it is essential that a commercial property manager has a good understanding of the requirements of the building regulations.
The term essential safety measures is defined in Part 15 of the building regulations, and includes a range of servicing requirements for different equipment, including the maintenance of exit doors and paths of travel.
Agents and landlords may also be exposed to civil claims in the event of an incident
An Australian Standard for each piece of equipment outlines the servicing period, which will also be outlined on a certificate of occupancy. Depending on the classification of a commercial building, different essential safety items will be included. Ultimately, the regulations provide that the building owner remains responsible for maintaining the essential safety measures within the building, and for obtaining the annual essential safety measure report.
While compliance is the landlord’s responsibility, the lease may permit recovery of the costs from the tenant providing the are disclosed correctly, particularly under the Retail Leases Legislation.
Buildings built before July 1, 1994
If the building was built before July 1, 1994 the owner is responsible for ensuring that any safety equipment, safety fittings or safety measures are maintained and fulfilling their purpose. This includes exits and paths of travel to exits.
Buildings constructed or altered since July 1, 1994
If the building was constructed or altered after this date the list of essential safety measures, including their performance level, frequency and type of maintenance required would be included in an occupancy certificate or certificate of final inspection. The owners of all buildings built or altered since this date must have a current copy of the building’s occupancy certificate on display in the building.
Essential service contractors should be appointed to inspect, test, maintain and repair the essential service items as required. Different contractors may be required
depending on the equipment, as some essential safety items extend to lifts, heating and cooling equipment which can be linked to the base building fire services, and also for kitchen exhausts.
Councils have responsibility under the Building Act for the enforcement of building safety within their municipality.
Annual ESM reports must be made available within 24 hours if requested by Fire Rescue Victoria/the Country Fire Authority or a municipal building surveyor. An infringement notice can be issued. The municipal building surveyor or chief officer of the relevant fire authority is responsible for the enforcement of the maintenance provisions of the regulations.
Building occupiers (tenants, invitees) have an obligation to ensure all exits and paths of travel to exits are kept readily accessible, functional and clear of obstructions. Building owners must ensure that an essential safety measure is maintained so that it operates satisfactorily.
Any changes or alterations to an existing building may require upgrades to essential safety measures within the building. A municipal building surveyor or private building surveyor will advise on any changes required to comply with the Act and regulations.
It is critical that property managers, even those with just a few commercial properties, have a good understanding of managing essential safety. Penalties for non-compliance can range from $290 to more than $17,000 for an individual and more than $88,000 if a company is prosecuted. Agents and landlords may also be exposed to civil claims in the event of an incident.
The REIV will hold an online essential safety measures course on Wednesday, October 30 for those managing commercial properties
Expand your knowledge
IF YOU’VE BEEN CONSIDERING LEARNING A NEW SKILL TO EXPAND YOUR CAREER OPTIONS OR SIMPLY BUILD A DEEPER UNDERSTANDING, REIV SHORT COURSES CAN SET YOU ON THE RIGHT PATH
COMMERCIAL PROPERTY MANAGEMENT
Commercial property management courses continue to be our bestsellers – for many they open up the possibility of diversifying into commercial real estate and pursuing a new career, albeit in the same sector.
It’s important to be aware that the legislation, skills and documentation are completely different for commercial and retail (versus residential). The Introduction to Commercial Property Management course is a great foundation for newcomers, or for those bridging from residential property management.
For those with up to three years’ experience in commercial property management, the Intermediate Commercial Property Management course addresses next-level skills like renewals and notices, workshopping real-life challenges and uncovering new solutions.
Help us to understand your Professional Development Training needs. Please email your suggestions or feedback, or if you’d like to pitch a training idea. Email us here
SALES – COMPLIANCE
Compliance training remains a hot topic. The REIV has used member feedback, CAV engagement and other sources to refresh and refocus our short courses to upskill members and assist you in running compliant businesses. To this end, two new compliance-focused courses will be available from late August.
Sales Trust Accounting Fundamentals
For people just starting out with sales trust or those who want to fill knowledge gaps and increase their confidence, this course makes no assumptions about prior knowledge. At completion, participants will be well-placed to work in Sales Trust accounting and support their OIEC in understanding and fulfilling compliance obligations.
Sales Compliance Champion
Every business needs that one person (or more) who oversees sales file compliance – documentation, price quoting, advertising etc. This course empowers participants to champion a culture of compliance in their sales and admin teams, to implement a lean compliance checkpoint process, and provide in-house compliance advice to the whole team.
CONTINUED ON PAGE 22 >>
UPCOMING EVENTS AND TRAINING
Date
August 13 Competition Novice Auctioneering Competition – Heats REIV
August 20 Competition Novice Auctioneering Competition – Finals REIV
August 27 Webinar Growing a Real Estate Business Through Acquisition Online
August 29 Short course Sales Trust Accounting Fundamentals NEW REIV
September 4 Webinar Inside PM – 12 Month Rental Data Insights and BD Strategies Online
September 6 Short course Sales Compliance Champion Training NEW REIV
September 17 Webinar Short-term rentals for PMs and OCMs Online
September 18 Short course Introduction to Residential Property Management REIV
September 19 Webinar Cyber Security Online
September 23 Short course Introduction To Commercial Property Management REIV
October 2 Webinar Inside PM - New Business Development and Multiple-property Owners Online
October 7 Short course Intermediate Commercial Property Management REIV
October 8 Webinar Succession Planning for Real Estate Directors Online
October 21 Short course Act as a Buyers Agent REIV
October 24 Short course Trust Accounting Refresher REIV
October 24 Event REIV Awards for Excellence Crown Palladium
October 28 Short course Intermediate Residential Property Management REIV
October 30 Webinar Commercial – Essential Safety Measures Online
October 31 Short course Introduction to Residential Sales REIV
November 11 Short course Introduction To Commercial Property Management REIV
November 12 Webinar Employment Law Online
November 13 Short course Inside PM - REIV Advocacy and Policy Updates with CEO and President REIV
November 14 Short course Introduction to Owners Corporation Management REIV
November 28 Short course Sales Compliance Officer Training REIV
ONLINE SELF-PACED LEARNING – “REIV PROPEL”
Our online offering features an evolving catalogue of real estate courses, as well as personal and professional development training. Until the end of October, all members and member-office employees have free access to more than 70 personal and professional development courses on topics including Leading Teams, Project Management, Cultural Awareness, Networking, Privacy and SelfCare. All courses carry CPD hours.
Access the catalogue here
In real estate specific content, August will see the release of updated versions of:
Family Violence Awareness
An eye-opening course which looks at the human impacts of family violence. Rich with real stories, it provides signposts to identify potential victims and
perpetrators, how to have safe and compassionate conversations, where to access help, and how to maintain safe boundaries. Initially written for residential property managers, this course contains great insights for anyone, whether in a personal or professional context.
Starting a Real Estate Agency
This short course walks through many of the decisions and requirements as you consider setting up your own Real Estate business. Fully updated and interactive, it’s a great tool to assist with your early decision making.
Training with your peak body gives you access to amazing trainers who are experienced, working on the tools, and committed to ‘paying it forward’ in the industry. Come learn with us and experience the difference.
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A slow, cold winter begins to break
AS THE WEATHER WARMS UP, THE MELBOURNE PROPERTY MARKET STARTS TO COME OUT OF ITS HIBERNATION
It’s the time of year that many people in property take holidays; a good move considering how slow real estate can be in winter. This year has been particularly slow but the forward markers for spring look solid.
MELBOURNE – SLOW BUT STEADY
Melbourne has been sluggish since the surge in listings at the start of the year began tailing off in May. While C-grade properties and trophy homes are struggling, it’s interesting to note some property types are travelling quite well. As REIV’s June Quarter 2024’s report shows, most of this year’s energy is for houses around or a bit above Melbourne’s median price.
Miriam Sandkuhler, CEO of Property Mavens and REIV member
The areas with leading annual performances include Parkdale (18.4 per cent), Coburg North (12.8 per cent), Footscray (10.1 per cent), Lilydale (8.1 per cent) and Ringwood North (13.8 per cent). Agents will note that while these areas attract buyers with different tastes, it’s the hunt for the classic family home which brings them together.
Excluding areas where the sale numbers are too small, leading annual unit performances include Bentleigh East (10.9 per cent), Blackburn (15.8 per cent), Brunswick West (8.8 per cent), Caulfield North (12.7 per cent), Dandenong (9.1 per cent) and Prahran (9.0 per cent). Again, a wide variety of suburbs by taste but all areas with established units offering good amenity.
The other standout news is a little hidden in the performance numbers. But ask any buyers agent and they will tell you there are a lot of first-home buyers poking around. Their number has increased by around 7 per cent this year. That’s good news for vendors around the $460,000-$600,000 bracket, with established units doing well but high-rise “investor” units struggling.
REGIONAL BLISS
That first-home buyer trend has also been good for some regional cities, with Geelong and Ballarat especially becoming sought-after destinations for young buyers.
Ballarat is offering good bang for buck with A-grade homes holding their value (mostly). But many of the B-grade and C-grade properties, like the ones spruiked by ‘fly by night’ advisors a couple of years ago, have found the going much tougher, with falls in value of around 10 per cent common.
MELBOURNE CAN BE GOOD VALUE
There are signs of a slow return of development-focused investors. We recently bought a great site in Melbourne’s inner west for a client with the possibility of building three to four units on a large housing block. We expect to see more enquiries like this over the coming months and that’s good news, as buying activity by smaller developers is a strong leading indicator.
Ask any buyers agent and they will tell you there are a lot of first-home buyers poking around
For investors generally it’s been a tale of two different markets. We’re still seeing a good stream of investors coming through, with high-income professionals favouring residential property as an investment. On the other hand, we’ve seen the exit of some long-time investors thanks to land tax increases. Mostly, this is a tale of older, lower income landlords cashing in their gains and avoiding tax bills.
Looking forward, some signs are clear but others a bit cloudy. The rental market is still very tight, paving the way for increasing rents and returns for investors. While most analysts expect interest rates to head lower, they have been telling us this is imminent for quite some time. While Melbourne has been in the slow lane, 2024’s leading cities, notably Perth (18.9 per cent), have been propelled forward by the perception it is a great value buy after its growth dawdled. Applying that same lens in the second half of 2024, Melbourne is looking like it’s great value.
PARTNERING UP
One of the positives for us at Property Mavens is the partnerships we have developed with agents across Melbourne and in regional cities. We work with agents in two different ways. The first is where we as a Vendors Advocate jointly market a client’s property for sale. This typically works out very well, especially when a client wants discretion for an off-market sale.
The other way is where agents work with us to draw our attention to properties they have listed. While we get dozens of “laundry lists” every week, it’s those agents who curate their list to show us A-grade properties in the suburbs we are looking to buy in which get the most attention.
AUSTRALASIAN AUCTIONEERING CHAMPIONSHIP
In a strong show of skills, style and charisma at the 2024 Australasian Auctioneering Championships in Hobart, Luke Banitsiotis outperformed finalists Alec Brown (ACT), Bronte Manuel (SA), Clarence White (NSW) and Paul Hancock (NSW) to claim the title.
An experienced senior auctioneer and partner of Woodards Blackburn in Melbourne’s East, Luke is a three-time REIV Senior Auctioneer of the Year. His runner up placement at the REIV’s 2024 Senior Auctioneering Competition led to his successful campaign for the Australasian prize.
The Australasian Auctioneering Championships is an annual event representing some of the highly skilled and professional auctioneers that Australia and New Zealand have to offer.
The Championships are conducted jointly by the Real Estate Institute of New Zealand (REINZ) and the Real Estate Institute of Australia (REIA).
The Australasian Auctioneering Championship brings together the winner and runner-up of each of the Australian State REI Auctioneering Competitions and the winner and runner-up of the national REINZ Auctioneering Competition.
Become an Owners Corporation Manager
ENTRY QUALIFICATIONS
Under Victorian statute, with one exception, an owners corporation (“OC”) is not required to engage a manager, however, a manager is not permitted to receive remuneration from an OC without holding a licence. An OC made up of more than 100 occupiable lots must appoint a manager unless it chooses not to by special resolution.
Any person wishing to become an OC manager must be over the age of 18, without a criminal record, must apply to Consumer Affairs Victoria, pay an annual fee to the Business Licensing Authority and hold professional indemnity insurance of no less than $2 million.
There are no minimum qualification requirements and there are no requirements to undertake continuing professional development (CPD), though this is likely to change.
An OC manager may now join the REIV without becoming an estate agent.
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OC MANAGEMENT AS DISTINCT FROM PROPERTY MANAGEMENT
OC management is a specialised field of property management. There are pros and cons in pursuing this career, but the skills obtained in mastering competence will uniquely provide tools that are essential to combat most of life’s challenges whatever one’s future endeavours may be.
Primarily, a property manager’s role is a contractual agreement between an estate agent and a registered proprietor on title to manage a tenancy that is either residential or commercial. The manager would be required to have a comprehensive understanding of the Residential Tenancies Act 1997 or the Retail Leases Act 2003, where applicable, and a strong relationship between manager and tenant is fundamental.
In contrast, the relationship between an OC manager and a tenant is tenuous. The members of an OC are lot owners, not tenants. The function of an OC is to administer repair and maintenance of common property including chattels, fixtures, fittings and services related to the common property or its enjoyment, to carry out other functions conferred by legislation and to undertake administrative procedures such as the payment of insurance premiums and the maintenance of records. The OC is provided powers that are necessary to enable it to perform its functions.
FUNCTIONS AND POWERS OF AN OC
The Owners Corporations Act 2006 (“Act”) prescribes six entities, including the OC
and the OC manager, that must act in good faith and must exercise due care and diligence.
There are circumstances where engagement between a tenant and the OC manager may occur. The tenant is classed as an occupier. An OC may, by special resolution, provide a service to a lot owner or an occupier. In circumstances where an OC may authorise a person to enter a lot for the purpose of necessary repairs, an occupier must be given notice unless there is an emergency. Occupiers have duties and rights including making complaints and commencing legal proceedings. Where an occupier is not the lot owner, all OC
communication is invariably with the lot owner or with their managing agent.
Many property managers may not have full understanding of the role of an OC manager. There is growing awareness of this problem and agent’s representative courses are encouraged to include elements of OC management in the training program.
COMMON MISCONCEPTIONS OF OC MANAGERS
OC managers are solely responsible for all decisions related to the building or property
While OC managers play a crucial role in managing the day-to-day operations of a building or property, they ultimately work under the direction of the OC committee. The committee is responsible for making important decisions such as approving budgets, maintenance plans and major repairs.
OC managers are responsible for resolving all disputes amongst occupiers
While OC managers can help mediate disputes, it is not their responsibility to resolve conflicts. They may facilitate communication and provide guidance, but it is ultimately up to the parties to work together to find a resolution.
OC managers are only concerned with collecting fees and managing finances
While financial management is an important aspect of their role, OC managers also handle a wide range of responsibilities, including property maintenance, compliance with by-laws, communicating with lot owners, and organizing meetings. They are dedicated to ensuring the overall wellbeing and operation of the building or property.
While OC managers can help mediate disputes, it is not their responsibility to resolve conflicts
OC managers can make decisions without consulting the OC committee
OC managers are bound by the decisions and directions of the OC committee. They must seek approval for major decisions, such as significant expenditures or major projects, and keep the committee informed of all actions taken on behalf of the building or property.
OC managers are not necessary and can be replaced by self-management
While some OCs may choose to self-manage their properties, OC managers can offer valuable expertise, experience, and resources to effectively manage the operations of a building or property. They can help streamline processes, handle complex tasks and ensure compliance with regulations and rules.
THE SKILLS DEVELOPED MANAGING OCs
• The first response to a problem is to ask whether the issue involves the OC. This requires the ability to correctly interpret a plan of subdivision to determine the boundaries where common property lies. Often, the OC must obtain expert advice to locate the source of the problem. Exploratory costs may initially be borne by the OC until the cause is established. Reading plans is a skill and is a recurring topic in most CPD programs.
• A competent manager must understand the Act and regulations including model rules and additional OC rules plus other relevant legislation. A knowledge of complaint procedures and decisions in key cases is desirable notwithstanding that it is not the OC manager’s role to provide legal advice.
• Accounting skills are required to develop and understand budgets, profit and loss statements and balance sheets.
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• Conduct of meetings, voting rights, quorums, ballots, resolutions, election of committees, proxies, powers, duties and rights are basic ‘everyday’ requirements.
• Dispute resolution processes and advocacy skills may be useful in resolving small matters.
• A study of ethics and the requirement to act appropriately and in good faith are critical attributes.
• Debt recovery procedures.
• The development of communication skills in and out of meetings with both lot owners and external providers and trades, dealing with difficult and sometimes toxic lot owners and perhaps vexatious and frivolous litigants can be testing. That may include coping strategies to deal with unreasonable committees that require meetings after hours, unacceptable deadlines to gather reports and unworkable demands such as three quotes to replace a washer.
• Obtaining quotates for insurance, valuations, processing claims and strategies where claims are denied.
• Asset management: undertaking repairs and maintenance.
• Disposal of abandoned goods.
• Record keeping and legal obligations.
THE CHANGING LANDSCAPE OF OCs
The dynamics of OCs are changing, as has the Australian dream of home ownership. Without assistance, it is rare for a first homeowner to purchase a house and one is fortunate to buy an apartment at a young age. Highrise complexes are predominantly residential with some mixed-use development. Legislation requires future maintenance plans to be budgeted and funded annually. Complexes that include lifts, gymnasiums and swimming pools are expensive to maintain.
Differences in opinion on how common areas should be maintained, disagreements over financial decisions,
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conflicts over use of facilities, or disputes over rules and regulations create discord that can lead to tension, hostility, and even legal battles. It is important for lot owners to communicate effectively, compromise and work together towards finding solutions that are beneficial for everyone involved. Mediation or seeking professional assistance may also be necessary to resolve conflicts and to prevent further discord within the OC. Facility management is a separate specialisation that cannot be taken for granted.
OC management is no longer a menial task. There is significant competition amongst managers to hire competent staff who in turn, expect to be well remunerated. The industry requires high standards and financial rewards. Managers who perform well and who offer service will not only survive; they will also flourish.
CONCLUSION
Community living requires compromise and essentially yielding to the demands of the majority. On the one hand, there is a loss of independence. On the other, there is the advantage of enjoying, to some degree, living in a serviced apartment. Managing such an environment may develop skills, finely honed over time, that may prove to become a useful resource in dealing with many other challenges that life presents. Generally, dealing with people is not easy. As an OC manager, it cannot be avoided. Hence, there is opportunity, and that opportunity should be embraced because only through experience can one learn and develop.
Effective communication, commitment, adherence to ethical standards and the desire to learn are the substrate on which we grow. Those qualities sit comfortably in the habitat created by this choice of career.
Real Estate Matters: The REIV Podcast
The latest episode of our podcast Real Estate Matters has just been released. In discussion with REIV President Jacob Caine, Luke Piccolo of Woodards South Yarra and Cate Bakos of Cate Bakos Property give insight into the industry challenges forcing up rents, how investor sentiment is changing in the Victorian market, and the Victorian Government’s legislative changes around rental standards and their impact on rental providers.
Real Estate Matters is REIV’s platform for informed, expert-led conversations on the topics that matter to real estate professionals and enthusiasts.
New episodes air every six weeks.
VicForms
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RESIDENTIAL RENTAL
Residential Rental Agreement (135)
General Letting and Managing Authority: Residential Property (004)
Exclusive Letting and Managing Authority: Residential Property (005A)
RESIDENTIAL SALES
Contract of Sale of Real Estate (118)
General Sale Authority (001)
Exclusive Sale Authority (002)
Exclusive Sale Authority: Off the plan properties (002A)
AUCTIONS
Exclusive Auction Authority (003)
General Letting and Managing Authority: Commercial/Retail/Industrial Property (004A)
Exclusive Authority for the Purchase of RE and/or Business (006A)
Commercial Lease Schedule (144)
Guarantee and Indemnity (142)
Renewal of Lease (150)
Combined Commercial Contracts (143, 144, 144A)
Commercial Lease (143)
Commercial Lease Special Conditions Schedule (144A)
Rental Minimum Standards Checklist
Required disclosure by residential rental provider
Property Management Landlord Checklist
Service Provider Agreement
Property Management trades/contractor agreement
RESIDENTIAL SALES
Request Estimate of Selling Price
Material facts checklist for Sale of land Act
Vendor Checklist
Auction Bidding Form
Estimate of Selling Price
Expression of Interest Form
Residential Property - Vendor authorisations for price representations and for Consideration of enquiries and offers
Rural Vendor Checklist
Guarantee Warranty Indemnity
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What is Build-to-Rent?
WE UNPACK HOW THE BUILD-TO-RENT SECTOR WORKS AND WHAT IT MEANS TO REAL ESTATE PROFESSIONALS
Build-to-rent (BTR) is an innovative response to rental housing shortage. As both state and federal governments continue to plan policy measures to overcome Australia’s chronic housing challenges, unconventional approaches to bolster housing supply and affordability are sometimes necessary.
The build-to-rent model is a more recent approach to rental provision that aims to attract large-scale investment and development while providing stock specifically for the rental market under defined conditions. Although some differences exist on what constitutes build-to-rent, it is, in effect, a large strata-type arrangement run under a singular property ownership structure. Uniquely, build-to-rent accommodation provides rental housing that cannot be sold or subdivided later.
To draw investors towards partaking in build-to-rent projects, various governments locally and abroad have offered attractive tax concessions and planning arrangements that often supersede existing schemes to facilitate new developments quickly. The REIA has delved into the built-to-rent model in their report Build to
Rent: A Market Analysis. The REIA’s report characterised the build-to-rent model as “simply rental stock held in company ownership, usually in medium- to large-sized multi-dwelling apartment-style buildings. In addition to local institutions, smaller local private developers and major offshore investors are also entering the market with new developments, in many cases in partnership with one another.”
It should be specified that the build-to-rent model is not necessarily a rental option that has been developed with affordability in mind; it is geared more towards renters keen on certain amenities and lifestyle. While a government report demonstrates that all varieties of tenants may live in built-to-rent developments, members within the working groups surveyed indicated an appeal to renters for built-to-rent developments due to the assumed:
• Communal and open space offered
• Higher-end service offering provided
• Greater level of additional services
• Quality of the finished development
This unique housing model is an attractive proposition that captures higher-income renters under secure tenancy conditions.
For property management specialists within the buildto-rent space, this unique housing model is an attractive proposition that captures higher-income renters under secure tenancy conditions. As the sector continues to expand, particularly given the government’s commitments to densification under its Housing Statement sitting alongside an increasing country-wide demand for rental stock on the market, build-to-rent property management will become a more common responsibility among agents with plenty of room for growth opportunities.
GOVERNMENT LEGISLATION
To encourage investment and foster growth within the sector, the federal government announced a legislative proposal for tax concessions in April 2024 around build-to-rent dwellings to welcome more capital into the industry. As the national representative body for the real estate sector, the REIA made a submission to the federal government on behalf of the industry detailing its impressions of the considered proposals.
In principle, the legislation around built-to-rent is somewhat akin to existing legislation that impacts the property sector. Despite this, specific criteria are used to determine what qualifies as built-to-rent and to lay out the incentives for investors and other parties to encourage industry uptake as the demand for buildto-rent projects grows. As the stakeholders range from developers to property management experts, it is prudent to pay attention to the legislation affecting the sector, particularly as renters are increasingly interested in living in the growing build-to-rent developments.
Though the basic premise is relatively simple, the criteria that governments use to qualify build-to-rent require slightly more attention. The Victorian government’s State Revenue Office has stated that to be eligible for buildto-rent tax land tax discounts, developments must satisfy the following conditions:
• Be on a parcel of land with a new or substantially renovated building on it
• The building must have been constructed or renovated for dwellings under residential leases
• The building must contain at least 50 self-contained dwellings
• The building must be under a unified ownership structure
• The building must be managed by a single entity
• The dwellings must have a starting occupancy date between January 1, 2021 and December 31, 2031
• The dwellings must be available under residential rental agreements as defined in the Residential Tenancies Act 1997
• The dwellings must each offer a lease agreement of at least three years (the renter may choose a shorter period)
• The rental agreement must not be subject to any restrictions except those required to ensure public health and safety or to provide social or affordable housing.
The criteria above sit in line with the REIA’s definition of build-to-rent as mentioned above. However, it does place guardrails around what cannot be excluded when classifying a build-to-rent development, such as the modernity of the build and the length of the residential
To learn more about managing a Build to Rent development, contact the REIV for bespoke training.
Email us here
tenancy agreement. This contemporaneity and security of the rental agreement are two of the most attractive attributes for those seeking build-to-rent rental housing.
Beyond the state incentives to become involved in the sector, the federal government has proposed tax concessions to developers to drive investment and construction in the build-to-rent space. The .
Central points of the government tax legislation include its intention to reduce the withholding tax rate on fund payments from managed investment trusts from 30 per cent to 15 per cent and increase the capital works deduction rate.
Beyond that, there are ongoing legislative proposals around the minimum number of dwellings within a project to be offered as affordable tenancies, which is currently set to be 10 per cent, and how long the grouped dwellings must be under single ownership, anticipated under the legislation to be a minimum of 15 years.
The legislation above offers several possibilities for those in the real estate sector. Firstly, the grouping under a build-to-rent project must have at least 50 self-contained dwellings. Looking beyond potential tenancies under social and affordable housing arrangements that may fall away from the responsibility of property managers, there is considerable opportunity for agents to manage a lucrative number of properties under the same roof whilst specialising in a niche property management arena. Secondly, the set length of the residential tenancy agreement provides cloud cover for agents to avoid the breaking of leases or miscommunication of intent between the renter
and the agent or commercial rental providers. Further, this fosters longstanding relationships between renters and rental providers as they know they will each be expected to remain accountable for the property for a lengthier period.
Government proposals to encourage investment align with the REIV’s tax reform agenda that the best practice is to introduce supportive taxation settings for new projects in the development pipeline. While the REIV, in line with kindred organisations, will continue to advocate for effective tax reform across the state and federal governments, the benefits of promoting rental housing supply through incentives will lead to benefits across its membership’s interests. As property taxation is one of the most impactful components of the real estate sector, including through its flow-on effects on supply constraints when implemented incorrectly, the REIV welcomes proposed changes that will increase the provision of rental housing across the state.
Cyber crime in the real estate industry
WHY CYBER CRIMINALS MIGHT TARGET REAL ESTATE AGENTS, AND HOW YOU CAN PROTECT YOUR BUSINESS
An email telling you you’ve won a few thousand dollars; a voicemail demanding unpaid taxes – by now, there wouldn’t be many of us who haven’t been targeted by such scams. While many of us know better than to take these seriously, the reality is that cyber crime has been estimated to cost the Australian economy $42 billion. The real estate industry is one that is increasingly being targeted by cyber criminals and as you may have seen from a recent attack, the threat may be a lot closer to home than many real estate professionals realise. Here is an overview of what cyber crime in the real estate
industry entails, how agents can prepare their businesses, and how Cyber Insurance can help.
WHY ARE REAL ESTATE AGENTS AT RISK?
There are few businesses that aren’t at risk of cyber attacks in some way, but a few aspects of real estate businesses make them a particularly appealing target. Firstly, you’re likely to hold a lot of personal information on your clients, including bank account details and forms of identification. This type of information is valuable for cyber criminals as it provides them with an easy avenue for identity theft, where cyber criminals steal personal information to, generally, steal money or gain other benefits. Another reason for real estate businesses being a lucrative target is their involvement in facilitating highvalue transactions, with large amounts of money passing
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through various accounts and settlement platforms. In addition, small businesses tend to be an easier target for cyber criminals as they may not have the resources to protect their assets and data compared to larger organisations. The combination of these factors has created the ideal environment for cyber criminals to hone in on unsuspecting real estate agents in their attempts to infiltrate their networks and systems.
WHAT COULD GO WRONG?
Cyber crimes and attacks can take many forms, such as malware, ransomware, business email compromise, phishing and much more. To demonstrate a few examples of how real estate agents in particular may fall victim, here are a few of Aon’s clients who have fallen victim to cyber attacks:
• House Real Estate1 discovered its computer system had fallen victim to a ransomware attack one morning. In attempting to access the agency’s server, a message displayed on screen demanding payment of US$5000 (via Bitcoin).
• An employee at ABC Real Estate1 received an email which looked like it was from their energy provider. When the employee clicked on the link in the email, malicious malware in the email proceeded to lock down the agency’s computer network.
• Homey Real Estate1 sent an email to their client asking for bank account details to transfer money for a deposit. The agency received an email that appeared to have come from the client with bank account details and transferred the money into this account. It turned out that the email chain had been compromised by a hacker in the US, and the money had in fact been transferred to the hacker’s account.
WHY THE CLOUD IS NOT FOOLPROOF
It might be easy to assume that because you use a cloudbased application or provider, your systems are immune to unfortunate cyber incidents.
But it’s important to remember cyber crime goes beyond hacking of your virtual networks – even using a computer in the office means that the device itself may be hacked. Furthermore, your data being stored in the cloud does
not completely secure it from unauthorised access, use, theft, deletion or cyber extortion. Privacy breaches may result from unexpected sources such as a disgruntled employee.
STEPS FOR PREVENTION
Aon’s real estate insurance expert Peter Lynch outlines three basic steps for cyber security in the industry:
1. Network security: This is the first line of security that any computer system must provide to stay protected from malicious attacks. It covers the way computers are connected to the internet and protects all networkconnected equipment including laptops, servers, printers even smartphones. Common features of network security are firewalls which regulate how internet traffic can be handled or blocked from third parties.
2. Staff education: Educating staff during the onboarding process and at regular intervals can help them understand the importance of cybersecurity, recognise potential threats and adopt good security habits to help protect themselves and the company from cyber threats.
3. Multi factor authentication: A security mechanism that requires one or more additional verification factors on top of username and password. This is an extra layer of security, making it more difficult for attackers to access sensitive information.
Read more about staying cyber safe
HOW CAN CYBER INSURANCE HELP?
The steps outlined above are all sensible measures to help reduce the likelihood or severity of cyber crime, but your business may still fall victim to cyber attacks and crime. Cyber insurance has been designed to help protect businesses against financial losses arising from cyber attacks and crime, and should be considered by businesses with a digital footprint assessing their insurance options.
Aon is proud to be a partner of the REIV
1Names anonymised for privacy reasons.
Why we need to shift our thinking on the housing crisis
WHY AFFORDABLE, SOCIAL AND PUBLIC HOUSING MUST BE REDEFINED AS ECONOMIC INFRASTRUCTURE
Everyone knows that Australia is in the midst of a housing crisis. Firstly, in terms of its general affordability and secondly in terms of the availability of homes for key workers such as police, firefighters, nurses and teachers (affordable or workforce housing) and for the socially disadvantaged (social or public housing). Rather than continuing this discussion as a social issue, it is vital that we also recognise it as an economic one. By housing all Australians, rich or poor, we minimise the long-term costs to a future society that result from the unintended consequences in areas of mental and physical health, family violence, justice, policing and long-term welfare dependency. This provides both a challenge and an opportunity, especially for the timber prefabrication industry.
It is estimated that the current shortfall of affordable/ social housing nationally is well in excess of 500,000 new dwellings. In a 2021 review of the National Housing Finance and Investment Corporation (NHFIC), which
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Robert Pradolin, former general manager for Frasers Property Australia, founding director of Housing All Australians
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is now called Housing Australia, federal government actuaries quantified the housing shortfall at $290 billion. This is too big for governments to solve alone, and it must engage the private sector and unlock new forms of capital to fund the investment needed.
The challenge we have is to elevate the discussion into the national consciousness so that all Australians realise the long-term economic cost and social implications that we pass on to our grandchildren if we don’t address this significant housing shortfall. This requires a long-term investment approach and will require an annual pipeline of additional housing to be delivered over several decades.
The opportunity for industry is to create new financing, development and construction approaches that are able to achieve this new additional supply, at scale, without putting an upward pressure on costs. The only way this can be achieve is by prefabrication becoming mainstream. Approaches integrating a significant amount of timber prefabrication into the construction process, as was done by Frasers Property Australia at The Green in Melbourne, have shown it can reduce construction costs and construction timeframes.
In many US cities including New York, Chicago and San Francisco, both sides of politics understand the importance of housing key workers and believe that investing in social and affordable housing makes good business sense. It is seen as good for the economy, as it brings workers close to their jobs and lowers the overall cost to government (and ultimately taxpayers) of providing services. It generates jobs and makes for a happier society, and a happier society leads to an increase in productivity.
The scale in the shortfall of affordable/social/public housing problem is so significant, it needs a quantum shift in thinking
It’s no different in Australia. Well placed, affordable housing for key workers, located in areas where society needs their services, and public housing, where tenants have ready access to existing infrastructure and services also makes good and rational business sense.
In Australia today, crime, suicide, domestic violence and depression are huge problems which have both social and economic consequences. In 2022, Housing All Australians commissioned an economic report by SGS economics into the long-term costs to Australia of not providing sufficient social and affordable housing. It calculated that the additional cost to Australian taxpayers by 2032 will reach $25 billion a year and growing. It also determined that a very attractive cost-benefit ratio of 2:1 existed for the creation of housing that mitigated long term government (read taxpayers) costs. It actually makes good business sense to build more homes.
The scale in the shortfall of affordable/social/public housing problem is so significant, it needs a quantum shift in thinking both about the issue itself and its social and economic consequences. We need new and innovative funding mechanisms that minimise any short term impact to respective federal and state budgets, otherwise it can’t be funded. Governments on their own cannot fund everything needed to produce this type of housing and therefore must unlock the use of private capital.
The reality is that we have to start to see affordable, public and social housing as ‘economic infrastructure’ — just like privately funded roads, tunnels, hospitals and schools, all of which receive some form of government subsidy. Such recognition will mobilise private capital and change the dynamics so that it will become economically viable to invest in this essential type of housing. We need this investment to secure the long-term economic wellbeing of our cities and society and it will take decades to deliver. Housing All Australians is the economic platform needed to ensure Australia’s future prosperity.
A tremendous dividend is also available to industry in participating in delivery of this new housing supply, and the prefab timber industry must play a significant role. However, it still needs to demonstrate the benefits of
prefabrication and how it has matured and modernised into providing cost effective and aesthetically attractive options, at scale. But it won’t happen unless we, collectively and proactively, make that happen.
We can do this by demonstrating to the general public (and government) that the prefabrication industry acknowledges the economic impact that housing stress is having on society, that we are concerned with the long-term costs we are leaving our grandchildren and that we must invest in more economic infrastructure called housing. The question is, how does the prefabrication sector deliver that message?
I was privileged to present at the recent FTMA Conference and shared my views with industry leaders that timber prefabrication must be part of the solution. But we have a perception problem with a number of key stakeholders. The only way to address that is by leading with a high-profile demonstration project.
I outlined to the audience one such project that we, Housing All Australians, are assisting with in Marrickville in Sydney. While it is a significant investment towards a charitable purpose, I see it as a great marketing
opportunity in demonstrating how using timber prefabrication can transform Australia’s housing landscape and help solve Australia’s housing crisis. I strongly believe that purpose and profit are not mutually exclusive.
But we have no time to waste. We must all collectively unite in the pursuit of a more compassionate and economically prosperous Australia, and we can only do that through strong leadership from business.
We must give it our best shot. The only thing we have to lose is the future we want for our grandchildren.
members
Sadeq Abbass
Jack Abdo
Connie Ablas
Massimo Andrighetto
Chantel Antonio
Anna Aoun
Mick Arora
Ravinder Arora
Angelo Bafunno
Tessa Barkley Mohit Batra
Shadiya Bedi
Gerald Betts
Harjot Bhullar Nathan Birch
Toni Bloodworth-Barker
Nicholas Blow M Krishna Bodke
Bonnici Ciaran Brannigan
Caraco
Carbery
Dhillon Nick Dinakis Stephenie Exton
Mark Faranda
Anthony Ferraro
Shane Finch
Sven Fischer
Rachael
Tarnbir Gill
Jade Haderup Ryan Hooper
Andrea How
Chun Kong Hui
Sarah James
James
Raj Kapoor
Gaurika Kohli
Peter Konidaris
Andrew Koulaouzos
Brooke Lal Rocky Lay Nicole Le
Leach
Leskie Andrea Lever
Christine Lewis
Lou Lihari Vicki Likoudis Alise Lim
Jack Liu
Tobias Livermore
Lok Kristie Looney
Andy Lusi
Andrew MacGillivray
Khatira Maqsoodi Trent Marden
Lucrezia Marino
Max Marro
Toni Maynes
John McCann
Kelly McLachlan
Sonia Mehta
Cassandra Menniti
Kosta Mesaritis
Karen Mitchell
Tom Molinaro
Amit Morsky
Srikanth Muthukumar
Waheedullah Nawandish
Christie Nelson
Ian Nichols
Kevin Ng
Richard Nyko
Evan Pang
Lee Pang
George Pangalos
Leah Panos
Hayley Pemberton
Adriano Persichetti
Kenny Pham
Abraham Pitros
Alana Prideaux
Cameron Prosser
Diljot Randhawa
Marty Rankin
Christos Raptis
Tanesha Richter
Kerryn Rishworth
Tim Romeril
Mitch Rosam
Rachel Ross
Bella Russel-Pearce
Nazer Sarao
Ella Sayers
Julia Scardamaglia
Brayden Schmidt
Fahey Scott-Younger
Bonnie Shang
Marina Shatalova
Karan Singh
Mandeep Singh
Sukhjinder Singh
Laurel Sloan
Michael Sloan
Melissa Solomon
Rebecca Smith Ye Song
Mrugesh Soni
Cherie Sun
Michael Taylor Jo Thornton
Kirsty Trimper
Anshul Trivedi
Spiro Vasiliadis
Hai Yen Vo
Phong Vo
Puneet Wadhawan
Gill Williams
Ryan Withanage
David Woods
Roy Xin
Chirag Yadav
Alan Yildiz
Hubo Yu
Pan Zhang
Garry Zhou
Chuan Zuo
Longstanding member Bruce Ludeman passed away after battling illness on Monday, July 29 2024. A member for more than 38 years, Bruce served the membership with participation on a number of REIV Committees including Business Brokers, Members Council and as the Western District representative. The REIV team sends its condolences to Bruce’s family.
VALE BRUCE LUDEMAN
Milestones
WE CONGRATULATE THE MEMBERS WHO COMPLETED IMPORTANT MILESTONE MEMBERSHIP ANNIVERSARIES BETWEEN MAY AND AUGUST 2024
50-YEAR MEMBERS
Ian Armstrong
Brett Gamon
Frank Callaghan
Shane Lowe
40
10 YEARS
Member profile
WHILE OUR MEMBERS MAY BE DIRECT COMPETITORS IN THE MARKET, THE INSTITUTE IS AN OPPORTUNITY TO BRING IDEAS TOGETHER AND WORKS TOWARDS BUILDING A STRONG, SUSTAINABLE REAL ESTATE SECTOR. IN THIS ISSUE THE EA TALKS TO LUKE MULCAHY, PROPERTY MANAGER AT GROSS WADDELL ICR AND NEW REIV MEMBER.
What has been your real estate career journey?
I started early with a work experience opportunity in Year 10 (2013) at a residential agency in Ballarat. My first paid job would be in Year 11 working as a leasing executive on Saturdays for open for inspections, which I absolutely loved. I took a break from work when I went off to study a Bachelor of Commerce majoring in Management & Marketing at Deakin University in Geelong.
I was keen to get back to work and joined Ray White Highton in Geelong as a residential property manager. The four years at Ray White taught me a lot, often through trial and error. Eventually Colliers Geelong offered me an opportunity in commercial property management. They too had a good learning culture like Ray White Highton and I was able to leverage off the senior property managers based out of Colliers Ballarat.
Finally, I moved to Gross Waddell ICR in Melbourne CBD leveraging their twodays-a-week work from home culture, which allowed me to commute from Geelong.
Considering you have worked in both residential and commercial real estate, what do you prefer?
While both are based on real estate transactions, residential is definitely a lot more emotional for people. You are dealing with their homes so its not just about the numbers, there is a lot more to it.
Commercial and industrial real estate transactions can be more about finding pragmatic solutions. It is often more focused on business viability, so you need to really know your numbers.
Any key learnings that you would like to share?
Be thorough, know your client, the property and the tenant.
In commercial real estate, the lease and the tenant’s business are vitally important aspects – know them and understand the implications on the long-term relationship.
Stay on top of relevant dates, and make sure you have all the documents you should have from a tenant before a property is handed over be it in a sale or new lease. This can save you huge headaches later.
What is the biggest issue you are currently facing in your job?
The rising cost of construction has far-reaching impacts, it is now translating into higher insurance premiums for tenants. Tenants are finding these increases difficult to cope with. On the other side, high land tax for landlords is forcing them to sell. We have commercial property owners who have more than 50 per cent of their rental income going towards land tax.
After the challenges of the Covid-19 restrictions it is disheartening for landlords who are still being targeted to cover the cost of the lockdowns. The land tax is simply too high.
How has the industry changed over the years?
A lot has moved to electronic communications. While residential estate probably still relies heavily on conversations, commercial clients seem to prefer emails. I find that people are also more conscious of litigation issues and prefer written communication.
With most property management software now on apps, this also means that we can work effectively and efficiently from anywhere, giving us a lot more flexibility.
Why did you choose to be a member of the REIV?
Being an REIV member is about credibility, especially when dealing with clients and tenants.
On a personal front, it provides an avenue to now give back to the real estate community via the REIV. During my career I have trained staff at each agency I’ve worked in. Being part of the REIV opens up the potential to share my experience and knowledge with a wider audience.
YOUR INSTITUTE, YOUR OPPORTUNITY
IT’S BEEN A BUSY FEW MONTHS AT THE REIV, AS WE TACKLED OUR FEELINGS WITH A FOOTY LEGEND AND LUNCHED WITH THE STATE OPPOSITION LEADER
Intermediate Residential Property Management course. Tackle Your Feelings with former Collingwood player and coach Nathan Buckley in May.
Greg Brydon conducts the Good Friday Appeal auction.
REIV’s Senior Auctioneering Competition took place in April.
Cert IV in Real Estate Practice, in-person classes remain a popular way to learn.
