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ISSUE 15
WHAT’S INSIDE 2-5
Property insights: In-depth analysis of Q1 FY22
6-7 International: How overseas markets are faring and what this means for our sector 8-9 News: Digital settlements coming to the ACT by the end of 2021 10-11 Security: The Australian Cyber Security Centre provides guidance on email scams 12-13 Industry: The law firm director with a background at Apple bringing a new lens to CX
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Queensland property market soars despite a soft start to spring across Australia By Stuart Allott
Queensland was the only mainland state to record quarter-on-quarter growth in property sale settlements, with more than 59,000 settlements processed in the first quarter of the 2022 financial year, according to PEXA Insights, the research arm of PEXA – Australia’s leading digital property settlement platform.
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The quarterly Property and Mortgage Insights (PMI) report provides unique insights into property settlement and mortgage trends across the major Australian states.
The report outlines that although there was a softening of Australia’s property market when compared to the previous quarter, more than 210,000 sale settlements were recorded (up 34% year-on-year) worth more than $183 billion (up 78% year-on-year).
The trends that matter in Australian property between July to September 2021 Queensland leads all mainland states for volume of property sale settlements, recording +59,000 property sale settlements (up 3% on the previous quarter, and 42% year-on-year) worth more than $42 billion (up 93% year-on-year).
+42% Sept 20 qtr +3% Jun 21 qtr
• Greater Brisbane experienced 62% growth year-on-year for the month of August. • Surfers Paradise came in 6th across the nation for suburbs ranked by total number of sale settlements year to date.
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The New South Wales property market was clamped by the extended COVID-19 restrictions, recording +58,000 sale settlements (down 4% on the previous quarter, but up 29% year-on-year) worth more than $71 billion (up 80% year-on-year).
+29% Sept 20 qtr
-4% Jun 21 qtr
• Recent declines were more evident in Greater Sydney where extended lockdown restrictions were implemented. • In a trend that continues from the previous financial year, the regional centres of Port Macquarie, Orange and Dubbo all demonstrated strong property sale settlements across the quarter. In a similar story to New South Wales, Victoria’s property market recorded +56,000 sale settlements (down 5% on the previous quarter, but up 34% year-on-year) worth more than $50 billion (up 79% year-on-year). • Both Greater Melbourne and Regional Victoria experienced a decline in sale settlements from the previous quarter, however Greater Melbourne experienced the sharper drop likely due to the extended lockdown restrictions implemented across the region. • After an uplift towards the end of 2020, Victoria’s commercial property market has shown little growth throughout 2021, with a decline over the past three months.
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+34% Sept 20 qtr
-5% Jun 21 qtr
There are signs the property markets in both Western Australia and South Australia may have peaked given both states witnessed a quarter-on-quarter decline of sale settlements in the absence of notable restrictions. • Western Australia recorded +23,000 sale settlements (down 4% on the previous quarter, but up 36% year-on-year) worth $13 billion (up 62% year-on-year).
WA
-4% Jun 21 qtr
+36% Sept 20 qtr
SA
+20% Sept 20 qtr
-8% Jun 21 qtr
• South Australian recorded +14,000 sale settlements (down 8% on the previous quarter, but up 20% year-on-year) worth more than $7 billion (up 35% year-on-year). “Queensland was certainly the standout performer of the September quarter for Australian property, showing no signs of slowing down and posting more sale settlements for the quarter than the larger states of New South Wales and Victoria. “These are the first quarter-on-quarter declines we’ve seen this calendar year for property sale settlements across Australia, the extended lockdowns in both New South Wales and Victoria have temporarily slowed momentum.
looking closely at the important spring selling season in the coming months,” said PEXA Insights Head of Research, Mike Gill. The PMI report also analyses consumer lending and mortgage trends, with new loans declining nationally since 1 July 2021, following a similar trend to sale settlements. However, new loans were still up 39% year-on-year for August, suggesting consumer demand remains strong.
A state-by-state analysis of competition within the lending sector “It appears that highlights a tale of two halves for property markets in both Western Australia Australia’s major banks. and South Australia “Australia’s top four banks have further may have hit their solidified their leading market position peak for settlement for new loans in Victoria, New South volumes, with both Wales and South Australia, however states experiencing declines in the they have lost ground in recent months September quarter. However, we know to customer-owned and domestic that volumes commonly dip during the banks in both Queensland and Western colder winter months, so we will be Australia,” said Gill. 5
Property in a post-COVID world It’s been a challenging 22 months since Australia’s first confirmed case of coronavirus back in January 2020 – but there is light at the end of the tunnel. As more countries continue to embrace “COVID-normal”, increased vaccination rates are now enabling our states and territories to follow suit, in line with the plan developed by the National Cabinet earlier this year. This roadmap is underpinned by a commitment to transition away from “pre-vaccination” settings, which focused on suppression of community transmission, and toward “postvaccination” settings, with significantly eased restrictions. Locally, New South Wales and Victoria have been the hardest hit jurisdictions over the past two years. And all eyes will be on the pair as they complete wholesale re-openings in the coming weeks. But what can we expect within these traditional powerhouse property
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markets in the months ahead, as we seek to recover from the pandemic? There are noteworthy observations to be made from our international colleagues. Post lockdown spike in the United Kingdom Much was made of the UK’s ‘Freedom Day’ back in July 2021 – but indisputably, one of the key trends in recent months has been a remarkable real estate boom. Dubbed the ‘race for space’, house prices in the UK experienced the strongest month-on-month rise for 14 years in September 2021, according to major lender Halifax. The latest monthly data represented an all-time record for dwelling values and saw a 7.4% spike year-on-year – demonstrating a clear post-COVID boom.
Sky-high prices in Canada
And just three of these endured house price falls in the first three months of this year – the fewest since the data series was first captured in 2000.
There’s been heated debate in Canada, particularly in the lead-up to its recent federal election, about its current What’s next for us in Australia? housing crisis. A common view held is that prices are being driven up by a lack Record low interest rates and the of supply. desire for a change in lifestyle are certainly stirring up buyer frenzy. However, data from the Canada Mortgage and Housing Corporation Sales settlements in New South (CMHC) indicated that home Wales and Victoria were down on the completions started to outpace previous quarter, but up year-on-year population growth last year. in September, per the latest data from PEXA Insights. And by the fourth quarter of 2020, 18 homes were being built for every It’s worth noting that unlike other person the population grew by. countries, thanks to Australia’s digital property exchange capabilities, What’s most notable, is that while transaction volumes were able to be September saw some stability return sustained in spite of restrictions. to the sector, property prices have continued to soar throughout 2021. But with the worst of the lockdowns seemingly behind us, the Spring high Widespread growth season not yet over and clear surges The Organisation for Economic Cohaving been witnessed abroad upon operation and Development (OECD) is progression to a COVID-normal world, made up of 38 member nations. it will be fascinating to see how our market behaves in the months ahead.
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First digital conveyancing transaction to occur in ACT by end of 2021 By Stuart Allott
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PEXA is excited to confirm that it has recently received formal approval from the Registrar General to operate as an Electronic Lodgment Network Operator (ELNO) in the ACT. Today’s announcement follows the passing of legislation by the ACT Government in 2020 to welcome digital settlements into the Territory, bringing Australia’s property industry one step closer to achieving a nationally consistent electronic conveyancing solution.
“This is an exciting milestone for the industry, made possible by exceptional collaboration between the ACT Government, the broader property sector and financial institutions.” Since 2014, more than 8.1 million transactions have occurred via the PEXA Exchange.
Today, more than 80% of all property settlements in Australia are processed PEXA’s Group CEO, Glenn King said: digitally, with this number to increase “We are delighted to bring the following the anticipated adoption security and efficiencies of a digital property settlement platform to ACT within the ACT. home buyers and sellers and hope PEXA will continue to work closely to have the first ‘live’ transaction go with the ACT Government, financial through the PEXA Exchange by the institutions, and legal practitioners end of 2021. through the onboarding process and final testing phases prior to going live with consumer transactions by the end of the year.
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Buying a house? Selling a house? Protect yourself online By Jarrod McAleese
Residential property is Australia’s largest asset class – today, the sector is worth more than $8 trillion. It’s a vital pillar of our nation’s economy, particularly as we seek to rebuild and recover from the disruption caused by COVID-19. With the significant finances involved in the purchase or sale of a property, unfortunately, real estate agents, legal practitioners and homebuyers and sellers alike are a natural and popular target for potential cyber criminals. This is a trend which has been 10
confirmed by the Australian Cyber Security Centre (ACSC). “The ACSC has observed a growing trend of cybercriminals targeting the property and real estate sector to conduct business email compromise (BEC) scams in Australia.
“Cybercriminals will impersonate parties to a property transaction and insert illegitimate bank details for settlement or rental payments. Victims assume this request is legitimate and will unknowingly send payment to the cybercriminal’s bank account.” a recent statement said. The ACSC’s Annual Cyber Threat Report for 2020-21 revealed that BEC is one of the top five categories of cybercrime. Average reported losses increased by 54 per cent compared to the previous financial year.
Financial impact According to the Australian Competition and Consumer Commission (ACCC)’s Scamwatch, in 2020, $176 million was lost to scams in Australia. The total number of reported scams also rose 23.1% yearon-year to a total of 216,089. Additionally, in its latest Targeting Scams report, business email compromise was the number one contributor to financial losses within Australia – costing organisations $132 million in 2019.
How to navigate this risk All parties involved in the buying and selling of property should be vigilant when communicating via email, particularly during deposit or settlement periods. The ACSC recommends to: passphrases to help prevent • Verify payment details: If any unauthorised access. party to a property transaction says they have updated their • Be aware: Learn to identify bank details, take extreme care suspicious emails, including to confirm these changes are requests to change bank legitimate. Remove email from the account details or emails linking equation by calling the sender’s to fake websites. The latter established phone number, may be a phishing attack which meeting them face-to-face, or could capture passwords and corresponding through PEXA Key compromise account security. before transferring any funds. • Update your software and • Secure your email account: devices: Cybercriminals hack Knowing cybercriminals will devices using known weaknesses attempt to access systems in systems or apps. Updates through compromised passwords, contain security upgrades to fix it is recommended that individuals these weaknesses. Regularly and businesses enable multiupdate your software and devices factor authentication on email to stay secure, including email accounts and use strong servers if you have them.
For more cyber security advice, visit the ACSC’s website at cyber.gov.au. 11
A unique CX lens amidst Queensland’s property market bonanza By Jarrod McAleese
Queensland’s property market is truly excelling. Having largely avoided extended COVID-19 lockdowns, the sector has thrived in recent months, with data from PEXA affirming this. The Sunshine State was the only jurisdiction to record quarter-on-quarter growth (September quarter vs June quarter) in sales settlements, per the latest Property and Mortgage Insights Report released by PEXA Insights.
haven from COVID-19. Increasingly, we’re seeing lockdown weary New South Wales and Victoria residents making the move north, with many buying sight unseen.
Queensland also usurped traditional eastern seaboard powerhouses to facilitate the most property transactions nationwide during this period.
This is driving prices higher, with buyers really working hard to compete in what is a seller’s market. Combine these factors with the Olympics announcement for Brisbane, and it’s an ideal recipe for activity,” Sourris said.
George Sourris, Director, Empire Legal has witnessed this market boom firsthand and believes that there’s been a perfect storm fuelling consumer behaviour. “Property in Queensland is travelling better than ever – we’re a bit of a
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And Sourris and his team have identified notable trends which demonstrate how entrenched the seller’s market is at this time.
“In the current climate, gone are the days of the traditional “subject to sale” clauses (committing to buy a property subject to the successful sale of the purchaser’s property). We’ve not seen a single transaction with these clauses since COVID-19 arrived on our shores.
the lessons I learnt from my time there have enabled me to look at the legal industry in a different light.
“I try to maintain a laser-focus on two key priorities: client and employee experience. These underpin what my business partner Abi Wright and I have instilled as the lifeblood of our “Buyers are scrambling and doing business – the culture. We feel our whatever it takes to try and secure magic comes from looking after staff. a property. Properties are selling for astronomical amounts – and often well By doing that, they then in turn look over the vendor’s fabled “dream price” after our clients. in auction scenarios. If a contract falls “When you combine this ethos through, there tends to be multiple with seamless client-to-firm other buyers lined up and eager to communication, you’re able to deliver capitalise – which shows you how hot exceptional customer experiences,” the market is,” Sourris said. Sourris said. A different approach to customer This holistic commitment means that experience Sourris and his team set the bar high within their ranks. The spotlight is well and truly shining on legal practitioners at this time – and “Anything less than a 5/5 rating by our Sourris brings a unique portfolio of clients (and peers) is an opportunity to experience to the profession, having improve the Empire Legal experience. previously spent five years working We have been asking our customers at Apple, including venturing twice since day 1 to review our service and to the global giant’s headquarters in have organically grown our business to California, USA for invaluable training. almost 1000 Google reviews, with an “I left Apple after half a decade, armed average star rating trust score of five with a unique toolkit. Without a doubt, (out of a possible five),” Sourris said. And with an unprecedented number of Queenslanders and interstate citizens alike requiring the services of legal practitioners, now more than ever, the onus is on firms to get creative and find new ways to ensure they meet the needs of their clients.
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