Experts Call For A Dedicated Property Services Commissioner
In the lead up the 23 March State election, The Office of Fair Trading NSW has come under fire from the REINSW.
To tackle major issues under the current model, REINSW has been running a vocal campaign calling for the appointment of a dedicated Property Services Commissioner to oversee the industry in place of Fair Trading.
REINSW CEO Tim McKibbin is adamant that Fair Trading is ill-equipped to adequately regulate the industry, to the detriment of the consumer.
“Residential real estate is a high value, low volume, high risk investment that requires better levels of education and professionalism than NSW Fair Trading can mandate.”
Multipart Finance director, Tim Russell believes the appointment of an industry specific regulator is a necessary change.
“The real estate industry is Australia’s largest wealth creation source, totaling $7.5 Trillion. To put that into perspective, superannuation totals just $2.5 Trillion. To not have a government body specifically dedicated to overseeing compliance and best customer outcomes for real estate is alarming.
“Real estate agents and others in the industry should be held to the same regulatory standards as mortgage brokers and financial planners,” says Russell.
Fair Trading not up to the task
Property expert and Geared For Growth Property Investment Podcast host Mike Mortlock, questions the appropriateness of Fair Trading’s position as the current regulator.
“In addition to the property industry, Fair Trading look after 40 other industries including plumbers and tattoo parlours. Real estate has fewer transitions but much higher values so it’s very different to most other industries and needs people that understand the industry policing it.”
McKibbin maintains that “expecting the same people at Fair Trading who represent consumers when buying a toaster or getting a haircut to then step up into complexities of a property transaction is ludicrous.
""A property transaction is a very serious undertaking, there is no room in the transaction for the ill-equipped.”
Education and training key
In 2003, Fair Trading NSW cut the training requirement for real estate agents from three years to an incredible four days, despite the fact that real estate agents are responsible for assisting consumers to transact their most valuable asset.
Since this time, REINSW has been driven to increase education and service delivery standards within the industry.
“The pursuit of professional recognition has been met with NSW Fair Trading’s go-to phrases: ‘barriers to entry’ and ‘reducing competition’.
""A better educated real estate agent who receives relevant and structured continuing professional development will better serve the consumer’s needs and interests. Unfortunately, it seems we’re alone in this belief,"" says the REINSW CEO.
A dedicated property industry regulator
McKibbin suggests that a dedicated, “Property Services Commissioner will be able to advise government on best outcomes to remove legislative red tape and improve consumer protection, as well as support the drive to increase education, service delivery standards and consumer satisfaction through the property services industries.”
“It will also provide a single centralised overview of legislation and regulation that impacts residential, commercial, strata and rural property.”
Ultimately, REINSW is seeking to work more closely with a competent regulator that understands the industry. McKibbin states, “the industry, and more importantly consumers, need a regulatory authority that will work in a collegial manner, and support it. Industry’s current relationship with Fair Trading is adversarial, which benefits no one.”
Mortlock agrees and concludes that “the real estate industry isn't looking for a person to influence or a back channel, they are actually crying out for more regulation, in a bid to support better consumer outcomes.”