Why it’s time to get professional about real estate
January 31, 2019 - Blog
For more than 100 years, the Real Estate Institute of New South Wales (REINSW) has been fighting for the real estate sector to be classified as a profession.
Not only is real estate the largest industry in the State, it is a sector where transactions are high value, with most people making the biggest financial commitments of their lives when they buy a property.
Yet, the educational standards for anyone who wants to work in real estate remain ludicrously low.
Can you imagine a financial planner, for example, only needing to complete a minimal amount of study before advising people on how they should invest their money?
Of course, you can’t, but that is the situation in the real estate sector.
I am a proud member of the REINSW as well as a representative on its buyer’s agent committee.
We are currently campaigning for increased educational standards to improve consumer protection, which is severely lacking.
Don’t get me wrong, the majority of people in real estate are hardworking and honest individuals.
However, when someone only needs to complete a course that often takes just a week to start transacting real estate, it stands to reason that the service levels can vary dramatically.
Not only do we believe that the barriers to entry should be higher to protect consumers, but it will also reduce the high churn rate in the industry as well.
That’s because about 80 per cent of people who make a start in real estate have exited the sector within just 12 months.
That’s because the property profession has an unrealistic reputation as being easy to get into but once you start working, pots of money will seemingly magically appear.
Of course, that is a fallacy with the majority of agents earning average wages at best.
It is only the very best performers, whether they’re buying or selling agents, or property managers, who can earn superior incomes.
And the reason why they can do that is that they usually have years of experience as well as undertake regular professional development to remain at the top of their field.
The REINSW campaign lobbied the NSW Government and Opposition for much-needed reforms in the lead up to the State Election and continues to do so.
One of the reforms is moving responsibility for the real estate profession away from the Department of Fair Trading to a Property Services Commissioner within the Premier & Cabinet’s department.
This would move the real estate, planning, surveying and conveyancing sectors under a common strategy and direction to:
- Understand the key issues affecting real estate, housing supply and planning in NSW from a position of industry experience and knowledge.
- Supporting the drive to increase education, service delivery standards and consumer satisfaction through the property services industries.
- Advise government on best outcomes to remove legislative red tape and improve consumer protection.
The campaign is also asking for stamp duty rates to be urgently reviewed given they have not changed in 30 years.
Today, the median house price in Sydney is $985,000, attracting stamp duty tax of more than $40,000.
This creates a significant barrier to entry into the property market, takes homeownership out of reach for many NSW residents, and removes incentives for retirees to downsize.
Residential real estate is a $107 billion industry annually in NSW which obviously needs to be treated with the professionalism that it has always deserved.
You can also find out more about the Pathway to Professionalism campaign here: https://reip2p.com.au/