FEAR & GREED | Business NewsBuying and selling property is full of little challenges - things that could be streamlined to make research easier, bidding at auction easier, downsizing or upsizing easier. Alice Stolz, National Property Editor at Domain, and Fear & Greed's Michael Thompson put together the list of seven ways to improve the property market in Australia - if only they had a magic wand.
Welcome to the Property Pendulum, brought to you by Domain and Fear and Greed, the podcast that tells you which way the property market is going to swing and how to make the most of it. I'm Michael Thompson and I'm joined by Alice Staltz, national Property editor at Domain, and as I've been saying every week, one of Australia's foremost experts on all things real estate known to audiences are right around the country for her work on nine including the Block. Hello Alice, Hello Michael, Alice. Today is our final episode of the Property Pendulum for this season. We are going to dream big. We are going to take out a magic wand right and figure out what property Nirvana would look like in Australia. Basically, kind of what would we change about the housing market, How would we adjust the way that we buy and sell houses and apartments in this country that would make it fairer for buyers, fairer for sellers, take out all those little frustrations that you and CaCO along the way, and just generally make it easier for people to make the most of the property market in this country. So I know that that, and the episode actually came about because as we've been going through I've been sensing these little frustrations within you, Alice, that like when we talk about things, you're like, oh, this could be so much better. So today I want you please to give me these seven things that you would do to change and improve the property market in Australia. Let's jump straight into number one. What would it be?
I love this, Michael. I feel like I better not let the power go to my head. I feel like it's like kids in charge today. Look, first of all, I reckon transparency. I think every person who is selling their house should nail their asking price to the cross, to the listing, to the contract of sale, to everything. There should be no ambiguity around what the vendor wants for the price of that house. Now that the benefit is buyers are not wasting their time on properties that are well beyond their reach. And the benefit for the seller is they haven't got buyers who can't afford the price that they want for the house looking at the house and potentially sort of tearing other people. If there's lots of open for inspections and that's really packed, you know other people have going on. It's just too hard. Busk we'm going to walk out of it. But people are often there because of a low price. So if we actually know the truth about it, I just think we'll have a lot more efficient ways of buying and selling.
Because we've talked about this on a previous episode about the frustration that comes from say a price on application or something like that, where it just adds one more barrier. Doesn't it to an easy property search? And you should be able to search for properties easily knowing what you can afford, and really it helps you target exactly the properties that are in your price range.
That's right. I mean in Victoria, we do obviously have a price got is published with the listing, so that is a price guy based on comparable sales in the area, and that may end up differing for what the vendor actually wants to get for their house. It's not to say it can't be revised, but at least an honest as I said, Naylor to the cross and actually that's your number, I just think it would make save a lot of people a lot of time.
I think you're absolutely right, and you know it. There's also one kind of an overarching theme as well that's running through much of what I suspect is going to be covered today is national consistency on these kinds of things as well. Wouldn't that be great just to have the same set of rules all over the place. So what works in New South Wales or what works in Victoria is applied everywhere.
And now you're going to want to change daylight saving to be all national as well, aren't you, Michael?
Yes, daylight saving is fantastic and should be all over the place. I realize actually even saying that it raises all kinds of complications for Western Australia and everyone else. So let's move past that one. Transparency of price, big tick from me. Number two.
Okay, indulge me here, Michael, But I would like to be able to obtain information that I genuinely care about when I'm looking at a property. Now, for me, that's something such as liverability. Now we know that there are annual studies one each year by places like Deloitte and other think tanks. Whether we'll talk about the liverability in a suburb, how much walking one can do easily on quiet streets, how many parks are in the area, how far the restaurants and cafes are in. All of that sort of data I find fascinating and I want to know all of that about every single house that's on the market.
So you're saying, go beyond say, the school catchments and things which are already kind of included, particularly if it's quite a desirable school catchment that you're in, but go beyond that to really kind of go to the things that matter to people once they are living there.
That's right, because on paper a price might look like it's had great growth, it's in an amazing school zone where everybody is incredibly clever and well rounded. But is the area livable? Is there a cafe end of three? Is there a park to take your kids on the weekend? Can you go off leaf there things that people actually care about. Now on that topic, I think another thing that people care quite deeply about, and it's becoming even more so, is the idea of how sustainable the property is. Now in the act you have to actually publish how many stars that the house comes with it's sustainability star rating. It's by law they have to publish that. I think we should have that across the country as well. I think vendors who or owners sorry who are you know who are doing a lot to kind of make their house sustainable, which will end up potentially considerably lowing the cost of running that house to potential buyers down the track. That should be published. And I'm not talking about what you think you are your how sustainable you think your house is. I'm talking factually what it is in terms of the certification it's awarded. Yeah.
Absolutely, and that's actually quite a scientific process of measuring exactly what has been done to the property to improve its environmental sustainability, all of those things, and it is, it's it's quiteifiable. Then you can actually put it on a listing and do an easy comparison. Then, so I love it. So can we broaden that one out just to basically say an overhaul of listings basically, And that way we can kind of maybe move away from some of the euphemistic language that we're talking about before, where you've got to have basically this thesaurus to go through and go okay, all right, so that's saying distress sale or motivated seller or renovators to light this means this, this means this actually tell us exactly what we want to know exactly.
And on that note I also want if for the brave enough, I'd also like to know what your the house is renovated and how much that person is spent on it. I'd also like to know if there's any optionality around flexible in terms of settlement. And I would also like you've given me this wand Michael, I'm going to enjoy using it, building and pest reports attached to it along with strata everything. I need to know that the property is attached to that listing. Now in terms of who pays for that report, could be the vendor, could be the buyers have to pay a fee to access it, could be the agent, like maybe they need to have more skin in the game on this, but I guess the due diligence required when you're looking at a property is somehow packaged in to that listing.
Can we move? I'm going to make an assumption here that that at some point throughout this episode, we're going to be talking about auctions, right, and what you would like to improve on auctions? Can I segue into that please by talking about friendly auctions? Because I love the idea of friendly auctions and they are part of isolated in fairly particular parts of the country, and it is basically where you go along to the auction already having had access free access to the pest inspection report, the building, all of these reports, and you can access those at any point leading up to it. And the only person who pays for it is the successful bidder at the auction, And that to me is perfect because it kind of gives full transparency. All the information is there, it is accessible by everyone who is interested in that property, and you do not end up paying for it a dozen times over at all the different places that you're going to inspect.
Yeah, I think that's a great idea. I love the thought of friendly auctions. So I think we've actually moved into my point three, which is auctions. It can I build on that a little bit because I think friendly auctions I love the thought of I worry that we're probably a bit of a rebrand of that name though. I think that people might be a bit cynical about the idea of friendly auctions, and I think that people might not believe that it's even possible. Also, I guess the street auction do they or do they not work? Now? I like auctions for the transparency, but I also acknowledge there are a lot of games being played during those auctions. Were we better off taking the leaf out of what happened during COVID and having zoom online auctions when you can sit with your partner on the sofa, you can take your camera off if you want to, you can be in your comfy pajamas and slippers. You're in your own environment, and you're not intimidated by other bits, potentially not intimidated by an auctioneer. I think it's worth considering, is that the best approach for the buyers that.
Would level the playing field, wouldn't it, because otherwise it's kind of like the most confident bidder is the one who ends up winning, and anyone who is perhaps a bit of an introvert. The auction process is terrifying. It is really really daunting, and you can see how they are then at a disadvantage right from the moment they set foot on the property.
Completely. It's a pressure cooker set of environment too. And you I think they work because you've sort of got you if you're bidding, you've got your back against the wall. So I just think this idea of is there a better way to do it? And that's as I said, one idea could be to do them virtually. I just feel like people are more comfortable in control about what they want to reveal.
Where do you stand that on bidders? Because when we talked about our in our auctions episode the Strategies for Winning at an Auction, we talked about this idea of the inconsistencies between states in Australia about not having to actually register as a bidder to actually bid at an auction, and the fact that really in much of Australia then you're in the dark as to who and how many people you're competing against.
I am all for making that compulsory to be registered bidder, and I think you know, the argument for it is that you've got people putting their hand in potentially millions and millions of dollars on a property and if they're not registered, they're not basically potentially a qualified bidder. Now that risks so much for that seller that they've spent on the marketing campaign that they're then obliterating out other buyers and that in that auction. I think it's an incredibly important part of it. So not just registered, but I think finance firmed up prayer approval done, or at least proof that you can pay that price, because if not, you really risk jeopardizing things for the seller and potentially other buyers.
Okay, so auctions need a bit of work, clearly. So we've got transparency, a price, another layer on listings auctioned. What's number four on your list? Way of that magical?
Okay? Under quoting, you know, I think that agents need to be sort of hung, drawn and quartered for underquoting. I think this idea of a wrap over the knuckles, sort of put in the naughty corner for a period of time, is not enough, and it's not also appropriate to the offense being committed.
Is it jail Alice? Well maybe perhaps.
I mean I'm not going to say throw away the key, but I think the deterrent for doing it has to be really at a maximum level. Or maybe it's maybe the agent loses their license, but I just feel that the deterrent has to be huge for that one. I think there's nothing more about it. I just genuinely just think stop doing it, make it a harder penalty.
I don't think there is anyone who would disagree with you listening to that, especially anyone that's been on the receiving end of underquoting or what they suspected to be under quoting, which is just the most frustrating and really demoralizing process to be in because all of your heart work, all of your research, everything, it's wasted. Yep, completely anyway, Okay, underquoting, that's song before number five.
Stamp duty lazy, inefficient, No one's probably not many people except the state premieries are going to disagree with me on this one. Get rid of it. I just think the issue with it is it basically makes it more expensive and people hold onto their house for longer because they can't buy and sell easily because of these sort of cumbersome taxes involved. Transferred overage to a land tax again, it's happening in Canberra. It was in play in Sydney for first home buys for a period under Dominiq Parrote. It's now off the table again. It should be relooked at and we should be on a tax system that it's built for purpose for how we're living today.
Oh that is fantastic to hear because you use the word inefficient and stamp duty has been identified as the most inefficient tax because of what it does the handbreak that it puts on the market, because all of a sudden you have people who have know that that they are empty, for instance, still living in a five bedroom house, and the stamp duty that would come on buying the next property for them to downsize. It's just like, you know what, I don't want to spend fifty sixty thousand dollars on a stamp duty that really has no purpose from the property side. Yes, it's got a revenue purpose for the government, but come on, there are smarter ways and more efficient ways to do this, and you would just take that handbrake off the market, right exactly.
I've already I've already convinced you that one, haven't I that was straight through the keeper one that one I get.
I get worked up about these things. I'm sorry, and this is your list and I'm just emphatically in support of it. So far.
Number six Okay, look thoughtful and considered planning. I think we really need to incentivize clever design when it comes to our urban streetscape. So yes, we need more low middle level apartments. Really be inspired by operations such as Nightingale, that not for profit developer. We've spoken a little bit about over the season, Mike all this idea of communal beautiful architectural design, communal facilities in their communal laundries, So apartments can be a bit more generous in size, get rid of parking in inner city areas. But really, I guess incentivizing architects of the architects of tomorrow to design thoughtfully what people want, but in an efficient cost structure. What I also want is the idea that when we are adding supply to areas which we know we need, that it is incumbent on state and local governments to ensure the infrastructure is also underway. So if you say I'm going to add three thousand apartments to that new suburb, there has to be remodeling of the transport, shops, schools, parks, et cetera done, and maybe even a great local cafe on the corner, and that has to take place before the supply is delivered.
There is so much common sense in a lot of that, and there's always concerns over density, and typically it is people who are living in that area or that just know that the infrastructure within that area is not actually able to stain greater density. But really You're right, it actually needs it's a political issue this one. It is kind of taking a step back as well and making sure that the infrastructure that's set up within our cities is capable of catering towards these things. And it's a smarter, more considered approach, right.
Yeah, And look, I think you know, this idea of nimbiism not in my backyard is very as a real stain against it at the moment. But I think the counter to that is, are we ensuring that the infrastructure. Are we explaining to people who think like that, I want development, but not in my backyard, I'll explained to them how this will work, how it will look, and the infrastructure that will be built with those apartments to assure these people of what is actually happening. Again, it goes back to transparency. I think that people have just lost faith and confidence in governments.
We are compiling a cracking list here. We have one more to go, bring it home. What's number seven?
Well, look, I'm getting a bit lofty here, but I would really like to see financial literacy around housing and property and you know, economics in general for children. And I think that we think about the idea of hex for example, that students sort of know that if they go to university that they'll they can pay the extra in their tax and YadA YadA, yadh have the HEX option. What are we doing around housing? How are we educating children and getting to think about the cost of housing? And it's not about saving for you deposit when you're eight years old and start putting, you know, fifty cents away each week, but just understanding that you need a twenty percent to posit to buy a house, understanding how long that can take to save, and therefore sort of making very conscious compromises or not when it comes to housing. So I think when you're at secondary school in particular, and you've got your first part time job, and that thinking about that budget, that idea of you know, spend save a bit of sort of barefoot investor style maths applied at school, so everybody has access to it when it comes to property, because ultimately that helps our society and economy if everybody is able to obtain housing.
Yeah, because the last thing you want is really the only people who are able to afford property as they're kind of growing up is those who are essentially inheriting it. Or inheriting the.
Money to do so.
And the key to that, one of the keys is greater understanding earlier in life.
Completely what a list, You.
Know what I actually wish you did have a magic wand just to implement these things. I love these, especially the auctions overhaul and so number one was the transparency, just broadly improved transparency everywhere, prices in particular at number two, and overhaul of listings get the information that people really want into them. At number three auctions. Plenty of work to be done in auctions, the friendly auctions as I was talking about, but then also registered bid is making sure that people actually know who they're competing against. A lot to be done there under quoting number four. Number five was stamp duty. Number six is that a thoughtful, considered approach to plan. And then number seven really aiming high but really an important one to finish on better financial literacy for young Australians. Well said Alice. That's a great list.
Well thanks, Michael. When you should touch base again and see where how it's going, shouldn't we because I've I mean, look, I think what we're saying is not rocket science, is it? But I think unless we sort of really approach this in a broad way. We're not going to ever move forward and out of this hole that many people are finding themselves in.
Yeah, could not agree more. Thanks very much, Alis, Thanks Michael. That was real estate expert Alice Staltz, National Property editor at Domain, and I'm Michael Thompson. Make sure you're following the podcast and you can enjoy the full twelve episode season of the Property Pendulum, brought to you by Domain and Fear and Greed, the podcast that tells you which way the property market is going to swing, how to make the most dishon
