REIA NEWSISSUE FOUR: AUGUST 2011

MANDATORY DISCLOSURE:

ENERGY EFFICIENCYIS NOT WHAT

MOTIVATES HOME BUYERS

ALSO IN THIS ISSUE:

SUPERANNUATION CLEARING HOUSEMAKE LIGHT WORK OF SUPER

FIRST HOME BUYERSWHERE HAVE THEY GONE?

HOUSE PRICE FUNDAMENTALSA SNAPSHOT OF THE MARKET

NATIONAL ASSOCIATION OF REALTORSCONFERENCE & STUDY TOUR

AUSTRALASIAN AUCTIONEERING CHAMPIONSHIPS REGISTRATION INSIDE

WANT TO FIND OUT MORE ABOUT PROMOTING YOUR BRAND IN REIA NEWS?

CONTACT REIA MANAGER COMMUNICATIONSRHIANNON MCCLELLAND ON 02 6282 4277 OR AT RHIANNON.MCCLELLAND@REIA.COM.AU FOR FURTHER INFORMATION.

My first month as acting president has been an extremely enjoyable but busy time with a number of housing issues becoming ‘hot topics’ in the media.

Last month we brought you an article on national licensing. The article profiled an overview of the proposed impact on the

profession while also looking at REIA’s concerns. I am pleased to report that our piece had the desired effect, and was picked up in publications and online forums such as The Australian Financial Review and Real Estate Business Online.

Also surfacing this month is the issue of house prices and the argument about whether a bubble exists or not. If you want to see what REIA has to say, visit our website or read this month’s Smart Property Investor magazine.

If you would like more information on house price fundamentals, our research officer Johann Rojas has produced a great read this month.

This month’s headline article is a story on mandatory disclosure and what the cost of producing an EER report will mean for consumers and agents alike.

Also in this edition is information about the National Association of Realtors Conference in California in November. A study tour titled California Dreaming has been organised and we would love to see more Australian agents join the contingency - just remember, you only have 5 days from the issue of this newsletter to register.

On a final note, we are extremely pleased that interest rates remain on hold this month. The respite the RBA has provided to home buyers as well as existing owners is welcome news but we need to see it continue for the foreseeable future.

Ms Pamela Bennett REIA Acting President

PRESIDENT’S REPORT

WELCOMEFROM REIA’S ACTING PRESIDENT

Most Australians will probably tell you that the environment is important to them or at least on their radar. But what if being environmentally responsible or reporting on the Energy Efficiency Rating (EER) of your home added a mandatory financial cost - now that’s a different story.

In July 2009 COAG agreed to introduce a national home environmental rating scheme.

The scheme would require homeowners that sell or rent houses and apartments to provide information to prospective buyers and renters about the energy, greenhouse

and water performance of the home.

Following this decision the Department of Climate Change and Energy Efficiency released a Consultation Regulatory Impact Statement (RIS) late last month for comment which is available at www.mce.gov.au/quicklinks/bulletins.html.

The RIS models six options, covering the full range from technically-detailed assessment through to a checklist approach and a voluntary scheme. It also considers the options of disclosure at point of sale only versus point of sale and lease.

Options 1 to 4 and option 6 are regulatory options. The options are: Option 1- full thermal assessment; Option 2 - simplified thermal assessment: Option 3 - online self-assessment; Option 4 - checklist assessment; Option 5 - voluntary uptake, and; Option

“The cost to the home owner, at the time of sale or lease, of each of these options will vary...”

6 - mandatory rating with an opt-out feature. There will not be a single national scheme.

Instead each state and territory (other than Queensland and the ACT which already have schemes in place) will need to consider which option to pursue.

The cost to the home owner, at the time of sale or lease, of each of these options will vary from an estimated $824 under Option 1 to an estimated $55 under option 4.

ON THE COVER

MANDATORY DISCLOSUREENERGY EFFICIENCY IS NOT WHAT MOTIVATES HOME BUYERS

The REIA whilst recognising the environmental benefits as well the operational cost savings of energy efficient homes does not believe that governments should mandate such assessments. Further the REIA feels that agents should not carry the burden of either educating vendors or policing compliance by home owners who are about to sell or lease their property.

The experience of the real estate profession in marketing and leasing across Australia is that buyers and renters are aware of the factors that determine energy efficiency ratings (type of construction, insulation, orientation to the north, depth of eaves, glazing, type of heating and lighting, flooring, window coverings, the type and location of trees etc) and already assess and compare properties on these features without quantification.

Furthermore the experience of agents indicates that other attributes of the dwelling, such as location, access to infrastructure (including schools, transport, shopping, and entertainment), proximity to work, garden and standard of kitchen and bathroom(s), are considered to be far more important.

“The experience in the ACT, where mandatory reporting of energy efficiency ratings has been in place for a number of years, is a good case study...”

The experience in the ACT, where mandatory reporting of energy efficiency ratings has been in place for a number of years, is a good case study of how consumers respond to the availability of a report on the energy rating of particular properties of interest. ACT agents have reported that purchasers and renters of established dwellings have placed the greatest emphasis on the other attributes. Little, if any, consideration is given to the written energy rating in making a decision to buy or rent a particular property.

The REIA will, in its response to the RIS, be urging governments to adopt a low cost approach to the reporting of energy efficiency at the time of sale and lease. REIA will continue to keep you up to date with this matter and our lobbying efforts on behalf of the profession.

Here are some tips for property managers to help landlords process insurance claims:

Lodge entry condition reports

Some insurance companies can reject claims for malicious or accidental damage to a rental property if you have not lodged an entry condition report. Include an inventory of household items the landlord has left for the tenant to use.

Don’t wait to make a claim

Payment of claims for damage to or theft from a rental property may be jeopardised if there is no evidence of this occurring. Lodge claims as soon as possible, prior to goods being replaced or damages repaired.

“Claims for malicious or accidental damage should be accompanied by comprehensive labelled photographic evidence...”

Provide evidence

Claims for malicious or accidental damage should be accompanied by comprehensive labelled photographic evidence, covering each room in which damage has occurred and the required repair work.

Lodge police reports

Theft and malicious damage are criminal acts. Many landlord

insurance policies stipulate that theft and malicious damage claims must be accompanied by a copy of the police report or the name of the police station where the report was made.

Serve the right notices

Loss of rent claims can be invalidated or reduced if the policyholder has nottaken appropriate steps after a tenant has fallen into arrears. Make sure you issue the tenant with the correct notices within the specified timeframes.

“Loss of rent claims can be invalidated if the policyholder has not taken appropriate steps.”

INDUSTRY ARTICLE

HELP LANDLORDSTO MAXIMISE INSURANCE CLAIMS

Provide proof of advertising

Some landlord policies provide cover for landlords for a certain level of reletting expenses in loss of rent claims. If so, the policyholder must be able to show that you are making every reasonable effort to find new tenants for the property.

“Some landlord policies provide cover for landlords for a certain level of reletting expenses...”

Hold on to the bond

If a tenant causes loss or damage to a property, subject to legal requirements or advice to the contrary from the insurer, the bond should not be given

back to the tenant until any corresponding insurance claim by the landlord is resolved.

For further information, visit www.terrischeer.com.au or call 1800 804 016.___________________________

About Terri Scheer Insurance

Terri Scheer Insurance Pty Ltd (Terri Scheer). Terri Scheer provides insurance cover for landlords, helping to protect them against the risks associated with owning a rental property.

These include malicious damage by tenants, accidental damage, landlord’s legal liability and loss of rental income.

Terri Scheer acts on behalf of Vero Insurance Ltd, the insurer which issues the insurance cover. TerriScheer has not taken into account the reader’s or their client’s

objectives, financial situation or needs.

If you or your client is interested in any of Terri Scheer’s insurance products, the relevant ProductDisclosure Statement should be considered first. It can be viewed online at www.terrischeer.com.au or obtained by calling 1800 804 016. Based in Adelaide, Terri Scheer services all states and capital cities.

The housing market may be slow at the moment, but the rental market continues to tighten, with low vacancy rates driving increased rental yields across the country. Vacancy rates have remained below equilibrium levels of 3% across most of Australia’s cities over the past financial year and are averaging only 1.6% nationally .

Unsurprisingly this has caused an increase in rental rates, with gross Australian apartment yields rising to 5.0%.

High rental yields may sound promising, however combined with the recent jump in the

consumer price index and fears about rising interest rates, consumers are being placed under growing financial pressure. Experts are warning that an increasing number of tenants could default on their bills if average rental costs continue to rise.

Rental default occurs when a tenant leaves without notice, fails to pay the rent owed or refuses to leave after being served an eviction notice. Currently it can take upwards of six weeks from the time a tenant defaults until the matter is heard in court.

“Unfortunately tenancy payment issues are not uncommon in Australia...”

Given that loan repayments are averaging $150 per month more than they were two years ago , very few landlords are able to afford an extended period of vacancy in their investment property.

Unfortunately tenancy payment issues are not uncommon in Australia, with recent research finding that 2 out of 5 landlords have experienced either rent defaults or property damage beyond what is covered in their deposits . Despite this, of the more than 2 million Australian investment properties recorded in the last census, less than 10% carry some form of landlord insurance.

While cost has always been a major barrier, according to Melinda O’Connor, National Practice Executive at Aon, “Many landlords are simply unaware of the range of insurance products available to them and which of

INDUSTRY ARTICLE

LANDLORDS’ MARKET WRAP:PROTECTING YOUR INVESTMENT FROM RENTAL DEFAULT

“Often landlords make the mistake of thinking their Building Insurance policy will provide all the protection they need...”

these are best suited to their personal situation.”

“Often landlords make the mistake of thinking their Building Insurance policy will provide all the protection they need, but most of these policies exclude loss caused by tenants.” Melinda recommends that owners of rental properties invest in a specifically tailored Landlord insurance policy, to ensure they are fully protected, stating “In many cases, Landlord insurance will cost less than one week’s

rent per year and the cost is tax deductible.”

While 96% of claims are for loss of rent, Melinda recommends seeking a policy that includes cover for a range of factors such as theft by tenants, public liability and contents insurance.

While you should always take your personal circumstances into account – as a starting point, a Landlord insurance policy should cover the following:

• Malicious and/or intentional damage to property by either the tenant or their guests

• Loss of income if the tenant does not pay their rent

• Theft by either the tenant or their guests

• Liability, which includes a claim filed against the landlord

• Legal expenses for claims brought against the tenant

Aon is able to provide property owners with professional guidance and assistance on a range of landlord insurance options. Visit our website at www.aon.com.au/realestate for more information or call your local Aon representative on 1300 734 274.

Visit our website at www.aon.com.au/realestate for more information or call your local Aon representative on 1300 734 274.

___________________________1SQM Research “Residential Vacancy Rates” June 22011 RP Data “Rismark Home Value Index release” 32011 REIA “Media Release” 05 July 20114Home Insurance Comparison “Why you should have landlords insurance” Jun 20115Australian Bureau of Statistics “2006 Census” 20066Abel Realty “Protection against tenants from hell and other disasters” 2001

NAB AUSTRALASIANREAL ESTATE INSTITUTES’AUCTIONEERINGCHAMPIONSHIP19–21 SEPTEMBER 2011 SOFITEL MELBOURNE ON COLLINS 25 COLLINS STREET MELBOURNE

The NAB Australasian Real Estate Institutes’ 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.

Who will win this year?To celebrate the profession and art of auctioneering, the REIV is offering a number of options to both Victorian and interstate auctioneers as part of the NAB Australasian Real Estate Institutes’ Auctioneering Championship in 2011.

Friday 16 September5.30pm– 6.30pm Welcome drinks for Auction Study Tour delegates

Saturday 17 September9.00am–3.00pm Auction Study Tour of Melbourne auctions6.30pm–9.30pm Auction Study Tour dinner

Monday 19 September10.00am–2.00pm Auction Master Class5.30pm–6.30pm Contestant briefing6.30pm–7.30pm Cocktail party, including competition draw

Tuesday 20 September 10.00am–4.15pm Auction Heats

Wednesday 21 September 9.00am–11.00am Property viewing – finalists1.30pm–3.00pm Auction Finals 7pm–midnight Gala Presentation Dinner

The Program of Events

Auction Master Class

What could you learn from the three most recent winners of the Australasian Real Estate Institutes’ Auctioneering Championship?

This is a rare opportunity to be up close and personal with three of the modern legends of auctioneering:

Mark Sumich Winner 2007 & 2008

Phil McGoldrick Winner 2009

Jason Andrew Winner 2010

Also presenting is professional voice coach, Jenny Kent. Jenny has over 10 years’ experience in helping actors, presenters, journalists and auctioneers find their voice and use it in the most effective and productive way.

The Auction Master Class can be taken as a stand-alone option or included with the Delegate Package.

Stand-alone cost: $450 REI Members $550 non-Members

The Packages Pick the package that suits you best

For more information visit www.reiv.com.au or follow us on Facebook

Delegate Package

This package includes:

• Welcome cocktail party and competition draw

• Full catering for the Auction Heats, including morning and afternoon tea & buffet lunch

• Catering for the Auction Finals, including lunch & afternoon tea

• Reservation at the Gala Presentation Dinner

Cost: $365 REI Members & non-Members

Auction Study Tour Package

This package includes:

• Delegate Package

• Auction Master Class

• Saturday tour of Melbourne auctions

• Tour dinner – evening 17 September

Cost: $995 REI Members $1095 non-Members

Gala Presentation Dinner Package

Single ticket $120 REI Members $150 non-Members

Table of 10 $1100 REI Members $1400 non-Members

Presentation Dinner includes three-course meal with premium beverages

Accommodation

Sofitel Melbourne on Collins

Delegate room rate: $295 (without breakfast) per night $325 (with 1 breakfast) per night $355 (with 2 breakfasts) per night

You may remember REIA reporting on the Goverment’s Superannuation Clearing House when it was first announced but have you taken the opportunity to save yourself time and focus on areas of your business that need attention? If not, you need to read on.

The Small Business Superannuation Clearing House is a free service offered to small businesses with less than 20 employees.

The clearing house is designed to make superannuation payments simple. It’s fast, free and efficient – letting you get back to what’s important to your business.

The service is optional and is designed to reduce red tape and compliance costs associated with meeting your superannuation guarantee obligations.

With the Small Business Superannuation Clearing House, you can register online and when it is time to make your superannuation contribution payments, this can be done in one transaction, the clearing house will do the rest for you.

For further information, click here.

SUPERANNUATION CLEARING HOUSE:MAKE LIGHT WORK OF SUPER PAYMENTS

A FEW SMALL STEPS TO FREE UP YOUR TIME

1 Register online at www.medicareaustralia.gov.au/super.

2 Make your required superannuation payments in one transaction.

3 The Small Business Superannuation Clearing House will do the rest for you.

Last month Domain launched the first Ipad application following the highly successful release of three smartphone apps across Windows 7, Apple and Android.

Tony Blamey, General Manager Real Estate, Fairfax Marketplaces said, “The uptake of Domain’s smartphone apps has surpassed expectations and we’re looking forward to seeing similar results with the iPad app.”

“It offers a fast and easy connection for property seekers to connect with agents.”

The Domain iPad app offers property buyers, renters and sellers an interactive and highly visual environment to browse, in addition to a great experience in utilising various tools to plan inspections and conduct searches.

It also offers a fast and easy matching service for property seekers to connect with agents.

Key features of the Domain iPad app include allowing users to synchronise shortlisted property information from any device, whether it’s a PC, laptop, smartphone or tablet and take it with them.

The interactive map allows all properties to be viewed in an area and the “around me” GPS feature enables users to view detailed property information in an area including the sale price for recently sold properties and other property listings in the vicinity.

“Key features include allowing users to synchronise shortlisted property information from any device...”

All of these unique features can also be used by agents in their listing presentations to vendors to highlight the key features they need to consider when marketing their property. It can also be used to showcase properties that they are essentially competing against in their local area when making the decision to sell their own homes and determining a sale price.

DOMAIN LAUNCHES NEW APP FOR IPAD:HOW CAN IT ASSIST YOU?

FIND OUT MORE ABOUT YOUR INDUSTRY PORTALS

REALESTATEVIEW.COM.AU

REIQ.COM

REIWA.COM

First home buyers, as a proportion of total housing finance commitments, have been declining since an all time high of 28.5 per cent in May 2009.

That number has been attributed to the introduction of the First Home Owner Grant Boost (FHOG) Boost (an additional $7000 for established dwellings and $14,000 for new) in October 2008 – when first home buyers represented 19 per cent of finance commitments - as part of the Government’s package of fiscal measures in response to the Global Financial Crisis.

The FHOG Boost was to have ceased in June 2009 but was extended to December 2009 with a phase out period from September 2009. In the latest ABS housing finance statistics for June

“Many commentators have hypothesized that the decline is simply the flip side to the increase in first home buyers following the introduction of the Boost...”

2011 the proportion of first home buyers was 15.2 percent.

Many commentators, analysts and policy makers have hypothesized that the decline is simply the flip side to the increase in first home buyers following the introduction of the Boost and when the lagged impact of drawing first home buyers to

commit to an earlier purchase than they would otherwise have done works its way through they will enter the market. But will they and when?

The experience of 2001 to 2002 provides a valuable comparison of what one might expect. In March 2001, in response to a slowdown in the building sector, an additional $7,000 was made available to first home buyers of new homes. This additional grant was phased down to $3,000 in December 2001 and scrapped in July 2002.

The graph to the right shows the number of first home buyers (blue line) together with a trend line. We can see, expectedly, that the response to the additional grant in 2001 was an increase in first home buyers by around 30 percent to just under 13,000 a month on average and as the additional grant was phased down and eventually withdrawn

FIRST HOME BUYERS:WHERE HAVE THEY GONE?

“We can see that the response to the additional grant in 2001 was an increase in first home buyers by around 30 percent...”

first home buyer’s presence in the market declined to around 8,000 per month, a fall of nearly 40 per cent. Following the phasing out of the additional grant it took around 18 months, to November 2003 for the number of first home buyers to start to consistently grow again.

By contrast, 18 months after the phasing out of the 2008 Boost the trend line is still on the way

down. Furthermore the rate of decline – as seen in the slope of the downturn in the trend line - is far greater than in the 2001 to 2002 experience, suggesting that the response will be different this time and will take longer to get back to the long run average of just over 20 percent of all finance commitments.

A difference this time is that the phase out of the additional assistance to first home buyers has coincided with an increase in the official interest rate (red line in the graph) of 1.75 percentage points whereas the prior experience of a phase out of assistance was accompanied by interest rate increases of 0.5 percentage points - less than one-third of that facing first home buyers. This is a crucial difference and one that should not be overlooked.

This article is brought to you by REIA Manager Policy, Jock Kreitals. Jock can be contacted at jock.kreitals@reia.com.au

Source: REIA

Since last year we have seen numerous media articles reporting that house prices in Australia have increased much more than household income. What some media sources also hypothesize is that the current state of the market will cause a crash similar to that observed in the US.

Undoubtedly, house prices in Australia have increased significantly over the longer tierm. During the last decade, the weighted average median house price increased around 140 percent. But the question we need to ask ourselves is: Is this increase in property prices explained by market fundamentals or is it just a

consequence of people’s ‘housing rush fever’?

To answer this question we need to distinguish between cyclical factors and structural factors that influence the behaviour of house prices. Cyclical factors change depending on the state of the economy and these changes are transitory. Structural factors determine the state of the economy and cause permanent

changes in the economy. Still confused? Let’s look at an example.

The graph below shows the Australian weighted average median house price over the period 1996-2010. In this period, house prices showed a permanent upward trend coupled with five different phases of growth rates.

HOUSE PRICE FUNDAMENTALS:A SNAPSHOT OF THE INDUSTRY

Source: REIA

The permanent upward trend is associated with the lack of housing supply and increases in population (both issues that we will leave for future articles).

The different phases of house growth rates are impacted by changes in mortgage rates, stock returns and household income.

These are cyclical factors that change depending on the state of the economy. The table to the right shows the average quarterly growth rate of median house prices, the monthly average mortgage rates, and the median family income quarterly growth rate and average annual stock returns.

The table also shows a relationship between those cyclical factors and house prices.

In short, house prices generally increase when mortgage rates

decrease, family income increases and stock returns decrease.

So why are all these relationships between cyclical and structural factors important to understanding house price fundamentals?

Well, what they are telling us is that house prices in Australia respond to changes in the economic circumstances of Australian households and

investors and to the structure that frames the property market.

Movements in house prices in Australia are explained by market fundamentals rather than ‘housing rush fever’. The rational process of home purchase involves the consumer weighing up if they will be able to meet their financial obligations in the future rather than an ‘on the spot’ decision.

This article is brought to you by REIA Research Officer, Johann Rojas. Johan can be contacted at johann.rojas@reia.com.au

Period Median house price average quarterly growth rate %

Monthly average mortgage rates%

Median family income quarterly growth rate %

Annual average stock returns %

Dec96-Sept00 2.1 7.0 0.9 9.8

Sept00-Dec03 3.9 6.8 1.3 0.1

Dec03-Dec08 0.8 7.8 1.1 11.4

Dec08-Dec09 2.9 6.1 1.5 -13.6

Dec09-Dec10 1.5 7.2 1.4 -0.7

Source: REIA calculations, ASX, RBA, ABS

Wednesday, November 9 CIPS Course: The Business of U.S. Real Estate(Advance Enrollment Required)

Learn the fundamentals of conducting real estate transactions in the United States. You will learn the requirements, regulations, and laws; business standards and cultural norms; as well as a detailed description of a typical U.S. real estate transaction. This is a great way for practitioners from all over the world to meet new contacts, learn together, and create referral opportunities.

November 11-14EDUCATION SESSIONS – Visit www.realtor.org/conference, and click the “Search by Audience” link – select “International” to view sessions most relevant to our global audience.

EXPO – Discover new products and services from vendors all over the world. Stop by the International & Second-Home Pavilion to visit our international partners. We’ll also feature Networking Hours by Country (as in the past). Each partner country will have a table and a time slot tofacilitate networking exchange.

Thursday, November 10INTERNATIONAL NETWORKING RECEPTION – A free event with hors d’oeuvres and cocktails to welcome our international delegates to the conference.

Friday, November 11GLOBAL DAY – Features a full day of targeted sessions for international audiences. Sessions will be translated into French, Portuguese, and Spanish.

Saturday, November 12INTERNATIONAL NIGHT OUT – Join colleagues from around the world for our gala evening and CIPS Awards Ceremony; followed by a reception, dinner and live music to cap off this lively black-tie evening.

430 North Michigan Avenue • Chicago, IL 60611-4087800.874.6500 • www.REALTOR.org

your invitation to

SEIZE THE DAY

Join 18,000 professionals at the premiere real estate

event in the U.S. In four short days, you’ll learn about

best practices in the U.S. real estate industry, get sales tips

and business techniques from top industry experts, explore

the latest products and services at the expo, and make new

contacts with professionals from around the globe.

International-Themed Events:

REALTORS® Conference & Expo | ANAHEIM, CALIFORNIA, USA | November 11-14, 2011

NEW!

Wednesday, November 9 CIPS Course: The Business of U.S. Real Estate(Advance Enrollment Required)

Learn the fundamentals of conducting real estate transactions in the United States. You will learn the requirements, regulations, and laws; business standards and cultural norms; as well as a detailed description of a typical U.S. real estate transaction. This is a great way for practitioners from all over the world to meet new contacts, learn together, and create referral opportunities.

November 11-14EDUCATION SESSIONS – Visit www.realtor.org/conference, and click the “Search by Audience” link – select “International” to view sessions most relevant to our global audience.

EXPO – Discover new products and services from vendors all over the world. Stop by the International & Second-Home Pavilion to visit our international partners. We’ll also feature Networking Hours by Country (as in the past). Each partner country will have a table and a time slot tofacilitate networking exchange.

Thursday, November 10INTERNATIONAL NETWORKING RECEPTION – A free event with hors d’oeuvres and cocktails to welcome our international delegates to the conference.

Friday, November 11GLOBAL DAY – Features a full day of targeted sessions for international audiences. Sessions will be translated into French, Portuguese, and Spanish.

Saturday, November 12INTERNATIONAL NIGHT OUT – Join colleagues from around the world for our gala evening and CIPS Awards Ceremony; followed by a reception, dinner and live music to cap off this lively black-tie evening.

430 North Michigan Avenue • Chicago, IL 60611-4087800.874.6500 • www.REALTOR.org

your invitation to

SEIZE THE DAY

Join 18,000 professionals at the premiere real estate

event in the U.S. In four short days, you’ll learn about

best practices in the U.S. real estate industry, get sales tips

and business techniques from top industry experts, explore

the latest products and services at the expo, and make new

contacts with professionals from around the globe.

International-Themed Events:

REALTORS® Conference & Expo | ANAHEIM, CALIFORNIA, USA | November 11-14, 2011

NEW!

CALIFORNIA DREAMING STUDY TOUR6-8 NOVEMBER 2011

California Dreaming Tour 2011Sunday, November 6 to Tuesday, November 8, 2011

Back by popular demand: Your opportunity to network with fellow global real estate professionals in an exclusive, luxurious, relaxed environment, while visiting California’s beaches and sunshine

Before you attend the NAR REALTORS® Conference & Expo in Anaheim, joinCIPS & RSPS REALTORS®, foreign delegates, NAR Ambassador Association leadership, and NAR President’s Liaisons for the California Dreaming Tour.

• Stay at the world-class oceanfront Terranea Resort at incredibly-reduced rates*

• Receive private tours of residential properties & sights in the South Bay of

• Los Angeles Enjoy Terranea’s golf, spa, pools,hiking,finediningandpanoramicocean views

• Arrive in time for Sunday evening’s Welcome Reception, or book your casita or villa as early as Friday at the same special rate

• Transportation Tuesday afternoon to NAR hotels in Anaheim is included

• Tickets are very limited – book today!

South Bay Association of REALTORS® International Committee presentS:

HOW TO BOOKBook CADT 2011 tickets at www.SouthBayAOR.com/intlevents. Price: $85/person, plus Terranea lodging.Reserve your casita or villa at Terranea at +1-866-802-8000 or click here. Use promo code SBAOR*.

*Only offered to pre-registered CA Dreaming Tour 2011 participants. No cancellation refunds after September 26, 2011.

ONLY 5 DAYS

TO BOOK

Industry UpdateIndustry news from around Australia

NSW - Greens tentatively welcome Local Planning Panel

The Greens NSW have tentatively welcomed Planning Minister Brad Hazzard’s announcement of the establishment of a Local Planning Panel to examine the best way to approach Local Environment Plans (LEPs).

Greens NSW MP and Planning spokesperson David Shoebridge said: “The Greens welcome the establishment of a Local Planning Panel as part of a much needed review of the NSW planning laws, but will keep a close eye on any recommendations the panel makes and subsequent actions taken by the government.

To date the standard Local Environmental Plans being imposed on local governments by the planning department have

not allowed for local flexibility. The Greens hope this panel will allow for much needed flexibility at a local level.___________________________

TAS - Building a better planning system

The Minister for Planning, Bryan Green, announced new Tasmanian planning laws to streamline approvals and cut red tape for residential development.

Mr Green said the major overhaul of the State’s planning system would reduce compliance costs and speed up approvals for singledwellings. The Government is delivering some of the most important planning reforms we have ever seen and this new code is an exciting milestone, Mr Green said.

Mr Green said the Government had committed $6 million over

the next four years to ensure planning laws keep pacewith the aspirations of local communities and potential investors.__________________________

QLD- Commercial agents meet

Queensland’s commercial and industrial real estate agents met at the end of last month to discuss the outlook for the economy and the commercial sector in the months and years ahead.

The commercial real estate sector has not been immune from the patchy economic conditions over the past two years with the number of commercial developments constructed dropping dramatically during the Global Financial Crisis due to the lack of available finance.

Making NewsGeneral national news

Cash rate remains unchanged

At its meeting on 2 August, the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.75 per cent. On balance, the Board judged that it was prudent to maintain the current setting of monetary policy, particularly in view of the acute sense of uncertainty in global financial markets over recent weeks. In future meetings, the Board will continue to assess carefully the evolving outlook for growth and inflation.___________________________

Business conditions continue to decline

The August 2011 ACCI Business Expectations Survey finds that all actual and expectation indicators for businesses deteriorated over

the June quarter, except the indexes of Export Sales and Wage Growth.

Overall business sentiment continued to wane in the June quarter amid the prospect of rising interest rates and taxes, increasing uncertainties in the US and Europe, and falling consumer confidence.

The index of Expected Economic Performance fell into contractionary territory for the first time since the June 2009 quarter, indicating businesses have become increasingly pessimistic about the outlook for the Australian economy over the next twelve months. ___________________________

APRA monthly banking statistics

The Australian Prudential Regulation Authority (APRA)

has released the statistics publication, Monthly Banking Statistics for June 2011.

To download an electronic copy, click here.__________________________

CHOICE organises Big Bank Switch

In an Australian first, the people’s watchdog CHOICE, is launching the CHOICE Big Bank Switch which aims to find 1000 Australians willing to switch mortgages to find a better deal.

In partnership with the organisation which has pioneered the process, One Big Switch, consumers can register on-line at no cost and obligation-free to become part of a group switch designed to source special mortgage offers.

Political WatchInformation and news from government

Small business minister addresses COSBOA conference

The Minister for Small Business, Senator Nick Sherry, discussed retail costs, the GST threshold, National Broadband Network, banks and small business lending, deregulation and cutting red tape, the Clean Energy Future initiative, and small business and the carbon price at the Council of Small Business of Australia (COSBOA) Conference recently.___________________________

ATO warns honesty is the best policy

Tax Commissioner Michael D’Ascenzo has warned the community that if they are trying to defraud or overstate their refund claims this tax time then they are likely to be caught. The warning follows a sharp increase

in the number of potentially suspicious tax returns that have already been detected by the ATO.

“We are only a month into tax time and we have already noticed an increase of these type of claims compared to this time last year”, Mr D’Ascenzo said.

“So far we have stopped nearly 40,000 returns that we believe include potentially overstated or fraudulent refund claims, which have included claims for spouse offset, education tax refunds and refund of franking credits.“

“This is up from this time last year, largely as a result of the increasing sophistication of our systems to detect these claims.”___________________________

ABS House Price Index

Preliminary estimates show the price index for established

houses for the weighted average of the eight capital cities decreased 0.1% in the June quarter 2011.

The capital city indexes decreased in Perth (-1.0%), Adelaide (-0.8%), Brisbane (-0.3%), Melbourne (-0.1%), Darwin (-1.6%), and Hobart (-0.1%) and increased in Sydney (+0.4%) and Canberra (+1.1%).

Preliminary estimates show that the price index for established houses for the weighted average of the eight capital cities decreased 1.9% in the year to June quarter 2011. Annually, house prices decreased in Perth (-4.1%), Brisbane (-3.6%), Darwin (-3.0%), Adelaide (-2.1%), Melbourne (-2.0%), and Sydney (-0.7%), and increased in Hobart (+2.8%) and Canberra (+2.2%).

Political WatchInformation and news from government

For further information, click here._________________________

ABS Building Approvals

ABS Building Approvals show that the total number of dwellings approved fell 3.5% in June 2011, in seasonally adjusted terms, after falling 6.3% in May.

Dwelling approvals decreased for the month of June in Queensland (-18.6%), South Australia (-12.2%), Tasmania (-8.1%) and Western Australia (-3.0%) while Victoria (6.9%) and New South Wales (3.2%) recorded increases in seasonally adjusted terms. In seasonally adjusted terms, approvals for private sector houses fell 3.2% in June with falls in Victoria (-8.1%), New South Wales (-4.8%), Queensland (-4.5%) and South

Australia (-3.4%) while there was a rise in Western Australia (11.3%).

For further information, click here._________________________

ABS Housing Finance

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 1.4%.

In trend terms, the number of commitments for owner occupied housing finance rose 1.0%.

In trend terms, the number of commitments for the purchase of new dwellings rose 1.9%, the number of commitments for the purchase of established dwellings rose 0.9% and the number of commitments for

the construction of dwellings rose 0.9%.

In seasonally adjusted terms, the number of commitments for owner occupied housing finance was flat (0.0%). In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell from 15.4% in May 2011 to 15.2% in June 2011.

The WorldProperty news from around the world

US: Housing market braces for hit from credit rating reduction

For local lenders and housing markets in the US, the outlook is not promising as mortgage rate rises loom.

Mortgage rates have been at historic lows for more than a year. The interest rate on a 30-year fixed rate mortgage is currently about 4.5 percent but is expected to increase by about half a per cent.

If mortgage rates do increase, it could mean even fewer people in the market to buy. Home prices, already low, could drop even further.

Even if rates stay unchanged, the past week’s economic news might be grim enough to make buyers and sellers skittish.___________________________

Canada: Canada still vulnerable

While Canada may be in better economic shape than its southern neighbour, experts say it is vulnerable to the global debt uncertainty.

Sherry Cooper, chief economist at BMO Capital Markets, warned that the Canadian stock market beating is “probably not over.”

“In this environment, commodity prices likely remain soft and the Canadian dollar is vulnerable and extremely volatile, she wrote in a note.

Ms Cooper also noted that the Canadian housing market, particularly in Vancouver and Toronto, could be vulnerable as the “negative wealth effect” affects confidence and spending.

And with the Canadian current account deficit remaining high,

she expects the Bank of Canada to hold the line on interest rates for “some time.”

Federal finance minister Jim Flaherty issued a similar warning that Canada is vulnerable to debt problems in the United States and Europe.

But he also said that he believes G7 nations are taking “appropriate actions” to maintain financial stability.

On Monday, the G7 issued a statement pledging to take “all necessary measures to support financial stability and growth.” But it has done little to calm investors’ nerves thus far.

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