Summary of points by Industry Training Consultants 17/12/2013
- There is a real opportunity for both ASIC and the states to work together in drafting a bill for a Commonwealth Real Estate Advocates Act or Property Professions Act, that gives ASIC additional powers to prosecute in other areas such as a “Mortgage Broker” who performs buyer agent activities unlicensed.
- The benefits of national licensing are not achievable until conduct harmonisation is addressed by a Commonwealth government agency who oversees market conduct and consumer protection issues. However, given ASIC’s track record on licensing activities, it would be easier to include additional provisions for licensing in the National Law. This itself is an opportunity to tidy up some of the loose ends surrounding those professions, such as developers, investment advisors, conveyancers and valuers – who all play a role in property transactions. With that said mutual recognition would be the answer rather than creating a centralized bureaucracy through the National Occupational Licensing Authority (NOLA), and another layer of regulatory responsibility.
- “Property Investment Advice” needs regulating (appropriate licence required).
- Unlicensed real estate agents recommending investors use a self-managed superannuation fund (SMSF) to invest in property requires strict law enforcement and policing.
- The state based agencies are not market regulators. Their role should be limited to overseeing just tenancy, strata and conveyancing laws. State base agencies like NSW Fair Trading administer over 50 pieces of legislation and yet 75% of the overall complaints that go to Fair Trading are property related. This requires effective delegation and reshuffling of responsibilities.
- Speculative borrowing in residential real estate has been cited as a contributing factor to price bubbles in Australia’s housing economy.
- Consumer lending makes up the bulk of Australian bank lending, and of this, residential mortgages make up by far the largest share.
- ASIC plays a role in market supervision and competition, and corporate governance.
- Housing market played a big role in most economies and was central to the global financial crisis, and appears too important to be regulated on its current typically severely fragmented basis.
- ASIC is a Commonwealth government agency overseeing market conduct and consumer protection issues on credit which relate to residential property.
- ASIC has a new market surveillance system in operation, known as MAI (Market Analysis Intelligence), the system enables ASIC to better detect, investigate and prosecute trading breaches. The new system enables ASIC to interrogate very large data sets and monitor market activity, consistent with the increased use of technology in day-to-day trading. This could extend further to house price information, reserves and land disclosure reporting.
- The need for “hedging instruments” to minimise price distortion and bring corruption under control.
“State licensing and state base agent laws acts as a real impediment to labour mobility” It’s now time for a new Regulatory Regime”