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The journal of the real estate institute of victoria

reiv.com.au

Victorians victorious Agencies dominate excellence awards MEMBER news Young guns set sights on future

The Estate Agent

JUNE 2015 Volume 79 No.2

Million-plus milestone

Melbourne’s inner suburbs enter new price territory

Investment rules change

New charges for foreign investors

Golden touch

Spotlight on sales Latest videos and professional stylists deliver top results

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Contents

14 ‘Panning round the room with music is a waste of time ... if you are not in the video you are missing an opportunity to market you and your brand. People want to watch interactive TV’  Jeremy Rosens, Gary Peer & Associates St Kilda office director

Cover story Video the star attraction Latest video techniques bring properties alive, instantly creating a rapport with buyers

Features

12 19 26 28 35

Closing investor loopholes Federal Government changes taking place aim to improve compliance with foreign investment rules

Jacinta’s golden touch With people skills and dedication, the historic mining town of Bendigo can offer a winning lifestyle

A brilliant knock by a stalwart of the industry Malcolm Gray on his career in real estate and as a cricket administrator

Big V for victors Melbourne’s Nelson Alexander leads the way as Victorian agencies dominate the national excellence awards

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Styling has substance Gone are the days of simply tidying the house and cleaning the windows. Today, stylists are key to making a sale

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19 The Estate Agent ❘ June 2015

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Contents

5 President’s Report 7

CEO Report

9 Bulletin 22 Market Update 24 Member News 31 REIA Awards 33 Events Calendar 34 Best Practice 38 Obituary

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39 REIV Directory

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22

31 24

EA

Publisher REIV 335 Camberwell Rd, Camberwell, Victoria 3124 Editor Paul Bird pbird@reiv.com.au

Advertising Rick Fiedler rfiedler@reiv.com.au 9205 6654

The Estate Agent

Estate Agent is published by the Real Estate Institute of Victoria.

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The Estate Agent â?˜ June 2015

The views and opinions expressed in articles and columns of Estate Agent are those of the writers and do not necessarily represent those of the Real Estate Institute of Victoria


President’s Report Ian McDonald President REIV

Foreign investor rules, surcharge and negative gearing the hot topics

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pril and May were busy months for both the REIV and its national counterpart, the Real Estate Institute of Australia (REIA), in the lead-up to the State and Federal Budgets which were handed down in early and mid-May respectively. We play a vital role in ensuring the views of our members are heard at the highest levels of government. Two key areas attracting our attention and media headlines have been plans to strengthen compliance and enforcement of regulations on foreign investment in Australian residential real estate and the issue of negative gearing. Although a review by the House of Representatives Standing Committee on Economics found foreign investors were not competing with first-home buyers, the Federal Government has announced plans to introduce application fees for foreign buyers and strengthen fines for breaches of the regulations. A new ANZ/Property Council survey shows one in four homes in Victoria and New South Wales are sold to overseas buyers with the bank’s economists believing these buyers are propping up the economy. They say this is because these investors are creating economic growth and employment, providing new housing supply and holding down prices rather than the commonly held view that they push prices up. With this in mind, the REIA, which represents us nationally, is monitoring the planned new application fees to ensure they do not discourage investment. The May 5 State Budget also included a new surcharge on foreign buyers, equivalent to three per cent of the purchase price. State Treasurer Tim

Fair share: Foreign buyers will pay a new state surcharge on house purchases as a contribution to the cost of infrastructure and amenities such as public transport, schools and hospitals.

Pallas said this was aimed at having them contribute “their fair share” to infrastructure and amenities, with permanent residents exempt from the charges.

‘Many of those investing in our housing market are local or interstate “mum and dad” investors’ The REIV thinks it unlikely this will dampen foreign investor demand and believes it is important homeowners contribute to infrastructure such as transport. Many of those investing in our housing market are local or interstate “mum and dad” investors with demand driven by self-managed superannuation

funds. Many of these investors take advantage of the negative gearing provisions enabling a tax deduction for mortgage and maintenance-related investment property costs to be offset against other income. Importantly, negative gearing was left unchanged in the recent Federal Budget, providing ongoing support to these investors. This follows REIA lobbying and is welcome news, given pre-Budget speculation the government might limit negative gearing to new homes. Also, despite the government’s recent tax paper identifying capital gains concessions as an issue in relation to housing prices, Federal Treasurer Joe Hockey has declared himself not willing to tamper with the current capital gains tax regime. Continued on page 6

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President’s Report

Business as usual: Negative gearing was left unchanged in the 2015-2016 Federal Budget.

Continued from page 5

The State Budget included investment in infrastructure which will boost Melbourne’s middle and outer suburbs – news which came on the same day as a further reduction in interest rates. The funding for schools, public transport and the removal of rail

crossings will enhance the liveability of those suburbs, which will in turn boost property prices. Meanwhile, REIV has been promoting good relations with our Asian neighbours, with a visit to Melbourne by 14 members of the Malaysian Institute of Estate Agents.

They say Melbourne is of interest to Malaysian investors and REIV CEO Enzo Raimondo, REIA president Neville Sanders, FIABCI (the International Real Estate Federation) world president Robyn Waters and I met with them, giving them an overview of our market. FIABCI’s 66th World Real Estate Congress, on the theme Urbanisation: Perils or Opportunity, was held in the Malaysian capital, Kuala Lumpur, in late May. It’s very pleasing a number of our Australian FIABCI members made the trip to Kuala Lumpur to hear keynote speakers from across the region and participate in the discussions on this important topic.

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The Estate Agent ❘ June 2015

BDH SOLUTIONS ROSS HEDDITCH

REIV 2


CEO Report Enzo Raimondo CEO REIV

Year off to bright start with strong auction numbers, clearance rates

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t was good news for agents across the state that the market began 2015 strongly, with high auction numbers and excellent clearance rates. Despite concerns economic uncertainty – layoffs in the manufacturing sector and fears of unemployment – might dampen the buoyant market of late 2014, it carried over into the new year. By late May close to 13,500 auctions had been held across the state and auction numbers remained strong at about 1000 a weekend after the Easter and Anzac weekend lulls. The clearance rate of 77 per cent for the year to late May was up from 71 per cent on the previous year, so auctions have been converting to sales, with numbers particularly high in Melbourne’s east. Wantirna and Ringwood, the suburbs with the highest clearance rates, topped 98 and 97 per cent respectively. Of course the market was buoyed by the low interest rate environment, with the May rate cut to 2.0 per cent, a record low. Rates have now been at an historic low since they were cut to 2.5 per cent in August 2013. It’s a far cry from the all-time high of 17.5 per cent in January 1990. While several banks passed on this latest interest rate cut, resulting in what they said were some of the lowest standard variable rates in 40 years, buyers have had confidence that low rates are not a flash in the pan and that they are unlikely to buy, then find their mortgage suddenly increasing. While macro-economic factors, including the impact of the May Federal and State Budgets, are difficult to predict, the signs are hopeful for the final months of the autumn selling season and into the winter.

Under the hammer: Our annual conference at Crown Conference Centre on September 2 and 3 coincides with REIV hosting the Australasian Real Estate Institute Auctioneering Championships in Melbourne.

Encouraging, too, is our relationship with the new Victorian Government, which is making good on its undertakings to consult the REIV on matters relevant to the industry. In particular, they have reviewed and reversed the deregulation of large commercial sales and leasing transactions. This change was forced

‘REIV launched a concerted campaign against the two-tier system which resulted from this deregulation’ on the industry by the Napthine government in the lead-up to last November’s election. REIV launched a concerted campaign against the two-tier system which resulted from this deregulation and the Andrews government has announced it will repeal the planned changes.

We are also working closely with the government and Consumer Affairs Victoria on changes to Section 55 of the Estate Agents Act. This prohibits the payment of a commission when selling to a related party and we are seeking greater flexibility to enable, within strict guidelines, commissions to be paid. We look forward to working with the government on these and other issues affecting our members and industry. The institute itself has also had a buoyant start to the year. We are implementing a new training and events structure with the aim of offering members comprehensive and up-to-date professional development. Professional development continues to be an important opportunity provided to members, offering buyers and vendors the reassurance that their agent is informed on the latest practices and legislation. It is also a responsibility of Continued on page 8

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CEO Report

REIV to advance the professionalism of all members. Our annual conference on September 2 and 3 this year at Crown Conference Centre will offer some exciting opportunities. Our soon-tobe-announced array of speakers will include local and international industry experts and those with much to inspire and offer us in the fields of leadership and technology. This year our conference coincides with REIV hosting the Australasian Real Estate Institute Auctioneering Championships in Melbourne, with all members having the opportunity to see the best from both sides of the Tasman in action. This is a chance for our auctioneer members to pick up a few tips, but it is also great fun. The prestigious senior auctioneers’ competition title has been held by New

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The Estate Agent ❘ June 2015

‘Our soon-to-be-announced array of speakers will include local and international industry experts’ Zealand for the past two years. Last year was the competition’s 50th anniversary and we’re hoping that, as it begins its

next 50 years, one of Victoria’s finest will bring home the trophy this year, with the event in our home town.


Bulletin

Buyer’s agent members share spotlight on The Block REIV buyer’s agent members had a starring role in the final of The Block Triple Threat, scooping up three out of the four renovated Darling St, South Yarra apartments for their clients and bidding against each other on all four. The Block regular Frank “The Frankinator” Valentic, of Advantage Property Consulting, paid $2 million for Jess and Ayden’s apartment. He says this purchase was the bargain of the night. Valentic, renowned for playing up to the cameras, first came to the attention of TV viewers in 2011 when he bid in the auctions for The Block Richmond properties. In what some media billed as a “battle of the buyer’s agents”, it was fellow judge Nicole Jacobs who beat Valentic to eventual winners Darren and Deanne’s open-plan apartment, paying $2.29 million. Jacobs, of Jacobs Buyer Advocates, a licensed real estate agent who has herself

Frank Valentic believes the shortage of luxury, ‘lock and leave’ townhouses in the ‘hot’ South Yarra market ... contributed to the success of the auctions

Eyes on the prize: Frank Valentic secured one of the highly sought-after South Yarra apartments in the final of The Block Triple Threat.

renovated a series of homes, bought on behalf of a downsizing Brighton couple with teenage children. They plan to sell the

Opportunity knocks for those in need

The REIV continues to support Doorway, an innovative rental program operated by the Mental Illness Fellowship Victoria (MI Fellowship) with funding from the Victorian Government. The evidence-based program, now in its second release, offers property owners a secure and commercially attractive tenancy option at market rental rates along with the unique opportunity to make a difference to the lives of people in the community. The program aims to provide 100

Victorians with access to private rental accommodation with suitable applicants identified by MI Fellowship and supported on an ongoing basis to ensure long-lasting tenancies. The program has many checks and balances so property managers are not at any greater risk in taking on a Doorway participant. For further information, please visit www.mifellowship.org/content/doorwayhousing-and-support

entire contents of their home and keep the furnishings and styling which made Darren and Deanne winners. She also bought Tim and Anastasia’s unit, battling it out with Valentic to take the property for $2,175,000. Valentic believes the shortage of luxury, “lock and leave” townhouses in the “hot” South Yarra market, as well as the suburb’s great location, contributed to the success of the auctions. South Yarra now has a median house price of $1,566,500 with the March median price up by 15.6 per cent on the December quarter.

Members have their say on rooming houses Input from members has been included in a recent submission to government on the proposed licensing of rooming house operators. The REIV supported the establishment of a “fit and proper persons” test for rooming house operators and has asked for further disqualifying criteria to be added. Given the vulnerable people living in rooming houses, the REIV felt all operators should be at least 18, be required to submit to a police check (either standard police certificate or more rigorous fingerprint check) and also undertake and pass a “working with children check”. Under the proposed legislation, unlicensed people would be guilty of a criminal offence and subject to significant penalties. The Estate Agent ❘ June 2015

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Bulletin

Smoke alarm checklist vital for landlords

Malaysian investors have keen interest in new Melbourne developments Fourteen members of the Malaysian Institute of Estate Agents, including the organisation’s president Siva Shanker and deputy president Erick Kho, visited the REIV in April. The two-day Melbourne trip involved meetings with Manningham City Council, Invest Victoria, Consumer Affairs Victoria and Fletchers Real Estate. The REIV presented an overview of the Melbourne market with REIV president Ian McDonald, REIV CEO Enzo Raimondo, REIA president Neville Sanders and FIABCI world president Robyn Waters on hand to meet the delegation.

MIEA president Siva Shanker says Melbourne is of interest to Malaysian investors, especially new developments such as Doncaster Place. MIEA is the national body for real estate agents in Malaysia and has 1565 member firms, 2461 member real estate agents and 13,695 real estate negotiators. As a significant provider of training courses, the MIEA has lobbied its government to stamp out illegal agents.

The REIV – in partnership with the CFA and MFB – has developed a smoke-alarm checklist for landlords. The step-by-step checklist is intended for property managers to provide to property owners who decide not to engage a smoke alarm servicing company. The aim is to make these owners aware of the responsibilities they have, and ensure smoke alarms are in working order. Enzo Raimondo says the smoke alarm checklist is an important initiative and will contribute to greater monitoring of rental properties. “Smoke detectors play a vital safety role, which is why it is essential to have correctly fitted and properly maintained alarms installed in every Victorian property,” he says. The Smoke Alarm Inspection checklist can be found on REIV’s website www.reiv.com.au

Meet and greet: REIV President Ian McDonald with MIEA President Siva Shanker.

A useful resource – REALESTATEHR.COM.AU

Joint venture: Service Industry Advisory Group Managing Director Brian Cook with REIV CEO Enzo Raimondo.

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The Estate Agent ❘ June 2015

Service Industry Advisory Group (SIAG) and the REIV have officially signed the realestatehr.com.au joint venture, following its successful launch late last year. Realestatehr.com.au is a human resources, industrial relations and employment law service specifically tailored for employers within the real estate industry. The service, exclusively for REIV members, includes online access to realestatehr.com.au, where subscribers will find employment contracts, HR and OHS policies and procedures, template letters, up to date copies of the Award and rates

of pay. Subscribers also receive email notifications of relevant employment updates and quarterly publications. To complement the online service, realestatehr.com.au also offers initial telephone advice with an experienced advisor on a range of HR and IR matters. REIV Chief Executive Officer Enzo Raimondo says the service has been popular with agents, particularly in light of the new changes to the Real Estate Industry Award which came into effect on 1 January 2015.

For further information, please contact realestatehr.com.au on (03) 9644 1400


Bulletin

New Government sets a wrong right The Victorian Government has announced it will repeal planned regulatory changes to commercial licensing in Victoria. The changes were instigated by the previous Government late last year and would have removed the need to involve an agent in large commercial transactions. The changes, under key sections of the Estate Agents Exemptions Regulations 2014, would have removed the need for licensed agents in commercial transactions of more than $15 million, or where the floor area was greater than 10,000m2. The planned regulatory changes were due to take effect on July 1. Jane Garrett, Minister for Consumer Affairs, says commercial agent licensing provides greater protection to buyers and tenants. “The Liberals rushed in changes to regulations which would have driven down standards in the commercial

property industry and put tenants at an unfair disadvantage in property negotiations.” The decision follows a lengthy REIV campaign to have the regulatory changes overturned and is a major victory for the REIV and its member agents.

‘The Liberals rushed in changes to regulations which would have driven down standards in the commercial property industry’ – Jane Garrett 

Panellists look at technology’s edge RealestateVIEW.com.au has taken part in an interactive panel on how technology can be used to improve agents’ bottom line. Attendees at REinnovate, a one-day conference held in New South Wales in April, heard from portal innovators – realestateVIEW’s Petra Sprekos along with

other industry specialists – on creating effective online campaigns. The session detailed how agents can maximise marketing spend through listing presentation, secure more vendor-paid advertising to deliver higher sale prices and the importance of photos and copy

in generating interest in a property. The future of online listings was another hotly discussed topic, Ms Sprekos says. “Real estate portals are leading the way in providing agents with access to vital property information which is attracting … greater market opportunity,” she says.

The Estate Agent ❘ June 2015

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Investment

Closing investor loopholes Foreign investment is helping to meet demand for new dwellings but new penalties are needed to improve compliance with rules

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oreign investment in Australia has doubled over the past year and is now valued at an estimated $34 billion, up from $17 billion, says Parliamentary Secretary to the Treasurer Kelly O’Dwyer. While this investment is helping to meet demand for new dwellings, O’Dwyer says proposed legislation outlined in the Options Paper – the review on foreign investment – is needed to close existing loopholes and improve compliance. Speaking to a packed conference hall at the REIV in April, O’Dwyer, who headed the recent review into foreign investment in residential real estate, said proposed changes including application fees and civil penalties would result in stronger enforcement of the foreign investment framework. “We know that in previous years we have seen divestments of illegally purchased properties but from 2006 right through the period of the previous government there was not one divestment order issued nor was there any court-enforced compliance undertaken and we thought there was something not quite right about that.” O’Dwyer says one of the recommendations highlighted in the Options Paper was the establishment of a national register, which would allow the FIRB to track whether or not someone was a resident or nonresident, and use that information for audit and compliance purposes. The

On the case: Parliamentary Secretary to the Treasurer Kelly O’Dwyer presented to REIV members in April this year.

‘The current criminal sanctions were seen by many people as simply the cost of doing business’ – Kelly O’Dwyer government plans to have this register fully operational by next year. The application fees – $5000 for properties under $1 million, $10,000 for properties valued between $1 million and $2 million and an additional $10,000 for every additional

$1 million – would also help to create a user-pays system. The inquiry also found criminal penalties alone were inadequate as a deterrent. “We also heard that the current criminal sanctions were seen by many people as simply the cost of doing business. So even if you were found to be doing the wrong thing according to the rules, this was something people were prepared to risk and $85,000 was seen as the cost of doing business,” O’Dwyer says. Proposed new civil penalties include a percentage of the value of the property or the windfall gain or a percentage of the value of the purchase price, whichever is the greater. While most recent investment in commercial and residential real estate has been from countries such as China, O’Dwyer says the US remains a significant investor and is Australia’s second largest. Foreign investment is also going a long way to delivering on the roughly 190,000 new dwellings required every year. “The framework itself is right, the distinction we make between existing dwellings and new dwellings is correct, we are delivering more when it comes to new dwellings with foreign investment coming through the door.”

taxes to ensure foreign investors contribute to amenities cost In its latest Budget, the Victorian Government has announced the introduction of two new taxes on foreign investors. From July 1, non-Australian residents who buy residential real estate in Victoria 12

The Estate Agent ❘ June 2015

will be required to pay an additional three per cent stamp duty surcharge. The new tax is expected to generate about $279 million over four years and will ensure foreign investors contribute towards infrastructure and amenities.

Foreign investors who do not reside in Australia will also be required to pay a 0.5 per cent land tax surcharge, expected to raise $52.5 million over the next four years. The new land tax is due to come into effect next year.


the planets have aligned Investment

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The Estate Agent â?˜ June 2015

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Cover Story

Video stars in the big picture Video clips bring properties alive, instantly creating a rapport with buyers as more agents embrace this marketing tool

Visual Domain

Video’s on a roll: Increasingly, buyers want to see more than still photos. They want video footage inside, outside and above. Picture supplied by Visual Domain

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recent video to market a luxury Sovereign Island, Queensland, property received more than one million views and made US primetime ABC News. Co-directed by movie director Brett Clements, the video for Neo Property was like a film, and was produced by international real estate video makers PlatinumHD. Videos push the boundaries and are increasingly catching on, both in Australia and the US.

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Hollywood-style mini-movies to sell property have agents with budgets of up to $1 million hiring actors and script writers. And it works, they say. Film House CEO Kurt Hahn, who makes several a week for Tennessee and Michigan agents, told ABC News

‘Australians are the best at self-deprecating, it’s OK to have fun with it’  – Jeremy Rosens

photographs don’t have emotion. “They don’t sell, they just show. Our movies create an emotional connection with the buyer,” he says. With Nielsen statistics showing 55 per cent of Australians watched video on demand last year – 73 per cent of 16 to 24-year-olds and 60 per cent of 25 to 34-year-olds – it is little wonder agents here are embracing video to sell their agencies, themselves and, in particular, their properties. There could be just 15 seconds to


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engage buyers before they change sites – that’s how quickly we make a judgment on a video, according to Daniel Goldstein, a commercial television producer who, five years ago, founded Visual Domain to specialise in high-quality real estate video. It’s all about that emotional connection with the buyer, says Fletchers director and chair of REIV’s residential sales chapter Tim Heavyside. He appears in his property tour videos and considers them an important branding tool. “Buyers come through the open home and say, ‘I feel like I know you already, you are the bloke in the video tour’,” he says. Heavyside, who has used video for almost five years, describes it as a “force field” between agent and buyer. “They have got a bit of a connection with you. It breaks the ice, you get a little bit of a rapport building,” he says. He has seen video hits increase from 20-30 to 900-1000 during a campaign. Some Gen-Y buyers look for it. “In the early days we had to put on a banner saying, ‘See video tour’. It is now seen as general practice that videos are included, but buyers still get frustrated if they are just seeing photographs being panned and not the agent,” Heavyside says. And while most online viewers look at photographs and floor plan first, “it is the buyers who are really liking what they are seeing who are clicking on that video”, he says. Gary Peer & Associates St Kilda office director Jeremy Rosens agrees. “Looking at pure statistics of clickthrough rates can be a bit misleading because they don’t stack up in terms of views for a property,” he says. “For example, there may be 5000 views for an online advertisement; 50 look at the video. “They are the really interested ones. It is a massive attraction to those that are interested so you need not get massive statistics looking at it.” He says the YouTube generation “expect to look at this stuff online and

Drone cam: Aerial drone footage helps give buyers the big picture on amenities and parklands

they want it in a very easy medium. Video is the perfect solution – short, sharp, it needs to be entertaining.” Rosens, REIV’s 2014 Residential Salesperson of the Year (Principal), was also ahead of the pack – he, too, started using videos about five years ago and features in his. And he finds clients recognise him.

‘There are a lot of new features coming out - interactive, 3-D videos, new functionality and equipment. We have to constantly invest and evolve’  – Daniel Goldstein

He even involves the vendors in the video if he thinks they will look good on camera. “You need to come up with ideas for the videographer,” Rosens says. “Australians are the best at selfdeprecating, it’s OK to have fun with it. “Just panning round the room with music is a waste of time. I believe if you are not in the video yourself you are missing an opportunity to market you and your brand. People want to watch interactive TV, they don’t want a PowerPoint with music. “Fifty per cent is about the house you are selling, maybe 40 per cent, the rest is about you.”

Rosen says videos are about lifestyle and must have more emotive content than advertising copy. Even the most humble property can benefit, he says. “I do it for one-bedroom apartments, it is less about everything in the place and more about where the place is.” The Australian Bureau of Statistics says there were more than 12.5 million internet subscribers in Australia at the end of 2014 and Nielsen expects eight out of 10 Australians to have a smartphone by the end of this year. It says almost 60 per cent of homes have a tablet. YouTube clips are the third most downloaded type of content after photographs and music. So, it’s unsurprising that Marshall White marketing director Sean Cussell says that after resisting for many years the agency has embraced video, making 800 last year. As well as recording agent profile videos, it is now launching individual agent websites. “We resisted video for many years because we did not believe anyone would want to sit through a twominute walk-through of every room in every house – it would be boring, it did not represent the vendors’ best interests,” he says. Other concerns were the security of the vendors’ possessions and that videos were long and slow to load. “We did not want to reduce open for inspection numbers by buyers who had sped around the property online when Continued on page 16

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Cover Story

Continued from page 15

they had not viewed it at all and we would not have had a chance to meet the buyer.” Goldstein, who founded Visual Domain with Renece Brewster, who has a real estate background, aimed for five videos a week when he started. Now he makes more than 100, with clients including Heavyside, Gary Peer & Associates and agents at Jellis Craig and Buxton. In that time the type of video has evolved: “There are a lot of new features coming out – interactive, 3-D videos, new functionality and equipment. We have to constantly invest and evolve,” Goldstein says. “The way we used to do videos a few years ago was very different. Now it is a bit like a movie trailer, you don’t tell the whole story. “People are very time poor, they need the main information quickly and professionally. We judge a video on the first 15 seconds.” Goldstein says watching on mobile devices is increasingly popular, with screen quality constantly improving and potential buyers sharing video with their friends. “That is why it is such great exposure for the agent,” he says. Visual Domain now has offices in Sydney and Melbourne and 50 staff including editors, producers, web

developers, script writers and dedicated account managers for most agencies. Goldstein, whose charges start at $500 for a house, excluding GST, and $2000 with the use of a drone, says agents’ approaches to being in the video vary. “We encourage that whatever it is, the house is hero. The agent should not overshadow the house.” He offers training to those not confident in front of the camera, saying, “it can be a daunting process.” Compton Green managing director Adrian Butera says videos have always been an effective tool to engage buyers as they are easy to consume, have entertainment value and promote an emotional connection to the home. The agency has also been quick to

‘Some agents like to be in the video and some are good at it. If they are not good at it we might tap them on the shoulder and have a quiet word’  – Mike McCarthy embrace new technology and is the first in Melbourne’s inner west to adopt 3D floorplans and 3D video. 3D floorplans allow buyers to walk through open for inspections from the comfort of their own home, giving them a real feel of the property. “Buying a property is a significant life event and this advanced technology

makes the process so much easier. Often buyers forget what a particular room looks like after inspection and 3D allows a potential buyer to revisit again and again,” Butera says. Compton Green features its agents in its videos, believing it adds a personal touch and welcomes the viewer into the property. “The new innovations we are using are groundbreaking for the real estate industry. 3D is an incredible option for international buyers as well because they get to experience the properties online from a remote location and it enables them to make informed buying choices.” After brainstorming with Melbourne photographic company Digital Photography Inhouse (DPI) Marshall White decided to create videos “like a short to a movie, highlighting the three or four main features of the property and giving the buyer a snapshot. It may be that it is close to a shopping strip, the swimming pool, the garden,” Cussell says. “So ours are not video tours and we have had extremely successful take-up.” He says the videos, about $1200 each including copyright fees for using music, are kept to less than a minute after the agency discovered the average viewer lasts 43 seconds. “So the editing is very important, to keep the viewer engaged. That is done by DPI in consultation with the agent. The agent is given a questionnaire to fill out identifying the most important thing with this video. The music is chosen by DPI.” Marshall White agents do not appear in their property videos – an issue on which agencies across the state diverge. Some – Gary Peer, Nelson Alexander, for example – are happy for their agents to “show” the buyer through the property. Cussell says some agents are fantastic on camera and some are terrible. “It is not about the agent’s ego, it is about achieving the best price for the vendor,” he says. “The market does not want to have an agent talking about the property, it comes across as cheesy so we made a conscious decision not to include In focus: Agents can use video clips to promote the property, themselves and their brand.

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The Estate Agent ❘ June 2015


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‘We have props, we take the mickey out of each other; I think people like us because it is two guys talking about the market. We interview people, interact with the audience, do giveaways. It has certainly given us an edge in the marketplace’ – Jeremy Rosens  the agent. It needs to be centrally managed.” For large franchises such control can be difficult. Mike McCarthy, Barry Plant CEO, says that with 1200 people working for about 80 offices it is impossible to view everything. Barry Plant has no specific policy on whether or not the agent should appear in the video, but poor quality reflects badly on the company and the principals try to regulate quality, he says. “Some agents like to be in the video and some are good at it. If they are not good at it we might tap them on the shoulder and have a quiet word.” Barry Plant offices, such as Reservoir, make extensive use of video, even for humble villa units. “A picture is worth 1000 words, a video can show 100,000. It is increasingly important for showcasing a property in the best possible way,” McCarthy says. “Barry Plant operates in many mid to outer suburbs and there is no reason we cannot showcase those

Sound check: Agents can combine music and commentary with video to promote properties to both social media savvy buyers and the increasingly sophisticated wider market. Phillip Kingston from Gary Peer is pictured above.

properties just as well,” he says. The Professionals, already holding a monthly webinar with its head of property management, is taking this further by using live streamed video to enable regional agents – in Mildura, for example – to participate in its training program without travelling to Melbourne. Chris Longley, Professionals state business manager for Victoria, says those agents will be given a login code for YouTube. Training has included use of video and in conjunction with the awards evening earlier this year each agent was offered the chance to make two recordings with Visual Domain – a thankyou to potential vendors after an

stick to this video script ❚ Training helps. If you are not a natural

❚ Plan ahead, use a script and

in front of the camera (and don’t rely on your own opinion) seek help from the professionals. ❚ Keep it short. Marshall White has found buyers stop watching after 43 seconds. Visual Domain’s Daniel Goldstein says viewers judge a video on the first 15 seconds. ❚ Use professional videographers and editors. A poor quality video is worse than none at all.

rehearse. Don’t ad lib, but try to look relaxed. ❚ Don’t just regurgitate your advertising copy. The video must talk about lifestyle and make an emotional connection with the viewer. ❚ Consider the home’s colour scheme when choosing your outfit – you don’t want to blend into the walls. ❚ Be sure to brief the camera operator on anything you DON’T want included.

appraisal and a thankyou for attending an open for inspection. For many younger buyers, “a 10-second video message really hits home more than an email or a phone call”, Longley says. Barry Plant is also using video to grow its brand and for agent profiles. McCarthy says it is investing in technology at head office to communicate market messages through video newsletters. Gary Peer & Associates is a leader in this field. Rosens says the agency’s weekly, 20-minute GPTV “goes to the database and on every email that goes out of this office”. As well he does a monthly bayside homes bulletin. The click through rate is huge, he says. Rosens, show host with Gary Peer, says the key to its success is that it is entertaining. “We have props, we take the mickey out of each other; I think people like it because it is two guys talking about the market. We interview people, interact with the audience, do giveaways,” he says. “It has certainly given us an edge in the marketplace.” Goldstein points out that “videos live online forever so if someone wants to research a property, they type the agent’s name into Google and get hundreds of videos. It gives them comfort and reassurance.” Agents without a video strategy are missing the boat, he believes. The Estate Agent ❘ June 2015

17


Cover Story

High and mighty: Drones can give buyers a greater appreciation of a property’s surrounding environment and its location within the block.

Drones can help get sales off the ground Aerial cameras are an effective marketing device, but you have to keep an eye on them Agents wanting an eye in the sky perspective on properties for sale are making increasing use of drones – more correctly described as remotely piloted aircraft. Jan de Boer, general manager Victoria of Coptercam, which specialises in remote aerial cinematography, says aerial pictures can help clarify the property’s dimensions. “For example, an aerial picture or video might illustrate the large size of a house and the way it sits within its surroundings that isn’t visible at street level or can’t be captured in conventional ground photography, ” he says. Compton Green has been using drones in its videos since the start of the year. Managing director Adrian Butera says drones are particularly effective for properties with a view, prime position or large land size. ”The first property where we used a drone was at 74 The Strand, Newport. A drone was particularly effective in this instance because we wanted to capture the full scale of the grand land dimensions and showcase the waterfront position,” Butera says. He says drones provide potential buyers with a chance to learn about the home’s neighbourhood and give a feeling of the area. “Drone videos are such an effective way 18

The Estate Agent ❘ June 2015

to engage buyers and we have been blown away by the advancement of real estate technology in recent times,” he says. Marshall White marketing director Sean Cussell says drone footage, costing about $1800, is particularly useful for properties with large land areas, those close to a beach or water or with a great view or near a park.

‘Drone videos are such an effective way to engage buyers and we have been blown away by the advancement of real estate technology in recent times’  – Adrian Butera Visual Domain director Daniel Goldstein, who works regularly with Coptercam, says use of a drone adds about $2000 to the cost of a video, while a helicopter can add $5000-$10,000. “Drones are very popular at the moment, but it is vital to use a reputable company with the licences and insurance,” he says. “We find that agents all over Melbourne are happy to pay for a drone.” He says it is not just for those with wealthy vendors; “a few years ago people had the

perception it was just for high-end homes”. Few Melburnians would have missed last November’s story of the removal of a sale board showing a woman sunbathing in her own backyard – a drone shot of a neighbouring property. The Civil Aviation Safety Authority, reviewing the rules for drones, expects to have rewritten regulations out next year. Last year Terry Farquharson, Acting Director of Aviation Safety, wrote to the REIV and other state institutes about the potential safety risks and the need to be familiar with the current regulations governing their use. He said these limited the height at which they could fly, how visible they must remain, how close they could come to people on the ground and how far they must be from aerodromes and other aircraft. His letter came after CASA ordered South Australian agency Toop & Toop to ground the drones it was using. CASA reportedly told the agency it wasn’t authorised to use the drones which were imported from the US. De Boer, whose Australia-wide company has been using remote aircraft since the 1990s and was licensed in 2012, says the coptercam can be remotely controlled from as far as 1.5km. But it usually remained close to the operator for real estate photo and video work. Farquharson also warned about the privacy implications: “As what is still a very new technological innovation and social phenomena, the implications RPA activities may have for privacy-related property and other laws, over which CASA has no jurisdiction, are not yet fully settled. In this area too, you and your members should take appropriate steps to understand just what may and may not be permissible.”


Oc, opo Profile

People skills, dedication give Jacinta her golden touch Historic mining town Bendigo offers winning lifestyle for city sellers

J

acinta McIvor reckons she’s boring: one town, one job, one husband. “It’s not much to fill a page,” she tells EA. But McIvor, a licensed real estate agent, one of three directors of Professionals Bendigo and secretary of the REIV’s Bendigo division since 1997, undersells herself. One of just three women in the industry in Bendigo when she began in the family business straight from school in December 1980, McIvor has seen the regional centre’s property market grow and evolve, yet retains her enthusiasm for her city and the industry. “Every day is a different challenge, you really meet some great people. Real estate is a lifestyle, you are not stuck in an office all day,” she says. “I still get the buzz and I have still got that drive in me to get the listing. There’s that little bit of terrier in me.” She is also thrilled to see Melbourne buyers moving to Bendigo, choosing its lifestyle but with the schools and infrastructure families need. “Selling in the city, they have money over, they can buy a quarter acre block,” she says. It is also more affordable for firsthome buyers, with entry-level homes available for $220,000-$250,000. “Seeing young people getting into the market is pretty exciting,” says McIvor, who has advised her own three children to “not spend all their money in the nightclubs” and save for a property. Her eldest daughter Grace, 24,

Dream team: Jacinta McIvor with cousin Danny Clarke (left) and uncle Terry Clarke (right).

has taken that advice. Working on client mortgages for the Bendigo Bank, she has already bought her first property. McIvor happily admits she knew nothing about real estate when she joined Clarke McIvor Real Estate, then a two-person firm – herself and her uncle, Terry Clarke, another of Professionals Bendigo’s directors, along

with Terry’s son Danny. “I was the bimbo receptionist,” she laughs. But she soon discovered that with such a small team, sitting around behind a desk wasn’t an option. “Sales was one of those things you fell into. If people wanted to see the house, you would show them the house.” Continued on page 20

The Estate Agent ❘ June 2015

19


Profile

Team McIvor: Jacinta McIvor and staff sell pink cupcakes and candy on the footpath outside the agency to raise money for breast cancer research and support. Jacinta also organises fundraisers for less-privileged countries. Continued from page 19

McIvor, whose business has now grown to a staff of about 15, obtained her sub-agent’s licence, then studied by correspondence and at night school and obtained her licence in 1986. Thirty-five years since she started work, she is a mine of information about the regional centre, its housing stock and its people. Every three months everyone on her database of about 600 receives a small gift – a notepad, a magnet or a pen, perhaps, along with a handwritten note. And an eye on the local newspaper’s public notices ensures births, deaths and big occasions are also marked with a note. “That database works for me, it’s unbelievable. These people were good enough to come and get me to do an appraisal or list with me and you have to give back. If you are going to be in this industry, if it is going to be your life you have to give back.” It is just one example of her belief in the importance of what she calls “the basics”. “You can have as much knowledge as you like but you still need people skills and the basics, for example feedback, getting back to people, knowing your stock, being involved in the industry, being 20

The Estate Agent ❘ June 2015

involved in the community – that gives you credibility.” For McIvor charity activities are an important part of that giving back. Professionals, which her agency joined five years ago, is a diamond sponsor of the National Breast Cancer Foundation. Last year, her office received its national award for its fundraising efforts – efforts which have taken on greater personal meaning for McIvor since one of her best friends, a mother of three, died of breast cancer eight years ago at the age of 44.

‘These people were good enough to come and get me to do an appraisal or list with me and you have to give back. If you are going to be in this industry ... you have to give back’ Her fundraising efforts include a “massive girls’ night in” for 250, hosted at her home and complete with a theme, a band and husband waiters. Also, in October, pink-clad staff sell pink cupcakes and candy on the footpath outside the agency. And in “Octobra” – livewire McIvor has trademarked the name – the agency,

in conjunction with other Bendigo organisations, collects recycled bras for distribution to less-privileged countries. Last year, 3000 decorated a Bendigo tram before being sent to Melbourne for shipping. The previous year they were strung more than a kilometre around Lake Weeroona. Bendigo-born McIvor loves Bendigo’s housing stock, in particular its heritage Victorian properties and its rich gold mining history. But the city has a mix of homes and she says adjustment to rapid changes is essential in her job, with many being demolished to make way for townhouses. She says Bendigo’s pace of growth, development of apartments and the sprouting of new estates in areas such as Strathfieldsaye make it important to keep abreast of change. But it also makes it more difficult for the regional agent to take advantage of that “everyone knows everyone” ethos. “Years ago you used to walk into a cafe and say ‘hello’ to everyone. Now you walk into a pub or a cafe and you think, I don’t know anyone here.” But unlike in Melbourne, the local agents are mates, she says, paying tribute to the support and respect of her fellow members of REIV’s Bendigo


Oc, opo Profile

division which has few women attendees. “The guys in the Bendigo division, they have all treated me with absolute respect,” she says. The division, which meets every three months, is well supported with local agents willing to go the extra mile for charity. The enthusiasm with which they embraced last year’s ice bucket challenge to raise funds for motor neurone disease research shows that, McIvor says. “The comradeship was amazing. I compiled a video of each challenge and put it to music to play at the Christmas break-up last year. It was a huge hit.” Also well supported are the past presidents lunch, which she organises, and the annual wreath-laying on Anzac Day and Remembrance Day. And being a woman in the industry can be a bonus: “I think some people feel more comfortable dealing with women than they do with a man. “They are interested, they have a bit

Hard yards: Jacinta McIvor’s secret to success.

of compassion.” She tells of having a hug and a little cry when a woman was distressed at selling her marital home after the death of her husband. A bloke

‘I think some people feel more comfortable dealing with women than they do with a man’

would have just stood there feeling awkward, she says. It is a long way from her schoolgirl dream of becoming a hairdresser, and McIvor pays tribute to the support of husband Bert and her three children – Grace, Riley and Reardon – in enabling her to work long hours. “You have got to do the hard yards, you are not going to make it if you don’t work Saturdays, you are not going to work 9 to 5.” McIvor, who is not on Facebook or Twitter – if she wants to contact someone she rings them – may have seen her city grow from one set of traffic lights to cross town to five sets, but she believes even in this digital age personal connections and working contacts lie at the heart of success as a real estate agent. And while it may seem “boring” to have lived and worked all her life in the town where she was born she has no hesitation in saying, “it’s a great regional city, I am bloody happy here”.

The Estate Agent ❘ June 2015

21


Market Update

Million-dollar milestone Low interest rates and a buoyant auction market have powered Melbourne’s inner suburbs into new price territory

T

he median price for a home in Melbourne’s inner suburbs topped $1.1 million for the first time in the first three months of this year, with the $1,164,500 median up from $1,099,000 in the December quarter – a 6 per cent increase. This was a change of 11.7 per cent in the inner suburbs’ median over the 12 months to the end of March, with the buoyant auction market and low interest rate environment driving price growth. Inner Melbourne median house prices have been rising since June 2012, when the median was $848,500. By the September quarter of 2013 the median of $971,500 broke the previous record, set in March 2010. Since then, there has been an increase and a new record every quarter. By the end of March there had been 7600 auctions in Victoria, 4200 of them in March, when there were four “super Saturdays” with more than 1000 homes going to auction. In the week ending March 29, 945 homes sold at auction – the second highest number on record. The 76 per cent clearance rate for the year to 31 March was the highest for five years. Inner Melbourne also had the fastest private sales in March with days on market falling by 11 to 38. The middle-ring suburbs saw solid growth in the March quarter with the $791,000 median up 4.4 per cent on the December quarter. Middlering price growth for the year to 31 March was 12 per cent. The unit and apartment market there was also buoyant with 3.9 per cent growth for the quarter and 8.8 per cent for the year to 31 March. The March quarter’s top growth suburbs were all in these middle suburbs. They included Mount Waverley

22

The Estate Agent ❘ June 2015

Bright outlook: The median price for middle-ring suburbs was up 4.4 per cent in the March quarter.

with 19.7 per cent, Bentleigh with 18.3 per cent, Beaumaris with 16.4 per cent and Burwood with 16.1 per cent. Toorak, Newport and Essendon all recorded growth of more than 15 per cent, Diamond Creek grew by 14.2 per cent for the quarter and Surrey Hills, Port Melbourne, Lalor and Richmond grew by more than 13 per cent. The 10 most expensive suburbs for the quarter were all in the east – either inner or middle ring suburbs. Top of the list was Toorak, with a 15.8 per cent

Suburbs in which downsizers are selling big homes and buying apartments in the same area also featured on this (strong apartments) growth list – among them Brighton, Hawthorn, Kew and South Yarra

increase, followed by Brighton with 11.5 per cent and Balwyn, 10 per cent. Others on the list were: Camberwell, Kew, Surrey Hills, Hawthorn, Balwyn North, Glen Iris and Malvern East. Prices stabilised in outer suburbs with the March quarter median $503,500, up 0.2 per cent. The 12-month figure was 7.6 per cent. The median house price for metropolitan Melbourne for the March quarter was $688,000, up 3.5 per cent on December’s $664,500. Growth over the 12 months to 31 March was 10 per cent. Apartment prices were also up across the city with the $519,500 median up 2.2 per cent on December and 5.2 per cent in the 12 months to 31 March. Suburbs showing strong growth in apartment prices across the quarter (note these include only those with a minimum of 25 sales) included


Market Update

Chelsea, with a 19.7 per cent increase, East Melbourne, up 18.2 per cent, Balwyn, 17.6 per cent, and Brunswick West, 17.1 per cent. Suburbs in which downsizers are selling big homes and buying apartments in the same area also featured on this growth list – among them Brighton, Hawthorn, Kew and South Yarra. Most expensive units were in Toorak, Brighton and Balwyn but there are still some bargains: March’s median unit price in Frankston was $298,750. Units in Dandenong, Noble Park and Carlton all had a median price of less than $330,000. Most affordable suburbs were little changed from December, with Werribee top with a $315,000 median. Also on the list were Melton West, Hoppers Crossing, Wyndham Vale, Hampton Park, Pakenham, Carrum Downs, Deer Park, Sunbury and St Albans. All experienced small quarterly falls in median price, except Melton West which was up 1 per cent and Sunbury, up 2.1 per cent.

regional markets share the surge Volupta experis House prices in regional Victoriarem grew by Rero exercia dolo tem vole`st 6.3% in the 12 months to the of March, et fuga. Ucium iditatent, sit end omnis aautaten`t steady improvement reflecting volorep erspit ad earisAustralia’s et low interest rates.tendit Growth for units and volupta experis quatium harchit apartments up que 2%. sus ad ut eius facerferumwas apicia There was some slowing in the March aut et quam, autesedEfacchil verrius quarter, with the median house price pessus consultis ius, condum te, esof $341,000, down 1.2% on December. But clumus inatque esu quonique confecu this was Ita up by 5.4% on the March 2014 tenirit? publi publiu contestri perdi median. units cusciam and apartments pubista The consilis, vidiena,median for the quarter, $262,000, up 2.3% on Catus, noris ent? Ur. Serowas pratiamquit the December quarter. However, latest data Catemuscitam senducto aves fuitaren varied substantially between regions and dit, no. Cis, etili pra, te quam poeninc between in thoseconcem, regions.sul Important erferma towns ximunimius, factors includeidtransport links, conscioHent quae volor aminetparticular la travel time toeaquuntur, Melbourne,tem and resequiam school comnis ped and facilities. Kyneton, with qui shopping cdolorreniratae erit, Lant que qui 13.4% growtheprati and adelicte March median rerchilannual int quianda nobit, of $465,000, Castlemaine, with 10.7% growth and a $408,750 median, Woodend with 21.7% (median $645,000) and Corio with 9.1% ($240,000) are all sought by families and first-home buyers priced out of Melbourne. So, too, Bendigo with 19.8% annual growth ($401,250 median);

it also has job opportunities with the new hospital project. House prices in Geelong increased 20.4% over the year with a March 2015 median of $590,000. New Gisborne ($556,300 median and 13.5% growth) and Traralgon (8.4% growth, $303,050 median) are also within commuting distance. Lifestyle was also a factor. Yarrawonga (median $334,250) had the highest annual growth in regional Victoria for the year to end of March(28.6%) – Albury airport is an hour away, the wineries are 20 minutes and the snowfields two hours. The second highest growth centre was Wangaratta, with 24.5% in the 12 months to March and a March median of $302,500. Others among the top 20 growth areas included Benalla, Hamilton, Mildura, Red Cliffs, Sale, Ballarat East and Canadian in Ballarat’s east, Daylesford and Strathfieldsaye. Standout March quarter performers included Canadian, with a 12.1% increase, New Gisborne with 9.6%, Newborough, with 9.5%, Daylesford with 7.1% and Kyneton with 7.5%.

The Estate Agent ❘ June 2015

23


Member News

Experts share tips on how to get the best outcomes Expert negotiation was the focus of the Sales Chapter’s first breakfast seminar for 2015. Panellists Nicholas Lynch, Leigh Maher and Travis Milton provided attendees with valuable insights and advice on how to keep commission yields at a premium, influence buyers to achieve the best possible sale price and understand transitional negotiation techniques. Considered one of Australia’s leading estate agents, Lynch has built

and sold two leading agencies and is regarded as an exceptional auctioneer, conducting more than 8000 auctions during his 25-year career. Fellow panellist Maher has extensive experience in a variety of successful agencies and is Morrison Kleeman’s Eltham branch manager. Award-winning auctioneer Milton is director of hockingstuart Ringwood and his outstanding negotiation skills lie at the heart of his success.

Handy hints: From left, Tim Heavyside, Nicholas Lynch, Travis Milton and Leigh Maher.

RISK MANAGEMENT A HOT TOPIC The Commercial and Industrial chapter’s first breakfast seminar of the year was well-supported by REIV members, attracting about 80. The seminar focused on the highly relevant subject of risk management with industry experts Craig Terrill (Terrill & Holmes Lawyers) and Derek Hendry, pictured above, (Hendry Essential Property Services) covering notification of public liability claims, proportionate liability reforms, risks arising from tenant improvements to leased buildings, permitted use and building occupancy permit risks. Hendry’s extensive presentation, inclusive of links, can be accessed via REIV’s website.

Southern members given sound advice The Southern Division treated members to three engaging presentations in its first lunch seminar of the year. REIV Senior Vice President Geoff White addressed issues facing the Board and updated attendees on the state of the market, including the increasing popularity of auctions. Vice President Leah Calnan discussed key issues affecting property managers including pool fencing requirements and smoke alarm updates. Matt Nichols, who recently 24

The Estate Agent ❘ June 2015

stepped down from the REIV Board, provided a thoughtprovoking presentation highlighting the need for agents to return to basic communication with clients, rather than rely on technology. Once a week Nichols ensures all digital devices are switched off in his office with agents required to pick up the phone and talk to clients. Nichols also covered the latest developments within the Commercial and Industrial sector.

Key issues: Matt Nichols, Leah Calnan and Geoff White.


Member News

Young guns’ sights on future Looking to boost its profile and encourage new agents to join the REIV, the Young Agents Committee says it is focused on providing quality educational events in the year ahead. Its first event, How Buyers Agents and Sales Agents Negotiate, featured panellists Janet Spencer, Hugh Jones, Sam Gamon and Toby Parker and drew more than 50 members last month. With three new committee members – Samantha Taylor from Metro Property Management, Jacob Caine from Caine Real Estate and Jonathon O’Donoghue from First National – the chapter is well placed to recruit young agents. Taylor fell into real estate after starting as a receptionist. Now working as a Business Development Manager at Metro, Taylor says she joined the committee to better understand the REIV and its operations. “If you’re not engaged with the industry then you don’t really know what’s going on and you haven’t got a say. If you’re involved then you are informed,” she says. Caine, a second-generation agent, spent a decade as a professional opera singer before joining the family business. In his first stint on a committee, the new member hopes to contribute and be involved in future policies. “I’ve been involved in real estate since 1996 when I used to clean the offices

Rising stars: Back row from left, Thomas Georgiou, Jonathon O’Donoghue, Samantha Taylor, Courtney James and Emily Rutherford; front row from left, Brant Williams and Jacob Caine.

and I’ve done everything in between. I think it’s really important to have strong industry representation and being a member of the REIV should be mandatory for all new agents,” he says. With 12 years’ experience in the industry and a third generation agent, O’Donoghue agrees. “Being an agent should be perceived the same way builders and CPA are. If you use a builder then they have to be qualified and if you use an agent then they should be licensed,” he says. Long-standing committee member Courtney James says there are incentives

new agents should be taking advantage of. “There is a 12-month free REIV membership for students who complete the Agent’s Representative course at the Institute and gain employment with a member agency within three months.” The Young Agents Chapter has representatives aged between 18 and 35 from all sectors of real estate – a point of difference from other REIV chapters. If you’re interested in joining the Young Agents chapter, please contact Emily Rutherford on 9205 6652

BMW DRIVE DAY The BMW Drive Day at Phillip Island rewarded 20 lucky REIV members with a white-knuckle driving experience. The member benefit event provided those attending with a foundation in performance driving, enabling them to enhance their driving technique and learn essential safety skills. For other member benefits, go to reiv.com. au/Members/Member-Benefits-Program All revved up: REIV members enjoyed a thrilling drive at Phillip Island.

The Estate Agent ❘ June 2015

25


Achievements

A brilliant knock by a stalwart of the industry Malcolm Gray led from the front foot as a long-time administrator of cricket and in his beloved field of real estate

M

alcolm Alexander Gray AM recorded a half-century in February. But the renowned Australian cricket administrator’s days of making runs on the pitch are long gone – rather, he achieved the milestone of 50 years as a member of the REIV. It was yet another in a lifetime of laudable milestones and achievements, most notably being made a member of the Order of Australia for services to the real estate industry and to cricket administration in 1993. Yet when Gray, an REIV life member, left school he attended Dookie Agricultural College. It was not a plan which included the family real estate business, Gray Johnson, started by his grandfather and now 101 years old. Even then, though, he had a property-related career in mind. “I thought I might go into a stock and station agency,” he says. But having “got the agricultural bit out of my system”, he studied commerce at Melbourne University, working at the family firm during university holidays and joining it when he graduated in 1963. Gray Johnson specialises in

26

The Estate Agent ❘ June 2015

commercial and industrial real estate and Gray moved into industrial work, developing his specialty – cold storage, brickmaking, quarries and special-use properties. “The firm back then had four offices, all suburban offices. After a year or so I decided to come into the city and open a city office specialising in industrial real estate,” he says. “Australia had been living off the sheep’s back in the ’50s and early ’60s and it was becoming industrialised and industrial activity was very strong.”

‘Real estate has been wonderful in all sorts of ways, both in terms of business and financially and also just enjoyment ... some of the fights were a lot of fun’ – Malcolm Gray  A Gray Johnson executive director, he still chairs the agency and goes to its Collins St offices every weekday – his idea of scaling down. “I used to work six days, with auctions on Saturdays, so this is easy,” he says. “But I am still on five or six company boards.”

Gray has no regrets about his career choice: “Real estate has been wonderful in all sorts of ways, both in terms of business and financially and also just enjoyment,” he says. But it has always been part of an extremely full life with commitments ranging from commercial directorships to working with not-for-profit organisations, as well as contributing to property industry bodies. Gray served as president of the REIV from 1973 to 1974 – his father Alex had also been president – and of the REIA from 1982 to 1984. He pays tribute to the mentors he has had through that involvement, the amount he learned – he was the first winner of REIV’s novice auctioneers competition – and says frankly that it also helped increase his profile. “It was thoroughly enjoyable, some of the fights were a lot of fun,” he says. REIV CEO Enzo Raimondo says Gray has made an invaluable contribution to the organisation. “As one of our longest-standing members he has not only served the property industry at an agency level, but worked to represent and assist his


Achievements

fellow industry members at state and national level.” Through his REIV involvement Gray was a director of RESI (Real Estate and Stock Institute of Victoria) Statewide Building Society and, when it was granted a banking licence and went public, became deputy chair of the Bank of Melbourne for 12 years until it was sold to Westpac. He has also held directorships with OFM Ltd, Wildsmith and Gray Pty Ltd and Heath Lambert (Insurance Brokers). And he is a former member of the Victorian Civil and Administrative Tribunal (VCAT). Today, some of his commitments have family links. For example, for the past six years he has chaired BQ Design, a custom soft furnishings manufacturer, his sons’ company. And he has been a director of Diabetes Australia and the Diabetes Australian Research Trust for more than 20 years – a commitment prompted because his eldest son, now 40, was diagnosed with diabetes at five. Gray is also a non-executive director of Bennelong Funds Management Limited, a privately owned funds

His only regret ... did ‘not catch more scalps ... none of us realised the extent of the problems cricket had at the time’ management and private equity business, Bennelong Group Holdings Pty Ltd and the Bennelong Foundation – he jokes about his involvement with a group with holdings including 26 golf courses, a game he does not play. Because, of course, his game is cricket. It is through this game, which he began playing at Melbourne University, though never higher than the fourth XI, that many Australians know his name. He has served as chairman of Cricket Victoria, of Cricket Australia and president of the International Cricket Council, taking charge in 2000 at the height of the match-fixing scandal and leading the fight against it. According to ESPN Cricinfo he tackled the issue head-on, saying his only regret at the end of his three-year term was that the anti-corruption unit, which he helped establish, did “not catch more scalps” adding, “none of us realised the

extent of the problems cricket had at that time”. He was also instrumental in paving the way for South Africa to return to the cricketing fold, and during this year’s World Cup reminisced to the cricket media about South Africa’s re-emergence in the 1992 tournament, only to be dudded out of reaching the final by the wet weather rule. He was a member of the 1992 World Cup committee – a competition “run off the back of an envelope” he told The Age. That committee was thrilled to make $5 million profit, a striking contrast to the $250 million made this year, largely as a result of the television broadcasts. Congratulated on his own halfcentury, Gray laughs and says, “commiserations, more like” – bewailing the passing of half a century rather than regretting his career choice. But clearly age is not holding him back. As well as his many commitments he mentors young people starting out in real estate. And he says, “I am considerably fully employed, where as I used to be ridiculously overwhelmed.”

Many REIV members marking milestones in 2015 Thirty REIV members have this year achieved membership milestones – a tribute to their commitment to their careers in the real estate industry. While 11 members have attained the 10-year membership mark and 13 have been members for 20 years, two have been members for 30 years, two have The other REIV members to achieve membership milestones in 2015 are:

achieved the remarkable feat of 40 years in the REIV and another two have attained their half-century. Malcolm Gray (see profile starting on previous page) and Mike Michelson (see profile in the September issue of EA) both joined the REIV in 1964.

Le-Hoa Wysham

20 years

Wesley Belt

10 years

Russell Turner

20 years

John Sanderson

10 years

Russell Parrington

40 years

Jamal Dabab

20 years

Manos Findikakis

10 years

Geoff Green

40 years

Glen Coutinho

20 years

Maria Findikakis

10 years

Linda Wooley

30 years

Simon Jones

20 years

Wilma Grumont

10 years

Mark Rathgeber

30 years

Adam Gillon

20 years

Graeme Callen

10 years

John Pollard

20 years

Brenton Wilson

20 years

Janine Gerdsen

10 years

Peter Cordner

20 years

Duncan Mcpherson

20 years

David Wilson

10 years

Mark Sutherland

20 years

Mauro Torelli

20 years

Richard Simpson

10 years

Reecy Owins

20 years

Tom Adelinis

10 years

Dennis Dellaportas

10 years

The Estate Agent ❘ June 2015

27


Awards

Big V for victors

Melbourne’s Nelson Alexander leads the way as Victorian agencies take out five major categories in the national excellence awards

T

he quality of Victoria’s industry professionals shone through in this year’s Real Estate Institute of Australia National Awards for Excellence. Victoria took out five major categories at the awards, presented by REIA national president Neville Sanders (also an REIV past president) at a glittering function in Perth in March. The night was a triumph for Melbourne agency Nelson Alexander which collected the Large Residential Agency of the Year and the Community Service Award.

‘Victoria’s property professionals include not only top performers in this state, but at a national level’ – Enzo Raimondo The 13-office agency, with 265 staff, won those same awards in the REIV Awards for Excellence last October. It was profiled in the January issue of EA and managing director Paul Lunardi highlighted the quality of northern suburbs-based Nelson Alexander’s people as the key reason for its success.

Best of the best: The REIA’s National Award for Excellence 2015 winners.

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The Estate Agent ❘ June 2015

He told EA its sales volume had been $2.1 billion for the past 12 months and its charitable foundation had raised more than $1.3 million since it began seven years ago. REIV CEO Enzo Raimondo said: “This shows Victoria’s property professionals include not only top performers in this state, but at a national level. Victorian agents and their businesses are constantly lifting professional standards and contributing to best practice in Australia.” Other REIA Victorian winners are profiled in the following pages.


Oc, opo Awards

REIA Salesperson of the Year Mark Di Giulio, Barry Plant Manningham Sometimes, mum and dad really do know best. When Mark Di Giulio was studying marketing at Swinburne University but disliking it and lacking direction, it was his parents who suggested he might be suited to real estate. Although there was no family connection to the industry, they suggested, ‘You are always talking, real estate is about talking and understanding people’. “I got into it that way,” says Di Giulio, who completed his course first. His parents were right – before his REIA award success Di Giulio took out REIV’s Residential Salesperson of the Year (non-principals) award for 2014. Last year, he took $1.7 million in gross commission and this year is on target to achieve his record of $2 million. The key to his success? “Being authentic and being the best version of yourself,” he says. Di Giulio got his start at 21 as assistant to Spiro Drossos, owner and principal of Barry Plant Manningham. Drossos, three times REIV Residential Salesperson of the Year, went from real estate beginner in 2003 to buying his own business in 2009.

“Spiro is a great boss and mentor, he has great processes in place to make sure that you succeed,” says Di Giulio, who himself aspires to becoming a partner and business owner one day. “I worked as an assistant for about two years. Then I went on my own as a consultant. From age 23 to 25 I was finding my feet and still working out what worked well for me. “From 25 to 31 I have been going from good year to better year to best year to breaking records. It was not an overnight success. I am only hitting my straps the last five to six years.”

‘Every day is a new day, you get to assist people to move on with the next stage of their lives and that is an important thing’ – Mark Di Giulio Di Giulio admits he did not enjoy real estate for his first six months in the job – it took time to adjust. So he advises young agents, new to the business, “If you are not enjoying it that’s okay”. The way to deal with that is “embrace it, integrate into your life,

Leading the pack: From left, David Airy, Hayden Groves, Rob Druitt, Neville Sanders and Neville Pozzi.

Real deal: Mark Di Giulio says authenticity is the key.

it can open doors for you,” Di Giulio says. “Every day is a new day, you get to assist people to move on with the next stage of their lives and that is an important thing. “I enjoy the chase aspect: getting the listing, getting the sale,” he says. “Real estate is related to psychology in a way – to get people to lean towards your way of thinking but then actually making the decision themselves, versus pushing people to do what they don’t want to do.” Di Giulio says that having achieved so much in a relatively short time leaves him asking himself, what’s next? “I suppose what I think for me is really sharing what I know with other people and to get other people to aspire to achieve their goals.” He looks forward to mentoring and passing on his own experience in running an effective business unit through public speaking and training within the Barry Plant group. Constant training is vital, says Di Giulio, who has studied auctioneering, public speaking and drama, including practising his listing presentation in front of a drama teacher. “Family and friends are too kind, your sales manager is too sales focused,” he says. It is about “making sure you are as authentic as possible”. The Estate Agent ❘ June 2015

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Awards

New home: CBRE Victoria’s new activity-based workplace at 8 Exhibition St.

Commercial Agency of the Year CBRE (Victoria) For CBRE, 2014 was the year in which several projects, underway for some time, began to bear fruit, says senior managing director for Victoria Mark Coster. The agency’s offices in the Rialto building and at 395 Collins St consolidated in its new premises at 8 Exhibition St – not just a modern new office space, but an activity-based workplace branded within CBRE as Workplace 360. Coster says it has had a positive impact on performance. “We reduced paper storage by 40 per cent and have invested significantly in the technology available in the space,” he says. “It is a more collaborative workplace with staff working in neighbourhoods. This enables our employees to work in their teams on a day-to-day basis, but also provides flexibility to work in other neighbourhoods with different teams as their work necessitates. “This way of working had an almost immediate impact in terms of performance and service to clients.” The change is being phased in by CBRE around the world, with more than 20 of its offices now activitybased. This global business has been operating in Victoria for more than 80 years and its team of more than 300 employees in this state is part of its 30

The Estate Agent ❘ June 2015

Pacific business, which includes more than 2000 staff across 21 offices. Coster says the one-and-a-half floors in the building comprise the same floor space as the previous two offices, yet staff numbers have increased and staff do not have a dedicated desk. He says the new space is more efficient and collaborative, including breakout rooms. “It has enhanced communication among the staff

‘This way of working had an almost immediate impact in terms of performance and service to clients’  – Mark Coster considerably,” he says. “Staff have enjoyed the modern space and the amount of effort the company has really put into the space itself.” Another initiative Coster is proud of is CBRE’s efforts to develop the female talent in its business, in particular its women’s leadership program. “We’re bringing more women into CBRE in all roles – agency, investment, professional services – and developing the talent we already have,” he says. “We would like to be an employer of choice for women.” Coster says CBRE encourages its staff to take an entrepreneurial approach

to their jobs and to use the expertise available throughout the group – inhouse offerings which some other agencies may need to outsource. “We have developed a wide range of property-related services with each business line comprising a team of professionals who are experts in that area of the market place,” he says. “This depth of knowledge creates a real advantage for our clients. Traditionally, you would list a property and just sell it. But our focus is to create value for our clients by drawing on our diverse business platform to provide a full suite of property services that relate to their property portfolio.” He cites last year’s “challenging” $550 million sale of the Ingham’s portfolio, a 10-month assignment across 52 properties. It included the agribusiness, industrial investment, international investment, sustainability, valuation and capital allowances teams. But the agency is also equipped to deal with much smaller transactions. “We sell right down to $300,000 strata office suites,” he says. “We have a talented team of four professionals concentrating on this part of the market. It is a very successful business for us.” The valuations business also has a middle market business focusing on mortgage and small valuations, as well as its institutional and residential valuations businesses. And the capital allowances business has technology which enables completion of depreciation schedules for residential investment properties. Coster pays tribute to his awardwinning team and says they have responded enthusiastically to CBRE’s emphasis on corporate and social responsibility. Last year, 100 Victorian staff were involved in the 10 km Walk for Wish, with CBRE raising $260,000 nationally for UNICEF, the Starlight Foundation and Beyond Blue. “There is a bit of competition between the offices to see who can make the most money.”


Oc, opo Awards

Residential Property Manager of the Year Dylan Emmett, Lucas Real Estate What makes a great property manager? Resilience, says Dylan Emmett, whose landlords are virtually all investors in high-rise Docklands apartments. “That’s the key to it – maintaining a positive outlook and remembering you are a calming influence when it comes to dealing with clients,” he says. “It is important to recognise that you need to get an outcome for both parties” – even if they see themselves as on different sides. “One of the most important things I ever learned is having a strong sense of yourself and working to your strengths while focusing on delivering the best possible experience to all of your clients,” he says. “People can get a bit caught up in what their competitors are doing and listing. If you have a strong sense of yourself and are committed to customer service, you will be OK.” Emmett, who started in real estate as an 18-year-old straight from school in 1999, has progressed from putting up boards on street corners to the director of property management at Lucas Real Estate, investing in the business two years ago. He had been at Lucas three years after learning the business for nine years at Sweeney Estate Agents in Yarraville where he began as a cadet. “I am a western suburbs boy, I grew up in Altona,” he says, recalling that it was his mother’s connections with the real estate advertisers at the Footscray Mail, where both she and his grandfather worked, which led him to the business. “As an 18-year-old you think it is pretty fancy to put a suit on every day and go to work,” he laughs. Although now a director at Lucas with more than 1000 properties under management and four other property managers, Emmett “does it all”, from his own open for inspections to developing new business.

“We had a big year last year and it was really down to a strong focus on business development,” he says. “We had new client growth of more than 20 per cent last year. But it is also about nurturing our existing clients by our team and doing what we can to maximise and protect our landlords’ investments. The big focus for our team is customer service.” Emmett says his investors range from locals to those from interstate, regional Victoria and overseas. He sees his responsibility as helping them make decisions for the longer term of their investment, not just short-term savings opportunities. “We maintain high levels of communication, if you communicate openly with people and they can get you when they need to, that’s very important.”

‘I am a western suburbs boy, I grew up in Altona ... as an 18-year-old you think it is pretty fancy to put a suit on every day and go to work’

His other key tip for young property managers is, “don’t procrastinate. Dealing with issues in a timely manner is best for all and can avoid greater issues arising in the future”. He believes the days when property management was viewed as a secondrate real estate career are over. “I think what property management allows you to do is expand upon a great number of skills, both inside and outside of real estate. The skills I have learnt as a property manager are now enabling me to build our business from a management position,” he says. “A strong rent roll is the lifeblood of any good real estate business. Ensuring

Be yourself: Dylan Emmett says it’s important to to have a strong sense of self and working to your strengths while delivering the best for all clients.

you have solid systems and processes in place will allow your business to continue to grow. “Traditionally, people thought sales was the way to go and this is now changing – property managers are becoming directors,” Emmett says. The quality of job applicants is also high, with property manager wages having improved and property management offering a valid career with varied paths including portfolio management and business development. And while it was traditionally seen as a female occupation, more men are joining, he says. “Sometimes a distinction is made between sales and property management, but if the people leading the business understand the property management business intimately you get a lot more buy-in from staff,” Emmett says. “Smart agencies recognise that a strong property management team and business is key to their success.” The Estate Agent ❘ June 2015

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Training

Learn and earn CPD points Continuous professional development is a key component of your REIV membership, adding to your professional capabilities and keeping you up-to-date with new developments in the industry. With the last year of the three-year CPD period already well underway, representative and licensed members

are reminded that there are still plenty of opportunities to accrue points. Attendance at REIV’s two-day conference in September is accompanied by 16 CPD points and provides members with a great opportunity to hear from inspirational keynote speakers. In addition to REIV courses and

june

august

Auction

Commercial

24th

9am–5pm

Advanced Auctioneering

Commercial 11th

9am–5pm

Commercial Property - Listing for Lease

18th

9am–5pm

Leasing Commercial Property

26th

9am–5pm

Commercial Property Management Fundamentals

Owners Corporation 15th

9am–5pm

Advanced Owners Corporation

6th

9am–5pm

Intermediate Commercial Property Sales

14th

9am–5pm

Commercial Property Management Fundamentals

28th

9am–5pm

Commercial Property Management Part 2 Lease Admin

Owners Corporation 17th

9am–5pm

Intermediate Owners Corporation

27th

9am–5pm

Advanced Owners Corporation

Property Management

Property Management 10th

1.30pm–5pm

Residential Property Management Refresher

19th

9am–5pm

Preparing for and presenting at VCAT

25th

9am–5pm

Advanced Residential Property Management

Property Sales

5th

9am–12.30pm

Residential Property Management Refresher

21st

9am–5pm

Preparing for and presenting at VCAT

10th–13th

9am–5pm

Job Ready Residential Property Management

1st

1.30pm–5pm

Residential Sales Refresher

Property Sales

22nd–25th

9am–5pm

Job Ready Residential Property Sales

5th

1.30pm–5pm

july

september

Business Broking

Auction

6th–8th

9am–5pm

Job Ready - Business Broking

10th

9am–5pm

Commercial Property Management - Part 2 Lease Admin

17th

9am–5pm

Commercial Property Sales Fundamentals

Commercial

9am–5pm

13th

9am–5pm

Intermediate Residential Property Management

27th

9am–5pm

Advanced Residential Property Management

Introduction to Auctioneering

11th

9am–5pm

Commercial Property - Listing for Lease

24th

9am–5pm

Leasing Commercial Property

17th

9am–5pm

Preparing for and presenting at VCAT

25th

9am–5pm

Intermediate Residential Property Management

30th

9am–5pm

Advanced Residential Property Management

Property Sales

Risk

32

9am–5pm

Property Management Introduction to Owners Corporation

Property Management

20th

3rd

Residential Sales Refresher

Commercial

Owners Corporation 24th

events, members can also obtain CPD points for any external training with a solid real estate focus.

9am–12.30pm

Safety Risks in Estate Agency Practice

The Estate Agent ❘ June 2015

7th–10th

9am–5pm

Job Ready Residential Property Sales


Events

Analysts share their insights 2015 C&I Economic Forecast Lunch This year’s Commercial and Industrial Chapter’s Economic Forecast Lunch will focus on economic analysis, forecasts and strategic planning. The annual event is being held at the Grand Hyatt in Melbourne on July 31 and will feature presentations from economic and financial experts Frank Gelber and Peter Switzer. As the chief economist at BIS Shrapnel for decades, Gelber is a respected forecaster. His presentation will detail prospects for the economy and property markets with emphasis on the mediumterm. His objective is to understand whether activity is sustainable, predict turning points and risk and highlight how market logic will change as circumstances and perceptions evolve. Gelber has been a frequent presenter at the C&I lunch in the past and is known for the accuracy of his predictions. Switzer, one of Australia’s leading business and financial commentators,

Looking ahead: Financial experts Frank Gelber, above, and Peter Switzer, left.

will cover the current economic conditions and what this means for the industry. The award-winning broadcaster will also double as MC for the event.

reiv.com.au – your first source for REIV events in 2015 JUNE 19th

Commercial & Industrial Chapter Breakfast Seminar

A great networking opportunity, the Commercial and Industrial Chapter’s Economic Forecast Lunch is one of the biggest events on the REIV calendar. Tickets are $145 for REIV individual members and $170 for non-members. For more information, please contact Michaela Versteegen on 9205 6633

august 4th

Young Agents Chapter Event

5th

Owners Corporation Chapter Seminar

18th

Bendigo Division meeting

19th

Commercial & Industrial Novice Auctioneers Competition – Heats

september

JULY 2nd

Valuation Chapter Seminar

2nd & 3rd

Australasian Auctioneering Championships

7th

Southern Division Lunch

REIV Annual Conference

22nd

Senior Auctioneering Comp – Final (The Manningham Convention Centre)

2nd & 3rd 17th

Commercial & Industrial Novice Auctioneers Competition Final and Commercial & Industrial Marketing Awards

24th

Gippsland Division Meeting

28th

Geelong Division Meeting

25th

Business Brokers Lunch

31st

Commercial & Industrial Economic Forecast Lunch

29th

Novice Auctioneer’s Competition – Semi-Final

The Estate Agent ❘ June 2015

33


Best Practice

VCAT opinion blow to owners Advisory outcome an unwelcome surprise for landlords and likely to carry weight in negotiations. By REIV Corporate Solicitor Peter Lowenstern In May, VCAT delivered an advisory opinion which may impact on many retail and commercial property landlords.

T

he outcome of the Victorian Small Business Commissioner’s application to VCAT for an advisory opinion about outgoings recoveries in retail and commercial lettings comes as an unwelcome surprise to property owners. In a nutshell, VCAT has said: Essential safety measures (ESM) ❚ If a landlord must attend to a measure, he has to do so and pay for it; however ❚ if a landlord simply has to ensure a measure is attended to, but does not have to do so himself, he and his tenant can agree the tenant will attend to it. The landlord must still pay for it; and ❚ if a landlord has to attend to a measure, whether personally or not, and does not do so and the tenant attends to it and pays, a landlord obligation expense can be deducted. ❚ If the lease is for premises covered by the Retail Leases Act (RLA) – a landlord cannot require a tenant to provide, or maintain, an ESM if it is: part of the structure or a fixture; plant or equipment at the premises; an appliance, fitting or fixture provided under the lease by the landlord relating to gas, electricity, water, drainage or other services. But if an ESM has to be repaired because the tenant has misused it, the landlord may recoup the expense. If a lease obliges, or allows, a tenant to remove an ESM when the term ends, the landlord does not have the responsibility of maintaining it in the condition it was in, when the lease was entered into. ❚ If the lease is for premises covered by the RLA – providing or replacing an ESM is a capital expense. It cannot be offcharged to a tenant. ❚ If an ESM expense is a recoverable

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The Estate Agent ❘ June 2015

‘It is well-reasoned and is very likely to be persuasive and set the scene for commercial letting negotiations in the future’ outgoing permitted by the RLA – the outgoings provision of the lease must conform to section 39 and the requirements of the Retail Leases Regulations (RLR) must be met, if the expense is to be recouped. ❚ Section 251 of the Building Act takes precedence over section 39 of the RLA. RLA section 51: what does “other expenses” mean? ❚ It means expenses arising in the course of providing the legal services mentioned in the section.

RLA section 52: landlord’s ability to recoup maintenance & repairs expenses ❚ They can be recouped if – section 251 of the Building Act does not apply and the Building Regulations oblige a landlord to pay the expense; the  expenses are for things other than those for maintaining – – the structure of, and fixtures in, the premises; and – plant and equipment at the premises; and – appliances, fittings and fixtures provided under the lease by the landlord relating to gas, electricity, water, drainage or other services in a condition consistent with the condition of the premises when the lease was entered into. n ot a capital expense; t he outgoings recovery clause in the lease complies with the RLA; and t he RLR requirements are met. The ramifications of the limitation of the recovery of outgoings expenses for building maintenance obligations are yet to be fully appreciated. What is the effect of the opinion? It is purely advisory and is not binding on property owners. Nor is it binding in other courts, in particular the Victorian Supreme Court. Nevertheless, it is well-reasoned and is very likely to be persuasive and set the scene for commercial letting negotiations in the future. What lies ahead? As the practical impact of the opinion on the day-to-day business of letting and managing premises controlled by the RLA become evident, the need for a thorough revision of the outgoings recoveries provisions of the legislation is likely to be required.


Styling

First impressions: Stylists can move new furniture into a home to help buyers appreciate how it could look.

Styling has substance Gone are the days of simply tidying the house and cleaning the windows. Today, stylists are important in preparing a home for sale

P

reparing a house for sale used to mean encouraging clients to clean the windows, tidy the house and mow the lawns. Now, with websites displaying multiple photographs and videos of sale homes and buyers attuned to reality TVstandard presentation, styling for sale is the new normal. Agents are unanimous this not only shifts homes faster, with high standard, well-presented listings boosting their brand, a well-styled home means a higher price. But they also recognise

the dangers of presenting what looks like a display home and say it is about more than changing the furniture. “Does it have an impact on price? One-hundred per cent it does,” says Tim Heavyside, Fletcher’s director and chair of REIV’s residential sales chapter. He is so convinced of this he pays for his clients’ initial styling consultation with stylist Kelly Dixon, of Home Creations, who prepares a report for the vendor. “I am very happy to pay – it is better off for the client and a branding

exercise for me because vendors look at houses I market and think, ‘Tim Heavyside sells nice houses’ and I do. That’s part of my branding, but the big reason is you get a better price because the house is professionally styled.” Heavyside says styling a vacant property can be challenging “because there is no human element in it, for example no clothes in the cupboard”. And sometimes the property is unattractive with little to offer. “It’s still worthwhile doing it,” he says. Continued on page 36

The Estate Agent ❘ June 2015

35


Styling

Looking good: Jeremy Rosens, REIV’s 2014 residential sales person of the year (principal), says styling for sale has become the new norm.

Continued from page 35

“The thing that happens regularly is people not only buy the house, they buy the furniture.” Heavyside says styling can range from helping the owners rearrange furniture to a partial style costing about $1000 to $3000 to storing the owners’ belongings and restyling for about $3000 to $10,000. “Does it add value? Absolutely and unequivocally,” says Paul Caine, principal of East Melbourne-based Caine Real Estate. He says presentation comprises at least 30 per cent of the result, perhaps up to 50 per cent. Caine tells of a small studio, just 30 sq m including bathroom and laundry, offered vacant before Christmas by an owner unwilling to pay for styling. But buyers could not envisage living there, so in midJanuary, the price already discounted by $20,000 to $380,000, Caine warned the owner a further drop may be needed. Or, he could try spending $2000 on styling. “It was sold within seven days,” he says. “We reinvited the same people who had been previously. Four days in, one said, ‘I cannot believe it, how easy is this?’. She paid the full $400,000. The thing that styling did was it gave people a vision of how people could live there.” Jeremy Rosens, REIV’s 2014 residential sales person of the year (principal), says styling for sale has become the norm in Melbourne. “There is an expectation of a high standard of presentation when people attend open homes,” he says. “People want information quickly. If you lose their attention for a minute there are enough houses for them to look at another one. So much now is about lifestyle as opposed to price.” “Using a professional stylist will make a difference to the price of a home unless they style it beautifully themselves,” says Rosens, a Gary Peer 36

The Estate Agent ❘ June 2015

and Associates partner who heads its St Kilda office. “But home owners often find it difficult to see their property through buyers’ eyes. “Emotional attachment makes it difficult to see their own home dispassionately.”

‘Our philosophy is to make a space feel warm like a home, not just some furniture put in a room’  – Stylist Melissa Gries Rosens, who works with Melissa Gries and her team at Zenza, says it is more than decluttering and changing furniture. “We talk about the demographic of the buyer and what we think the area is used to,” he says. “It’s about trying to set the scene, it’s about creating a whole lifestyle.” Melbourne now has many property styling companies, but Rosen says not all understand what is needed and buyers should be wary of cheap

makeover offers. “You end up with properties that look like a soulless offering.” So most agencies have a relationship with stylists they have found best serve their needs. Gries, who has four full-time designers, a logistics team and more than $1 million worth of furniture in her Cheltenham warehouse, says styling “creates an emotional response when people are walking through a property”. The stylist must take into account budget, the property style, target demographic and the style of the area. “For example, are they looking for more bedrooms, would we get more if we converted that study to a bedroom or the other way around. These are factors that can make a big difference,” she says. “Our philosophy is to make a space feel warm and like a home, not just some furniture put in a room. A lot of styling companies will leave your property looking like a Quest apartment.”


Styling

Neat as a pin: De-cluttering and replacing with fresh new furniture can be a winning touch for vendors at a small cost.

When Kim Hallis, principal of Create Expectations, began styling more than 15 years ago she worked mostly with apartment developers. Now, poor styling means lower buyer expectations, she says. “I think people believe that if they (the vendors) don’t put any effort into a property they are going to get it cheaper,” says Hallis, who works with Jellis Craig, Kay and Burton, Marshall White and RT Edgar. She says most sellers are open to a stylist’s visit. “Even if they don’t want anything done, they are happy to take a bit of advice.” But those sellers who will not take advice can be challenging for the agent, even raising the issue of whether to take the listing. “They are driving the business, this is their property, you are always mindful of that,” Rosens says. “It is a delicate situation – basically you are telling them their stuff is no good and they have to get other stuff. They don’t look at it as an investment in the outcome. I tell them, you have employed me as your selling agent to give you the best advice and sell for the best selling price.” Rosen says styling a small house cost about $5000, up to $9000-$10,000 for a larger house. Services range from adding finishing touches to advice on de-cluttering and moving furniture to top to toe changes. Caine says a professional can enter a room and know what needs doing. He offers three levels: a $150 walk-through, a stylist to deal with

properties up to $1 million, another for those $1 million-$10 million, including antiques. He offers owners a few tips from a stylist. If more is needed, stylists have developed the skill of conveying that, he says. Those who resist? “I think if you approach them and treat them like you would like to be treated, with respect, and say, we would like to get you as much as we can.”

‘You have to be part stylist and part psychologist in this. It is people’s biggest asset or maybe someone has died ... most clients are open to doing something’ – Stylist Melissa Gries But if they refuse, “it is not often that we have met such resistance but you would probably be inclined to walk away,” Caine says. “They have invited us in as professionals, we have given them our professional advice, if they could not latch on to that maybe other things won’t work as well.” Heavyside says it can be important to “desensitise” homes packed with clutter, photographs and trophies. “People are very good at picking up the vibes of a property, they buy a lot on emotion and feeling,” he says. Heavyside says of vendors resistant to styling, “you have to be discerning, sometimes decisive. You have to be sympathetic and sensitive.”

He tells vendors little stories – for example, of the home which repelled buyers because the first viewer stood in dog poo in the backyard and walked that through the house. Hallis specialises in “adding on” to vendors’ belongings. “I am a bit older and can relate to those people who are selling their house that they have had for 30 years and the kids have left home. “It is quite challenging for some people so we are very gentle. My philosophy is to try to make it look like you have not been there. “I don’t believe in stripping out every photo, I like to use as many of their things as possible. “I think it can go too far. To style a home and keep it a home you have to try and retain as many pieces as possible without getting that styled look.” It is also important to be realistic. For example, styling a small apartment to look bigger but leaving out a television will have buyers asking, ‘But where will I put the TV?’, Hallis says. Gries says stylists are used to dealing with people in a very emotional state. “You have to be part stylist and part psychologist in this. It is people’s biggest asset or maybe someone has died,” she says. Gries operates mostly in the $1 million-plus market. “We don’t have a lot of clients who don’t want to do anything. Most clients are open to doing something, but a lot of clients find the whole process overwhelming,” she says. “We are an independent party, the agent does not have to tell them all these things, it can come from someone else and the agent can concentrate on selling the property. “Their relationship can be based on the selling of the house and our relationship is based on the presentation of the house.” The Estate Agent ❘ June 2015

37


Obituary

A fair man and true to his word Russell Leggo, the man behind the high-profile brand, built up a highly successful business and lifelong friendships

A

ustralian real estate pioneer Russell Leggo, one of the founders of what has become a franchised network of more than 70 real estate agencies across Victoria and New South Wales with more than 1000 staff, has died aged 85. In 1955, Leggo joined Ian Stockdale at the Glenhuntly agency Stockdale’s father had founded pre-war, rebranding it Stockdale & Leggo – a name which continues today. It became one of the first Victorian agencies with multiple branches. “It is a testament to Russell that the name Stockdale & Leggo has been so strong and has survived,” says Stockdale & Leggo CEO Peter Thomas, who worked with Leggo for many years and was the company’s first franchisee. “He was a very fair man. I would say Russell Leggo is one of the finest people I have ever met in real estate. He was not a man to go behind anyone’s back, he was very straight down the line.” Thomas said Leggo expanded his agency in a way few companies were doing at that time. “He followed the growth corridor and grew from the inner city to the growth suburbs such as Mount Waverley and Glen Waverley,” he said. “I think Russell was very good at employing the right people, the right managers to set up in the growth areas and backing them up with very good business acumen.” Thomas paid tribute to Leggo calling him “a straight shooter, a very clever businessman and very fair. He was a lovely man, good at property and just a gentleman. Nobody could ever say that Russell Leggo tried to shaft them, he was just a very fair person.” Real estate was, for Leggo, a passion which began as a young boy while “wheeling and dealing” playing his favourite game, Monopoly, his

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The Estate Agent ❘ June 2015

James Russell Leggo August 2, 1929 – March 9, 2015 daughter Jane Kiel says. After attending Scotch College he began his property industry career at Baillieu Allard, now Baillieu Knight Frank, completing real estate and valuation qualifications at night school. Leggo, who joined the REIV in 1961, worked in residential and commercial sales.

‘Russell was very good at employing the right people, the right managers to set up in the growth areas and backing them with very good business acumen’ – Stockdale & Leggo CEO Peter Thomas Kiel says he was one of the most respected agents of the time and many of those working in the industry today began their careers under his guidance. “His success was due to hard work, diligence, his great honesty and integrity,” she says. Thomas says Leggo was well-liked

by his staff and treated everyone with respect. “If Russell said he would do something he always followed through and if he said he would sell you something for a certain price it would never change. He was not a high flyer, he was down-to-earth.” Geoff Sutherland, who received the REIV President’s award last year, worked with Leggo for 20 years having worked together at Baillieu Allard for two-and-a-half years and then joining him at Stockdale & Leggo. He said Leggo devoted most of his working life to building the agency and had a strong commitment to it. Stockdale and Leggo was sold to Younghusband and Co, a subsidiary of Elders Pty Ltd in 1969. But Leggo remained working there and a few years later was the major shareholder when it was repurchased. In 1986, he sold the then sevenoffice company to Thomas, who had set up its Dandenong franchise in 1981 and later its Frankston franchise. Kiel says Leggo then began his own business buying, selling and consulting for vendors and purchasers on commercial and residential properties throughout Melbourne. Leggo married Elizabeth (Liz) Daley in 1954 and Kiel says, apart from his late wife and their three children, his other great love was his weekend country property and his charity work, in particular his involvement with Rotary. “He dedicated a huge amount of time to Rotary and was awarded the honour of the Paul Harris Fellow (acknowledging contributions to the Rotary Foundation) twice for his involvement, time and generosity,” she says. He was also a member of the Victoria Golf Club for 61 years and the club published a tribute notice following his death. Leggo is survived by his daughters Jane and Sue, his son Richard and his 10 grandchildren.


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The Real Estate Institute of Victoria has been the peak professional association for the Victorian real estate industry since 1936.

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The Estate Agent ❘ June 2015

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The Estate Agent - June 2015  

The Estate Agent is the official publication of the Real Estate Institute of Victoria Ltd.

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