Issuu

AUSTRALIAN

Conveyancer. THE PRACTITIONER’S COMPANION

2040

WELCOME TO TOMORROW LAND FUTURE OF HOUSING REPORT

# 5 • JA N UA RY 2 0 2 4

Q the burning questions

2 •

It’s a skinny margin

Industry leaders have suggested that one of the biggest issues confronting conveyancing practitioners is business profitability. Bluntly, they say operators do not charge enough for their services. Advisers suggest that the public doesn’t fully appreciate the complexity and importance of the conveyancing process and that there’s a propensity to cut rates to win business in a competitive environment. It appears to be stifling growth for many, so we ask:

Do you charge what you believe you are worth or are you being forced to undercut fees just to stay in the game? Do you think conveyancers should take a percentage of the property sale price, just as real estate agents do?

© Copyright 2023 triSearch Services Pty Ltd. triSearch and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) of this publication including all data, information, images, commentary and content (content). All rights reserved.

Jennie Tonner Director, licensed conveyancer Cremorne Conveyancing No, we don’t charge what we are worth. I have been in this industry for 35-plus years and where conveyancers and law firms were once the first point of contact for consumers when selling and purchasing property, we are now the last. People once understood the importance of legal review and sign off and the need to minimise their risk and protect their asset when purchasing such a large asset. Now, it seems that we are a box that must be ticked. Our worth seems to be based on what we seem to be able to charge against what other industries charge for a conveyance. Selling agents who earn up to 2 per cent or more on the sale price, mortgage brokers who earn a high fee and then a trail for the life of the loan and even buyers’ agents who only need to do a six-week course yet can charge up to $25,000 or more on a conveyance. Note – none of these industries take the risk that the conveyancer and law firms must take on. When the Law Society abolished the sliding scale that legal firms charge on a conveyance, the value of our work and knowledge and experience went with it. The fixed fee that we are currently stuck on is outdated and has not moved with the rate of price increases. As a result, we must try to take on more and more matters to keep running and as a result, the risk on us is higher now than ever. Every time I have attempted to raise my fees, I lose work and have had to stick to the same fee that I have

A U S T R A L I A N C O N V E YA N C E R • 3

had over 10 years. Yet, my rent has gone up, my wages have gone up, my professional indemnity insurance has significantly risen, my utilities have gone up, prepurchase inspections have gone up, statutory searches have substantially gone up and this is passed through to the customer who has to pay. We try to increase our fee – never going to happen!!! Yet, the biggest risk for a client on a sale and purchase is in the legal documents and the protection that we can provide them. For the past two years, I have been running my business at a loss rather than a profit of any kind. I have had to let go of staff, reduce staff hours, and cut costs in my private life in order to make ends meet. I have had to take out a business line of credit to keep the business going. The stress of this is overwhelming at times and now the job I once loved doing is like a ball and chain around my neck. Should conveyancers take a percentage of the property sale price, just as real estate agents do? Yes, but I also think the percentage that agents charge needs to be reassessed to a more realistic amount.

competition, I believe in maintaining a pricing structure that reflects the value of my legal expertise. The client’s interests must always be paramount, and it’s essential that we are properly remunerated to ensure we can provide high-quality service without compromising on integrity and diligence. I do not agree it is necessary for lawyers or conveyancers to charge a percentage of the property sale price, akin to real estate agents. Instead, fees should be based on the complexity and scope of the work required. Expensive properties often involve more intricate transactions, but the fees should reflect the effort and expertise involved rather than a percentage of the sale price.

THIS EDITION ’TIS THE SEASON FOR BUYING Rising living costs have poured cold water on many things in the past year, but it seems the property market is hot for first-home buyers in NSW.

Data Dashboard: PAGE 4

LIVING IN TOMORROW LAND This month’s Spotlight report provides an outlook on home ownership for the next generation. • Living in the 2040s • The family unit of the future • Property needs in 2040 • Home price predictions • How our cities rank on the global home affordability scale

14-page report: PAGE 6

DOTTING Is, CROSSING Ts

Ally Xiong Licensed conveyancer Dott & Crossitt Solicitors

Solon Hu Principal solicitor Royer Mace Lawyers Fortunately, I charge a fee that aligns with my experience and the quality of legal services I provide. While there may be external pressures to undercut fees due to

I believe that conveyancing is a service that requires specific legal knowledge and expertise, so the fee should be based on the value of the service, not the value of the property. Our firm recently represented a prestigious house owner whose property was worth over $26 million. We charged them a reasonable fee that reflected the value of our services. Our commitment is to assist individuals, companies, investors, and developers in achieving their property goals.

Conveyancing firm Dott and Crossitt has made its mark in the industry with a no-nonsense approach to property transactions. We talk to principal solicitor and founder Jared Zac.

Page 20

PROFIT PLANNING Efficiency, profitability, and long-term success does not happen by accident. It requires strategy and commitment to the end game.

Page 24

data dashboard

4 •

The recurring property dream as buyers follow their ‘north star’ Oakville

Hottest suburbs The NSW suburbs where the most property was bought in December 2023. POSTCODE

SUBURB

2765

Oakville

2155

Kellyville

2259

Wyong

2148

Blacktown

2170

Liverpool

NSW

First-home buyer activity

It was somewhat of a recurring theme in the NSW property market last month. An increasing number of home buyers sought space, and presumable price comfort, away from Sydney’s centre, property sales data has revealed. Depending on the day and the time, you could spend at least an hour in the car to reach any of the suburbs listed in the Top 10 of sales recorded by triSearch in December. Suburbs between 40 kilometres and 50 kilometres north-west of the Harbour Bridge topped the rankings. For the second month running, Oakville in the Hawkesbury region was the most favoured spot for investors. Australian TV trivial buffs will recognise Oakville for the fictional Wandin Valley hospital in Channel 7’s beloved A Country Practice. But its most likely home buyers last month were drawn by its peaceful rural settings.

How many first-home buyers entered the market in December 2023, compared to same time last year.

Locations dotted along the F1 motorway north of Sydney – Wyong, Gosford and The Entrance – were also proven drawcards for buyers in December. It was the first time the latter had made it to the Top 10 rankings in 2023. There is value and quality of life to be had in the market. It was clear first-home buyers were feeling the energy in December. There was a 6 per cent increase in the number of purchasers entering the market for the time last month. And despite what some might think is a slower period for property purchases, homes for sale were on the market an average of four days less than they were for the corresponding month of 2022. The heat is still on this summer.

2145

Westmead

2261

The Entrance

2250

Gosford

2570

Camden

2560 Campbelltown

The average time a property spends in market before being sold, compared to the same time lastyear.

DAYS

57.5

December 2022

70%

2022

2023

24%

Percentage of all properties sales recorded by triSearch. Existing home owner

30%

First home buyer

Overseas investment Which countries invested in the Australian property market for the first time in December 2023.

1. Nepal

4.29%

2. India

4.16% 3.25%

3. China

2.86%

4. New Zealand

1.69%

5. Philippines 6. South Korea

Time on Market

December 2023

76%

1.17%

7. United Kingdom

0.65%

8. Vietnam

0.65%

9. Bangladesh

0.39%

10. Indonesia

0.13%

A U S T R A L I A N C O N V E YA N C E R • 5

Top of the town on top of the home sales list

Great Queensland neighbours generate property interest

VICTORIA

QUEENSLAND

The centre of Melbourne comes alive this time of year every; think Boxing Day cricket Tests, the Australian Open tennis and headlining entertainment. But in December 2023, the Victorian capital’s heart was pounding loudly with home buyers flocking to the area is strong numbers. Property in the CBD became hot ticket items for the second month – Melbourne city, and its next-door neighbour, South Yarra topped the sales list. It appears purchases continue the passion for the urban lifestyle, the food, the entertainment, and the sport those areas have to offer. But buyers generally were not afraid to make distinctly different choices for living. The semi-rural and park-like area of Werribee, some 32 kilometres from the hallowed turf of the MCG was also extremely popular with property investors. Werribee jumped a few spots on the real estate sales ladder to take the number four slot.

Doncaster

Melbourne St Kilda

Chadstone

Brighton

Hottest suburbs The Victorian suburbs where the most property was bought in December 2023 POSTCODE

SUBURB

3000

Melbourne

3141

South Yarra

3029

Tarneit

3030

Werribee

3978

Clyde North

3121

Richmond

3006

Southbank

3931

Mornington

3073

Reservoir

3844

Traralgon

Caboolture

It takes roughly six minutes to drive from Caboolture to Morayfield. The first is known for its diversity in lifestyle and scenic attractions. The second is known for its retail strength. Together, these suburbs 45 kilometres north of Brisbane’s CBD, topped the home sales list for Queenslanders in December 2023. Buyers appear to have sought value for money and convenience is their purchase decisions. But North Queensland was also a hot spot last month. Kirwan, within the Townsville city boundaries was the third most popular suburb for purchasers. While Kirwan is well known as the home of the National Rugby League team, The North Queensland Cowboys, it also gets a good review for its amenities and convenient location. Online reviews describe the suburb as a place boasting “friendly locals, beautiful parks, and excellent restaurants. In a prosperous town like Townsville the area may find its way to the top selling list for some time.

Morayfield

Beachmere

Burpengary

Hottest suburbs The Queensland suburbs where the most property was bought in December 2023 POSTCODE

SUBURB

4510

Caboolture

4506

Morayfield

4817

Kirwan

4505

Burpengary

4509

North Lakes

4217

Surfers Paradise

4301

Redbank Plains

4306

Ripley

4504

Narangba

4209

Pimpana

Disclaimers - The content provided in this publication is of a general nature and does not take into account future market conditions or your individual circumstances. You should exercise your own skill and judgment when considering investment decisions and seek professional advice where appropriate. While triSearch uses commercially reasonable efforts to ensure the content contained in this publication is current, triSearch does not warrant the accuracy, currency or completeness of the content and to the full extent permitted by law excludes all loss or damage howsoever arising (including through negligence) in connection with this publication.

6 •

spotlight

WELCOME TO TOMORROW LAND

Socio-economic forces and the environmental issues at play now will determine the things we will live with in 20 years’ time. Flying cars? Maybe. Scientists and futurists map it all out.

BY SAM McKEITH A Sydney-based freelance journalist, Sam has contributed to a range of leading Australian and international media outlets including the Australian Financial Review, Reuters and Bloomberg.

A U S T R A L I A N C O N V E YA N C E R • 7

onsidering the future of household living it’s tempting to think of a far-fetched “Jetsons” future when, in reality, the long-term outlook is likely to be nothing like science fiction. That’s the message from Morris Misel, an Australia business futurist who works with major property sector clients on long-term forecasts. Misel says, in his view, many of today’s macro household trends will continue to the 2040s. For instance, he points to housing scarcity as a big trend likely here to stay, identifying the main drivers of a shortfall as strong population growth and limited housing stock. By 2040, there will be about 13 million homes in Australia, up from around 11 million currently, while the population will lift to around 36 million, up from 26 million, Misel says. “That’s what we’re headed towards, a whole lot more people and I don’t think significantly more homes, I know two million sounds like a lot but it’s not because we haven’t caught up with what we need for today,” Misel tells Australian Conveyancer. “This household scarcity that we now face, we’re going to face it in 20 years too. I don’t believe we will have resolved it then. I really hope I’m wrong but I just don’t.” On the details of household living, Misel says most changes will be to home interiors. As he puts it: “primarily we’re still living in the same four walls” but “a lot of the differences will be inside the home”, highlighting the impact of smart tech that will help run homes. Homes will also be more compact and integrate different building materials. “I think we will see more compact homes as we try to squeeze more people into places and those houses will be built using different building materials,” he explains. “Eco-friendly, for sure, and we’re inventing a whole lot of new stuff like self-healing cement and 3D printing, which is really in its infancy in building. There’s also incredible steel that you can see actually through, it’s embryonic stuff.” There will also be a return to more use of natural materials, the futurist predicts. “It’s going back to wood and old-fashioned materials but in new ways … we will see a lot more of that coming in.”

Australian business futurist Morris Misel.

8 • SPOTLIGHT

THE FUTURE OF HOUSING

PRICE CLIMB CONTINUES TO 2030 “More and more people are going to live in townhouses, but if you come back in 10 years time and look through Sydney, you won’t recognise it.” Michael Yardney

hile there’s an abundance of data tracking and forecasting of near-term home prices in Australia, reliable long-term price predictions are harder to come by. That’s where property investment expert Michael Yardney comes in. Yardney, founder of buyer’s agent Metropole Property Strategists and a veteran property market expert, has mapped home price predications across Australia through to 2030. He predicts the average annual growth rate for “well-located capital city properties” is about 7 per cent, which means Australia’s median dwelling price to be around $1.1 million in 2030. In Melbourne, he tips prices to reach $1.5 million in 2030 for houses and $985,000 for units, while in Sydney his forecast is for $1.8 million for houses and $1.26 million for units. He tells Australian Conveyancer that over the long term the main driver buoying prices will be “continued strong population growth”. Property investor Michael Yardney.

“The Australian government has a business plan to grow our population to 40 million people by the middle of this decade, it’s wanting to replace the Baby Boomers who are retiring in the workforce,” Yardney explains. “It’s a combination of millennials moving into family formation stage” and “more people coming from overseas,” he says, regarding the sources of future population growth. “If we believe that Australia’s economy is going to remain strong and people are still going to have more knowledge-based work then the combination of the ability to pay – the wealth of the nation – plus more of us is going to drive up house prices. “Between now and then, significant factors are things like interest rates, government incentives, lending capacity, and unemployment.” While there is a sense that the past few decades have been particularly good for property, he says these factors are key for the future. That’s especially the case on future migration levels related to overseas students. “These students are in many ways driving our universities and economy and paying a lot of money … Immigration will slow a bit but it’s not going to stop; it hasn’t for 200 years.” On price differences within capital cities Yardney says “markets will be very fragmented”. Price growth will be strong for investment-grade property and well-located townhouses on large blocks. These types of properties will be in strong demand by many first-home buyers otherwise priced out of the market, he says. “Some areas will do better than others and some locations will outperform others. “More and more people are going to live in townhouses (but) if you come back in 10-years-time and look through Sydney you won’t recognise it.”

A U S T R A L I A N C O N V E YA N C E R • 9

2030 $1,800,000

SCRATCHING THE SEVEN YEAR ITCH How capital city homes and units will fare for investors by 2030 (median prices, state by state).

2030 $1,500,000

2023 $1,210,000

2030 $1,200,000 2030 $1,000,000

2023 $695,000

2030 $700,000

2023 $767,000

2023 $490,000

2023 $436,000

HOUSES

UNITS

ADELAIDE

2030 $750,000

HOUSES

UNITS

BRISBANE

2023 $897,000

2030 $850,000

2023 $587,000

2030 $1,260,000

2030 $985,000 2023 $770,000 2023 $585,000

2030 $560,000 2023 $406,000

HOUSES

UNITS

PERTH

HOUSES

UNITS

MELBOURNE

HOUSES

UNITS

SYDNEY

10 • SPOTLIGHT

THE FUTURE OF HOUSING

THE BUYING POWER YOU NEED

“Affordability from a mortgage servicing and rental perspective have worsened amid high interest rates and record-low vacancy rates.” Tim Lawless

ith Australia’s median property value now standing at a record high of $848,706, house hunters need to earn more than ever before to get a foot on the property ladder. According to latest data from finance comparison site Canstar, obtained by Australian Conveyancer, house hunters nationwide must now earn $166,215 to buy a typical home. On a city-by-city basis, Sydney is where high earning capacity is most essential, with an annual gross household income of $238,399 needed to generate sufficient borrowing power to buy an average home in the city, valued at $1,217,308 without suffering mortgage stress. Canberra, the nation’s capital was second on the list with a household income of $185,262 required to service loans for a median-priced home of $946,022. Melbourne households need to be earning $175,739 (gross) to secure their homes with a median of $897,222, according to Canstar. This is followed by Brisbane, where a household must earn $150,370 for a purchase on a median-priced house valued at $767,781, and Perth where earnings of $114,998 are needed to secure a house at the median price of $587,274.. Sydney also leads the way on units, with earnings of $150,770 needed to purchase a median-priced unit of $769,773 and avoid mortgage stress. This was followed by Canberra with pre-tax household income of $116,839 needed for units at the median price of $596,564; and Melbourne where a house hunter needs earnings of $114,638 for a unit valued at the median price of $585,366. The Canstar data is backed up by new research

from housing advocacy group PowerHousing Australia. The data, released in December, shows that housing affordability has deteriorated dramatically through 2023. It found that nationwide a borrower buying a median-priced home with a 20 per cent deposit must spend 45.5 per cent of their gross income on annual principal and interest mortgage repayments. In Sydney, where households need to dedicate the largest portion of household income to purchase the median-priced dwelling, it found 56.7 per cent of earnings was needed. “While the ratio of housing values to household incomes has improved a little from the earlier record highs, affordability from a mortgage servicing and rental perspective have worsened amid high interest rates and record-low vacancy rates,” said Tim Lawless, Asia–Pacific research director at property data firm CoreLogic, which put together the data. Matt King, from Housing Power Australia says while he hopes overseas migration will moderate and take some pressure off house prices, it appeared there was no let-up in sight. “To put it into perspective, in 202223, there were only 174,396 dwellings completed in Australia, which grates against the census household composition requiring at least 200,000 per year to cater for the net overseas migration,” King said. The Reserve Bank of Australia declined to comment on whether it was concerned about increased earning pressures on Australians needed to get into the housing market, but referred Australian Conveyancer to recent comments from central bank governor Michelle Bullock citing rising house prices as a factor for hiking rates in November.

A U S T R A L I A N C O N V E YA N C E R • 1 1

MEDIAN VALUE

$1,217,308

MEDIAN PROPERTY VALUES Median prices from March 2023. Deposit at 20 per cent of home value. Monthly repayment assumes principal and interest loan repayments made over 30 years with a variable rate of 5.94 per cent. Source: canstar.com.au

MEDIAN VALUE

$946,022

$897,222

MONTHLY REPAYMENT

$5,958

MEDIAN VALUE

$694,653 MEDIAN VALUE

$585,836

$2,867

ANNUAL INCOME REQUIRED

$114,718

$767,781 MONTHLY REPAYMENT

$4,392

$587,274

MONTHLY REPAYMENT

$2,874

ANNUAL INCOME REQUIRED

$3,400

ANNUAL INCOME REQUIRED

$136,045

MONTHLY REPAYMENT

$3,426

ANNUAL INCOME REQUIRED

$137,086

MONTHLY REPAYMENT

$3,758

ANNUAL INCOME REQUIRED

$175,739

MONTHLY REPAYMENT

$4,630

ANNUAL INCOME REQUIRED

$185,262

ANNUAL INCOME REQUIRED

$150,370

$114,998

DEPOSIT REQUIRED

$138,931

$139,992

$153,556

DARWIN

PERTH

ADELAIDE

HOBART

BRISBANE

$117,167

$238,399

$699,959

MEDIAN VALUE

MONTHLY REPAYMENT MONTHLY REPAYMENT

MEDIAN VALUE

ANNUAL INCOME REQUIRED

$117,455

DEPOSIT REQUIRED

$179,444

DEPOSIT REQUIRED

$243,462

$189,204

MELBOURNE CANBERRA

SYDNEY

12 • SPOTLIGHT

THE FUTURE OF HOUSING

AUSTRALIA: BEAUTIFUL BUT EXPENSIVE

I “Australia’s major housing markets have had especially severe housing affordability losses.” Wendell Cox

t’s little wonder housing affordability in Australia is an increasingly prominent issue, with two state capitals now among the 10 most expensive cities in the world in which to buy property. The 2023 Demographia International Housing Affordability Scheme report, compiled by Canadian think tank The Frontier Centre for Public Policy, ranked Sydney as the second most unaffordable place globally to purchase a home, with Melbourne taking fifth spot. According to the research, the only city more unaffordable than Sydney for housing was the Asian financial hub of Hong Kong, where property cost around 18 times the average salary. In Sydney a median multiple of 13 was needed, while in Melbourne the multiple was 10. All five of Australia’s major housing markets – Sydney, Melbourne, Adelaide, Perth and Brisbane – have been severely unaffordable since the early 2000s, the report found. “Australia’s major housing markets have had especially severe housing affordability losses,” says the report’s author, Wendell Cox. “In each of these five housing markets, the house price inflation since 2000 exceeded that of all of the product groups constituting the Consumer Price Index such as food, clothing, transportation and education and health.” Looking ahead, a key report from The Urban Land Institute, an international non-profit research and education body, predicts housing will get even more expensive in Australia. “In the coming years, the housing situation for lowto-middle income Australians is expected to worsen,” the organisation’s 2023 Asia Pacific Home Attainability Index report says. “A rebound in inbound migration of wealthy individuals and skilled workers, such as medical

professionals who are generally well paid, will create more demand for housing and crowd out low-to-middleincome Australians unless a substantial surge occurs in the supply of new homes that target low-to-middleincome families,” it predicts. It notes that some capital city price relief may come from governments promoting higher-density apartment units over the years ahead as well as demographic trends started during the COVID-19 pandemic such as people “looking for more space who are able to work remotely migrating from Sydney to smaller regional cities”. While this may be good for city prices, it is likely to shift the burden to create “a housing shortage in the regional cities, worsening home attainability for the existing residents”.

HOW AFFORDABILITY RANKING WORKS Demographia International Housing Affordability rates middle-income housing affordability in 94 major housing markets in eight nations: Australia, Canada, China, Ireland, New Zealand, Singapore, the United Kingdom and the United States. Measurement uses a median multiple – the median house price divided by the gross medium household income (pre-tax). The Housing affordability ratings are shown as: • Median Multiple 3.0 & Under: Affordable • Median Multiple 3.1 to 4.0: Moderately Unaffordable • Median Multiple 4.1 to 5.0: Seriously Unaffordable • Median Multiple 5.1 & Over: Severely Unaffordable.

A U S T R A L I A N C O N V E YA N C E R • 1 3

HOUSING MARKETS RANKED BY AFFORDABILITY

Most affordable to least affordable and median multiple (median house price/median household income) 1 Pittsburgh 2 Rochester 3 Cleveland 3 St. Louis 5 Cincinnati 5 Oklahoma City 7 Buffalo 8 Detroit 9 Louisville 9 Tulsa 11 Edmonton 11 Hartford 11 Kansas City 14 Columbus 14 Grand Rapids 14 Indianapolis 14 Minneapolis-St. Paul 14 Philadelphia 19 Glasgow 19 Chicago 21 Blackpool & Lancashire 21 Calgary 21 Baltimore 21 Virginia Beach-Norfolk

3.1 3.2 3.5 3.5 3.6 3.6 3.7 3.8 3.9 3.9 4.0 4.0 4.0 4.1 4.1 4.1 4.1 4.1 4.2 4.2 4.3 4.3 4.3 4.3

25 Newcastle 25 Sheffield 27 Atlanta 28 Middlesbrough & Durham 28 Houston 28 Memphis 28 New Orleans 32 Liverpool 32 Birmingham 34 Edinburgh 34 Stoke on Tr./Staffordshire 34 Dallas-Fort Worth 34 Richmond 34 San Antonio 39 Washington 39 Leeds 39 Derby & Derbyshire 43 Dublin 43 Hull & Humber 43 Raleigh 46 Ottawa-Gatineau 47 Singapore 47 Nottingham 47 Nashville

4.4 4.4 4.5 4.7 4.7 4.7 4.7 4.8 4.8 4.9 4.9 4.9 4.9 4.9 5.0 5.0 5.0 5.1 5.1 5.1 5.2 5.3 5.3 5.3

50 Perth 50 Montreal 50 Warrington & Cheshire 50 Charlotte 54 Greater Manchester 54 Jacksonville 56 West Midlands 57 Providence 58 Austin 58 Tucson 60 Phoenix 60 Sacramento 62 Fresno 62 Tampa-St. Petersburg, 64 Leicester & Leicestershire 64 Orlando 66 Northampton 67 Swindon 68 Boston 68 Salt Lake City 70 Portland, 71 Las Vegas 71 Seattle 73 Plymouth & Devon

5.4 5.4 5.4 5.4 5.5 5.5 5.7 5.8 5.9 5.9 6.0 6.0 6.1 6.1 6.2 6.2 6.4 6.5 6.6 6.6 6.7 6.9 6.9 7.0

73 Denver, 73 Riverside-San Bern. 76 New York 77 London Exurbs 78 Brisbane 79 Bristol-Bath 80 Bournemouth & Dorsett 81 Adelaide 82 Miami 83 Greater London 84 San Diego 85 Toronto 86 Melbourne 87 San Francisco 88 Auckland 89 Los Angeles 90 San Jose 91 Honolulu 92 Vancouver 93 Sydney 94 Hong Kong

7.0 7.0 7.1 7.3 7.4 7.5 8.0 8.2 8.5 8.7 9.4 9.5 9.9 10.7 10.8 11.3 11.5 11.8 5.2 13.3 18.8

14 • SPOTLIGHT

THE FUTURE OF HOUSING

THE FAMILY HOME “The numbers and shares of singleadult and single-parent households are expected to increase significantly, as is the number of couples without children.” OECD report

ince the 1960s the idea of the typical family has been transformed in line with major social and cultural shifts in Australia, and that’s likely to continue to evolve in the next decade. Among key changes in Australia, the traditional two-parent family has declined as divorce rates, re-marriages, cohabitation, single parenthood and same-sex partnerships have risen. More migration, multi-culturalism and an increase in intercultural families have also played a part in altering the concept of family in Australia. In terms of what the next 10 years has in store, the OECD, in a landmark study, predicts that the period ahead will likely to see a continuation, and even acceleration, of the changes in household and family structures already underway. “In particular, the numbers and shares of single-adult and single-parent households are expected to increase significantly, as is the number of couples without children,” the report states, adding that the shift towards households where a woman works will also continue. The Australian Bureau of Statistics, in its latest work on the topic, echoes the OECD findings. According to the ABS, the number of households across Australia is projected to reach between 12.6 and 13.2 million in 2041, with the number of families projected to rise to between 9.2 and 9.4

million, up from 6.7 million in the mid 2010s. Couples with children are projected to make up 43% of all families in 2041, down slightly from 44% in 2016, while couples without children are projected to be the second most common family type, making up 39% of all families. Single-female-parent families are forecast to comprise 14% of all families in 2041, while single-male-parent families will increase the fastest of any family type, surging by between 44% and 65% by 2041, according to the ABS data. Lixia Qu, a researcher with the federal government’s Australian Institute of Family Studies, says there’s nothing new about such shifts given families constantly evolve in response to the many opportunities and constraints they confront during their development. “These include those arising from the economy, technology, various forms of legislation, and societal values,” she says in a report on families in Australia. “Such factors themselves continue to evolve, with family transitions being key drivers of some of these changes.” While the look of Australia’s families may be changing, the concept’s centrality to the nation is set to stay, according to global financial services firm Perpetual. When it asked 3000 Australians about key life priorities, it found that family (88%) was the area of top concern, above financial situation (69%) and physical health (69%).

A U S T R A L I A N C O N V E YA N C E R • 1 5

Projected persons, by living arrangements, Australia (000s)

2016

2041

Husband, wife or partner

5,913.5

7,825.8

Child

5,817.0

7,828.5

155.5

272.8

Husband, wife or partner

5,025.4

6,944.6

Other related individual

93.8

174.2

Male parent

193.9

320.9

Female parent

878.2

1,313.0

1,690.1

2,572.4

93.9

169.1

Related person living in another family

249.9

288.5

Unrelated individual living in a family household

334.7

787.4

Male lone person

1,045.8

1,444.3

Female lone person

1,254.6

1,601.4

Group household member

954.4

1,544.5

Usual resident of a non-private dwelling

490.8

868.3

24,190.0

33,955.9

Couple family with children

Other related individual Couple family without children

One-parent families

Child Other related individual Other families

Lone-person households

Total

The family household living arrangements illustrated use Australian Bureau of Statistics census data between 2001 and 2016. The 2041 projects assume the historical rate of change between 2001 and 2016 will continue to 2041. SOURCE: Australian Bureau of Statistics

16 • SPOTLIGHT

THE FUTURE OF HOUSING

SUPPLY MUST MEET DEMAND “It is clear that housing supply and affordability continues to be a concern for industry experts . . .” Michael Zorbas

hen it comes to skyrocketing house prices and Australia’s housing affordability crisis, industry groups are in lockstep that accelerating supply is key to a long-term solution. The Real Estate Institute of Australia (REIA), the professional body for Australia’s real estate sector, says while there is an unfortunate “complete lack of unity” in decision making across the political spectrum when it comes to housing Australians, the “need to build more housing stock across the private sector and social and affordable housing” is obvious. The requirement for urgent action comes after its most recent Housing Affordability Report found further affordability declines in NSW, Queensland and South Australia. REIA president Leanne Pilkington says cost-of-living has never been more top of mind. “It was these two things that characterised the September quarter. Nationally, the outlook for Australians serving a home loan continued to be challenging with the cash rate now at 4.35 per cent. Housing affordability has declined over the September quarter 2023,” she says in a statement accompanying the lobby group’s most recent report on the issue. “The proportion of income required to meet the average loan repayment increased to 45.5 per cent. Housing affordability has declined over the September quarter 2023, with the proportion of income required to meet the average loan repayment increasing

to 45.5p er cent, a marginal increase of 0.1 percentage points.” The Property Council of Australia, the national lobby group representing property developers and property owners, is also urging more housing supply as a priority. Analysis by the group has found several districts across Greater Sydney are lagging behind areas in the city’s west like Blacktown, The Hills, Penrith, Liverpool and Wollondilly on delivering enough housing to help ease Australia’s housing squeeze. Property Council of Australia chief executive Mike Zorbas says the industry remains broadly optimistic about its outlook, but that inconsistent planning regimes and “almost monthly tax hikes around the country are clouding the outlook”. “While it is pleasing to see consistency of industry confidence, it is clear that housing supply and affordability continues to be a concern for industry experts, just as it will remain a decisive issue, alongside immigration, at the next federal election,” Zorbas says. In a positive sign for the sector, the Property Council’s December survey found industry confidence remained steady, with its Confidence Index increasing one point to 114 index points. A score of 100 in the Confidence Index is considered neutral. The survey canvassed the views of almost 750 respondents, including owners, developers, agents, managers, consultants and government in all major industry sectors and regions.

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18 • SPOTLIGHT

THE FUTURE OF HOUSING

WE LOVE BRICKS AND MORTAR “Our industry is now advancing technologically at a rate that many long-term conveyancers would not have imagined.” Fran Andrews

uoyant long-term prospects for the Australian property market augur well for the nation’s conveyancing industry, despite some downside risks on the horizon. The conveyancing industry, in line with past experience, is likely to have its short and long-term future heavily influenced by the property market. In the short term, the four major banks – CBA, Westpac, ANZ and NAB – forecast that interest rates will start to ease in late 2024, which should encourage home sales and housing starts and be positive for the nation’s conveyancing industry. Looking further ahead, trisearch, an Australian SaaS provider which offers an all-in-one conveyancing solution, points to history as a predictor of long-term industry resilience. “If history has anything to say, Australians will continue to invest in property as seen in the early 2010’s when interest rates fluctuated around six per cent,” trisearch says. “Therefore, the conveyancing industry will continue to display the resilience it showed throughout the COVID-19 pandemic.” Fran Andrews from the Australian Institute of Conveyancers’ Western division agrees that the long-term health of the Australian industry may be positive, saying that the future is “very much in our own hands in a number of ways”. Andrews points to long-term issues that tie into the outlook for the industry, with a big one being the role of technology.

In the same way that household living will be ever more impacted by technological change, she says a similar rapid advancement is underway in conveyancing. “After years of being idle, our industry is now advancing technologically at a rate that many long-term conveyancers would not have imagined,” she says. “Electronic conveyancing has revolutionised the way we do business and has enabled, or expediated, conveyancers’ and other players’ online presence. “We have an abundance of settlement software programs that are new to market or updating their wares so we are using seamless, time-efficient programs that allow us to focus on our most important asset, our clients.” However, Andrews is confident there will always be a role for humans in the process. She says while technology will “always have its place in streamlining processes” for people “in what is likely to be the biggest financial commitment of their lives, the human touch is very reassuring to our clients”. Another change will be driven by demographics, she says. In particular, she points to the “ageing” of the sector, which will see many participants “continue to retire, or sell to large companies”. “Whether this is a positive or negative change is likely to be the personal view of the individual. It is likely that the industry landscape will change over the coming years and the long-term effect will be fewer, larger firms.”

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20 •

q+a

DOTTING ‘I’S AND CROSSING ‘T’S Jared Zak, Dott & Crossitt

Keeping it smart and simple

n its website, fast-growing conveyancing team Dott & Crossitt is quick to qualify its company name.

“There are no names on the door here. Dott & Crossitt aren’t people, but an ethos of how we work side by side with our clients to make the process of buying and selling a property smooth, efficient, and uncomplicated.”

Principal solicitor Jared Zak founded the business in 2014 after careers in law and finance in Japan, London, and Sydney. The operation has been on an upward trajectory ever since. Confident, collaborative, positive, and no nonsense: the words aptly describe both Dott & Crossitt and the man behind it. Australian Conveyancer magazine sat down with Jared Zak late in November, at a time when most businesses were beginning their wind-down to Christmas. Most … but apparently not so slow for the conveyancing industry. Against a current of successive home loan interest rate rises, soaring cost-of-living expenses and sky-high housing prices, conveyancers had been busier than ever. The D&C boss put context around the perfect storm in property circles.

PHOTO: JULIAN ANDREWS

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AUSTRALIAN CONVEYANCER: Jared, thanks very much for joining us - it’s a busy time for you. I understand your business has doubled its search transactions in the past year. It’s a rapid rise from where you started your business. we’ll unpack that journey but firstly, what brought you to where you are now? JARED ZAK: So, when I left law school in Sydney, I did what I thought I had to do, which was to get into the big firms. Then once I got there, I did the things that again, I thought I had to, which was to move to London, and work for magic circle firms. I then spend the next six or seven years working in one of the most prestigious firms in the world - but just absolutely hating life, just sitting in front of a desktop computer, just effectively proofreading prospectuses. Although I was working on some amazing deals, I was not learning much at all. It took a little while to realise it was a bit of a trap. I was a small cog in a big wheel by the end of my time in London. I said at the time to my ex-wife, that when I come back, I want to do my own thing. I want to do something basic, but I want to do it really, really well. My ex didn’t like that idea so much, particularly in the first couple of years. AC: Was it because of a lack of security? JZ: Exactly, when you’re starting off a law firm, particularly conveyancing. The initial idea was not to do conveyancing, it was just to do something general, maybe a suburban practice, but to do it well, with a focus on customer service and perhaps with a focus on IT. Back then, when PEXA was on the horizon but to do deals, I could see something was going to change there and I wanted to be a part of it. But you can’t make money doing just six or seven conveyancing matters per month. It was hard going, and we didn’t have any staff. I just sort of stuck to it and after two or three years, the penny dropped and thought ‘there is something in this’. If I just commit fully to conveyancing and focus just on this thing called PEXA or Sympli, and the idea that everything’s going to be electronic. It was in about 2015-2016, where we said ‘no’ to other legal work and just focussed on conveyancing.

22 • Q+A

“We have done a lot of work to custom build our CRM, and just focusing on the marketing of our company and hiring the best people we can find.” Jared Zak

AC: That was a transition? It wasn’t jumping straight in? JZ: Absolutely. We were a generalist practice doing business sales, leasing, all that kind of stuff, and some of it was profitable, but also very demanding of my time, I couldn’t delegate it. So, with some reluctance, I said no to that, and then we got into the conveyancing business. And this week (late November) was our busiest ever settlement week (120 settlements in a single week). Back in those early days, I remember 20 a month was my first goal. And then five or six years we’re now starting to be what I thought the business could be, which is great.

when you first started Dott and Crossitt? JZ: It sounded stupid at the time, but we wanted to be the biggest conveyancing firm in Australia. That was the goal.

AC: What was the vision going in? Describe that moment in your life where you went “I think this is going to be it?” JZ: It is encapsulated in the name, which is a bit of a silly one. But ‘Dott and Crossitt’ the idea is dotting the Is and crossing the Ts. We are serious about what we do but we also don’t take ourselves too seriously, and that’s one of the principles that guides us. We are approachable, we’re not this stuffy old law firm that pretends everything’s the Magna Carta or overly complicated. We are modern, we like to embrace technology, and use it where we can. So that was some of the ethos. There were heaps of businesses that were innovating and disrupting at the time, tackling things differently and efficiently.

AC: That’s good. So, your business has grown quite incredibly in the past ten years. We’ve talked about roadblocks or speed bumps; can you describe some highlights in your journey? JZ: Almost every time before we proceeded a growth phase, we’ve almost always taken a leap of faith. You think we’re just about to grab a whole lot of additional market share or there’s something about to come online. Almost every time I’ve had that uncomfortable feeling in my stomach, knowing something was the right move but was also terrifying [it normally was normally followed by huge growth]. Compared to this time last year, we are so much busier now, and the biggest thing that has changed is correction in the market. Every time we have a correction, we always emerge with a heap more market share. It’s phenomenal.

AC: Businesses outside of the legal fraternity? JZ: Yeah. I think if you go back 10 years, Uber was just changing the way that yellow taxis were done, so I guess that there was some inspiration from those types of approaches. Airbnb too. AC: Did you make a conscious effort to review other business practices? You just mentioned Uber as a broad example, but did you examine other businesses, and think: “I could take that idea?” JZ: Not particularly. I mean, I did take a lot from PEXA, just culturally and how they went from being a start-up. PEXA allowed me to study them a bit, but I can’t think of too many others. AC: So, that early vision was “We’ll see where this goes”? Did you have something specific in mind

AC: Why did you think that was stupid? JZ: Well, we’d be literally doing seven settlements a month. I had a business coach at the time, and he got me inspired and said: “If you do all this right, there’s no reason why you can’t be (the biggest conveyancing firm)”. And I wrote it down. I think I probably only half believed it, but it’s now realistic.

AC: You were saying how busy you were right now, which sounds like the property industry has gone mad. Tell us about the impact on your business specifically. JZ: The last few months have been just Goldilocks conditions. And it’s not just me saying that. I sit in meetings with sales agents every Monday, and for the past few months they say, “You have never seen, and will probably never see better market conditions than right now.” There are currently lots of buyers, lots of stock in the local market, and prices are still high. All these elements usually never happen at the same time. Prices are probably about to correct if they haven’t already started correcting, but the volume is still there. The ultimate message the agents are getting from principals, which is the takeaway, is that this is not going to last.

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AC: What do you change in your business during this busy period? JZ: While the money’s there, cash flow has been good, we’ve been diligent in trying to reinvest it back into technology. We have done a lot of work to custom build our CRM, and just focusing on the marketing of our company and hiring the best people we can find. AC: How do you mitigate against any potential losses down the track if the market changes? JZ: By making sure we are putting money away for a rainy day and not going too crazy either. I had an opportunity to lease some nice premises recently, and in terms of rental, now’s the time because we’re well established and it’s nice to have nice headquarters, but I guess it was that voice in the back of my head that just said: Is this the right time to be doing this? But what is it going to look like in six months if the market corrects? Because I’ll be paying that premium rent. So that was one those things that I passed on. AC: You were talking about technology, and I understand that you use numerous platforms to conduct searches, triSearch being one. Do you use other similar platforms like do some of the council searches? JZ: There’s nothing out there that integrates directly to our invoicing, that’s the best thing about triSearch. There’s a lot of veteran conveyancers who still like doing manual searches. But this can cost the offices $100 per matter because of the time it takes to fill out the forms, chase up council. I think one of the challenges is just getting people to embrace new systems. AC: Tell us about your foray into to Western Australia. The different jurisdictions, state by state, and different ways of doing things. Ultimately, you’d have to think there must be efficiency in a common national approach. JZ: Unfortunately, I don’t see it happening. It’s not on the agenda anywhere. NSW is the most litigious and most disclosure-heavy regime, and a lot of agents and clients complain about that and say “why have these contracts this thick in NSW? I bought a property last year in Queensland using a contract of 20 pages.”

There is a tendency from industry groups like the REI to say let’s try and pare it back and get the agents to start having more control with the contracts. Let’s de-lawyer it all. From a consumer perspective, I see some sense in it, but it looks like there will be opposition. Queensland have now introduced a new disclosure statement. It’s going to be more like New South Wales, more disclosure up front, which is probably going to be more lawyer involvement upfront. AC: You’ve recently started doing matters in Western Australia. What’s that journey been like in the context of what we have just spoken about? JZ: That is literally the Wild West. Over there, it’s more market driven by so-called settlement agents. They are still lawyers but that’s sort of the market. You talk about the focus on lawyers in NSW, but in Queensland, the lawyers are taking the backseat. They normally only get the contract after its exchange. The conveyancing process in Queensland from a lawyer’s perspective is sometimes described as a ‘rescue mission’. Then you go to WA and its effective, there are no lawyers. You can have a whole transaction where you’re not dealing with lawyers, you’re dealing with settlement agents. It’s very different. It’s closer to Queensland. There is not much disclosure, there’s a lot of conditionality. AC: How is the demand tracking within the business? JZ: It’s huge. In terms our own business, were doing probably about four or five times as many in WA as we were five months ago. The buyers’ agents are saying to Sydney and Queensland buyers “look, why don’t you have a look at Perth?” encouraging them to buy off the plan, and house and land packages in WA where there’s better value for money. AC: Have you considered frontiers like South Australia or something like that? JZ: I think ideally, we would do South Australia. My preference would be to really consolidate on WA and Queensland first. We had not planned to take on WA, but people kept asking me “Can you do WA?”, and then I finally said, “let’s do it” … and the floodgates opened.

24 •

the toolbox

Preparation and peak performance

n the need to work smarter, US president Abraham Lincoln (18611865) once said: “Give me eight hours to chop down a tree and I will spend the first six of them sharpening my axe”. Meticulous preparation was central to his message about achieving success at the time. One hundred and sixty years later, Lincoln’s sentiment remains true for any business today. In an era of rapid change many business owners and practitioners have done whatever it takes to respond quickly and remain competitive. Acting fast in the short term has not always meant acting efficiently in the long term. But agility and profitability must coexist for business to remain successful and relevant. Conveyancers can get caught up working long days. The industry is highly competitive, customers and partners rightfully demand lofty standards because the stakes are high. Getting the balance between speed, quality and sustainability is critical. Staying ahead of the curve requires a strategic approach.

BOOSTING PROFITS

To boost profitability, you must keep track of your business. Using software allows you to track the number and type of matters that come in, so you can make informed decisions on things like whether to increase your fees or take on new staff. Keeping track of your data and using technology to automate your processes can also save time, enabling you to take on more work. Increasing prices is perhaps the hardest goal to achieve, especially in a competitive market. But keeping track of your work can help reinforce the value of what you do, and avoid the need to provide client discounts.

DISCLAIMERS The content provided in this publication is of a general nature and does not take into account future market conditions or your individual circumstances. You should exercise your own skill and judgment when considering investment decisions and seek professional advice where appropriate.

RELATIONSHIPS ARE EVERYTHING

Your firm’s success depends on the relationships you build with clients and agents. Potential clients rely on recommendations from agents and friends. Clients will judge you based on their experience during their transaction and communication throughout this process is key. Agents will also refer business to you if they’re confident you will provide optimum and speedy services to their clients. Using software allows you to manage your files so client communication is faster and their information is more easily accessible. Software that tracks leads and referrals can also help you build up your business, offering a way to circle back to your referrers and follow up leads. Using data already stored in the software also makes it easier to assess all parts of your business. It also slashes admin time, leaving more time to improve relationships and chase referrals.

While triSearch uses commercially reasonable efforts to ensure the content contained in this publication is current, triSearch does not warrant the accuracy, currency or completeness of the content and to the full extent permitted by law excludes all loss or damage howsoever arising (including through negligence) in connection with this publication.