Queensland’s Property Occupations Bill was passed earlier this week, bringing a raft of changes to the state’s real estate industry.
Formerly covered under the Property Agents and Motor Deals Act (2000), the real estate industry now will work under its own set of regulations.
The way real estate is bought and sold in Queensland will change in ways that will to affect both buyers and sellers: here’s what you need to know.
1. No more guide prices
The most controversial aspect of the bill was the removal of price guides for properties sold through auction. Intended to stamp out the practice of underquoting, the changes will stop agents discussing price guides with potential buyers or property reporters.
The proposal was supported by the Real Estate Institute of Queensland but derided elsewhere. Groups including the Real Estate Institute of New South Wales the Real Estate Buyers Agent Association of Australia voiced their opposition to the legislative changes in recent months.
It’s unclear what effect the changes will have on Queensland’s real estate market.
2. …with some caveats
According to Attorney General and Minister for Justice Jarrod Bleijie, buyers won’t be complete in the dark when it comes to property values. The bill was amended to allow real estate agents to disclose a price guide to listing websites so buyers can still search for properties within a certain price range. However, listing websites are still unable to publish the price estimates.
If a seller consents, agents can also provide “market information about a property”.
“However, the bill allows an agent, with a seller’s written consent, to give any person, which includes, for example, a buyer or a property journalist, with market information about a property through the form of a comparative market analysis. There are also numerous online sources that provide market information about properties,” said Bleijie.
“This information provides objective, not speculative, data to assist a buyer to work out what a property may be worth to them. This information will also assist property journalists and writers to prepare real estate profiles and editorial pieces without the need for real estate agents or auctioneers to breach provisions preventing disclosure of price guides for auction properties.
“Prohibiting agents from giving a price guide indication for auction properties, or properties for sale without a price, also creates a level playing field for the industry.”
It’s unclear at this stage what “market information” entails.
Price guides aren’t the only form of disclosure to go in Queensland. Agents are now able to charge commissions even when they have a beneficial interest in a property, and will no longer have to disclose that commission to buyers. There is no cap on the commissions received, an issue which some believe may have an inflationary impact on prices.
Labor MP Desley Scott said that:
“It is preposterous to suggest that the commission being paid by the seller to the agent will have no impact on the buyer. It has the potential to make a significant difference in the contract price of a property. Where the contract price is distorted by a highly inflated commission, the buyer has no way of knowing what the real value of the property is. Transparency is paramount.”
4. Changes to licenses
The new legislation removes the requirement for property developers and their employees to be licensed. Until now, property developers in Queensland were the only in the country who were required to hold a license. Bleijie claims that this move will reduce red tape in the industry, removing barriers to entry to the property developer market and stimulate the economy.
As the Property Agents and Motor Dealers Act has now been split, those who auction real estate will carry a different license to those selling other forms of property. The changes mean that anyone who auctions real estate and other asserts will have to hold two licenses.
5. Use of land disclosure
Under the Property Agents and Motor Dealers Act, agents had to notify a buyer if the land they were considering could not be used for residential development. That provision has been removed, meaning that sellers and agents are not required to tell a buyer, pre-contract, that the piece of land they are about to purchase cannot lawfully be developed for residential purposes. That means it’s up to buyers who are considering residential development to investigate council requirements themselves before signing their contract.
This piece originally appeared at Property Observer.