Obsession with new rules leaves buyers bamboozled
becoming an Aussie obsession. New laws, rules and regulations, along with revisions to existing directives, seem to be appearing on a never-ending basis. And the real estate market hasn’t escaped this barrage.
Many of these laws are understandable and required.
Some of us may remember the days when Gold Coast real estate had more sharks swimming in it than the nearby waters or when it was possible to take a smoke break on a highrise building site right next to gas canisters, “cordoned off” with guard rails that only went to ankle height. In that sense, rules and regulations have evolved in a productive, sensible and intelligent way.
That said, I often discover new laws which creep into state real estate markets that defy logic or are simply impossible to police. Consider modern agents.
The list of things they’re not allowed to do has grown longer than ever before.
I am sure it is only a matter of time before they’re banned from expressing any form of opinion, suggestion or advice — lest they upset someone.
Queensland agents, for example, cannot disclose a price figure for a home auction. Not a guide. Nothing. In NSW, agents are banned from using the term “offers over”. There is also a variety of ill-conceived guidelines for developments in some states.
These include minimum unit issues and window numbers. The list goes on. And all of it comes under the category of “pointless, we’ve clearly lost the plot” type rules.
Some may claim these measures are market enhancing, but I’d argue that variations in state legislation for home sales and construction shouldn’t exist.
There may be some benefit in implementing price controlling in many areas of commerce, but real estate is unique. The beauty of the market is that buyers and sellers work everything out on their own.
If a developer designs a tiny studio apartment and no one wants to buy it, guess what? They won’t build them at all or they will redesign the spaces to meet market demand.
Buyers want to make the choices themselves. If a small home is the answer to living in their dream urban location, current legislation shouldn’t stop them making this decision.
Let the market decide what the standards are. A unit with just one window may not sound appealing to some, but in many international cities that’s all that’s on offer and buyers are willing to purchase them.
Tokyo buyers, for example, love studio apartments. They’re quite happy with one window and just 25sq m.
In Singapore, a compact 34sq m is fairly standard for accommodation. In London, you can buy a 39sq m studio with just one window and no parking in a trendy West End area for $2.76 million.
Move to downtown Harlem in New York City and you can grab a 40sq m unit for under $300,000, but it’s six floors up with no lift and two bedrooms and a living area have been fitted into the tiny space.
As for our new passion for pricing control, is it really necessary? Or is it simply a result of the litigious modern society in Australia?
The way I see it, agents who are intent on acting in other than professional ways will continue to do so, laws or no laws — as happens in all professions.
As for developers, if they design a product that no one wants to buy, the market will tell them — no lawyers or council officials needed.