The Allan government is facing significant backlash over its real estate sales reforms, with every MP in the state to be contacted by a concerned industry group.
Victoria’s top real estate industry body has written to every member of the state’s parliament seeking urgent changes to new real estate sale reforms legislation.
In a six-page warning they outline potential unintended consequences of the Allan government bill intended to thwart underquoting ranging from significant cost risks for home sellers to unnecessary increased regulation being funded by taxpayers.
They also have concerns it will force agents to take accountability, and face penalties, for vendor decisions they can’t control.
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It is the first time the Real Estate Estate Institute of Victoria has written to every Victorian MP since the Covid pandemic’s lockdowns significantly impacted the state’s housing market.
REIV chief executive Toby Balazs said there were considerable concerns with the proposed legislation in its current format.
“From a homebuyer or seller perspective, the ambiguity that exists in the bill as currently proposed will make a tough property market significantly tougher,” Mr Balazs said.
At present, the institute is anticipating disclosed reserves would lead to fewer auctions, meaning less transparency for buyers.
But there’s also uncertainty about what would happen if a home slated for auction received an early offer from a buyer, and that sparked counter offers in an impromptu or board room auction ahead of schedule.
REIV chief executive Toby Balazs has warned of unintended consequences from the bill’s planned changes to Victoria’s property sales sector.
The REIV argues that if the government insists on reserves being disclosed seven days ahead of time, a 10 per cent range that included the reserve would allow for revisions to that reserve price without need to alter an auction date.
They warn failing to do so risks forcing sellers to extend sales campaigns at not insignificant cost whenever their reserve is altered, unless the legislation is altered.
Under the current bill there is an implication the sale date must change any time the reserve does.
But the REIV warned that interest rate decisions and other short-term market impacts that cannot be forecast, like the commencement of the conflict in Iran, could lead to home sellers legitimately wanting to revise a reserve — and being forced to delay and increase their costs as a result.
The alarm bell is further being rung over the intention of creating a new public database for the disclosure of sale price information — which is already covered by multiple private operators, including online home advertising portals, and would be an unneccessary burden for the state’s coffers in the view of the Institute.
Politician Paul Edbrooke is facing strong calls to review planned legislation to overhaul the real estate sales sector of Victoria. Picture: Mark Stewart.
The Allan government introduced the legislation to parliament earlier this month with an indication they expected aspects to commence from October 1 this year.
Minister for Consumer Affairs and Renters Paul Edbrooke said the goal was “stamping out underquoting”.
“These new laws mean no more wasting your Saturday at auctions trying to buy a home that you could never afford,” Mr Edbrooke said at the time.
The REIV’s warns the bill also includes changes to timelines for sales contracts suggesting it would take at least 14 days from the date of a contract being made available for a sale to be locked in.
This delay could cost sellers if a buyer moved on, and buyers if the seller got a better offer a week after they made one.
Alterations to the way deposits are released to sellers, who often need the funds to pay their own deposit for their next home, have also been the subject of calls for revision.
Victoria could see fewer auctions, and greater confusion about how aspects of the sales method will be used as a result of legislation put before state parliament this month.
For legislation around the disclosure of sale prices, the REIV are also seeking exemptions for a wider range of reasons, such as individuals with significant security concerns.
The REIV is also concerned agents appear set to be held accountable for the disclosure of reserve prices and sales results, but it will be home sellers who have the final say in these matters and could refuse to authorise this.
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