Realworks, trust and the new compliance burden for real estate

Kasey McDonald (00:06) Well, welcome to Before the Weekend, your go-to real estate podcast where we cut through the noise and deliver what truly matters. I'm Kasey McDonald and with me today is my co-host, Peter Schravemade. How are we today, Pete?

Peter Schravemade (00:19) Yeah, good. What noise are we cutting through today, Kasey?

Kasey McDonald (00:21) Well, actually,

we are going to start with a bit of a cracker today, I think. this morning. We've got a big one. No. I think everyone may have seen what's been lighting up on social media, especially in the Queensland real estate industry this week. And what a

Peter Schravemade (00:27) Really, really. It doesn't sound like us on a Friday.

Yeah, well maybe those south of the border, the Mexicans, the New South Wales and Victorians and Adelaideans, maybe they haven't seen it. I for the rest of the state there's been a there's been a bit of a debacle, hasn't there been, Kasey?

Kasey McDonald (00:44) Ha.

Look, there absolutely has been. And I think it really relates to the transition that the REIQ have made to move to a new platform for Realworks. So they've transitioned from Forms Live, Dynamic Methods product, and they've moved to a new platform for Realworks. So I know that you've also been chatting to Antonia Pete. So like maybe we could dive into

Peter Schravemade (01:02) Mm.

Kasey McDonald (01:20) what you know about what's actually happening here.

Peter Schravemade (01:23) Yeah. Well, I think that this is one of those stories where on the surface it looks like there's a software issue. So, you know, if you're a Queensland real estate agent today, or actually let's go back to the 30th of June, you would have woken up to a bit of a drama because like you've logged into Realworks and either your templates and forms are there or they're not there, or you know, it's a different operating system to start off with. So you've got you've got a few dramas happening.

a lot A lot of Queenslanders that I've spoken to are like what the heck has happened, this is a software issue, why would the REIQ do this and you know, all of that. And I think that kind of undersells the problem here and to frame it, I think we need to go back. But I'll talk about the forms because I think

You know, the thing is the forms are not just software in an agency. They're not just software. They are encased in software now because we've moved away from filing cabinets. We've, you know, we've moved away from that. But they're effectively the forms are actually part of the operating system of all real estate businesses across Australia. and agents and property managers rely on these platforms for contracts, appointment forms, tenancy agreements, breach notices.

Entry notices, templates for other documents, signing workflows, and obviously compliance is part of it. So when something major happens to that infrastructure, that software infrastructure, it definitely makes it more difficult. And the simple version of what's going on at the moment is that the Real Estate Institute of Queensland and other real estate institutes have had a longstanding relationship with Dynamic Methods, whose platform Forms Live powered

Realworks. Now in other states, that's called something else. The REINSW still has a relationship with Dynamic Methods and it powers their forms. REISA has moved away, but they did have a relationship with Dynamic Methods. As far as I know, the only two states who are still left are REIWA in Western Australia and the real estate institute of New South Wales. They're the ones that have a relationship with Dynamic Methods. But

That relationship here in Queensland has ended. And I believe Queensland is the largest portion of the Forms platform for Dynamic Methods. So in the past, Dynamic Methods have said we're the biggest forms provider in Australia. Now I think other forms providers could probably question as to whether they are or not because they've because you know it's a big deal for Dynamic Methods. They've had this taken off them.

Now Dynamic Methods has come out. So we're in the middle of a transition where it's going from Dynamic Methods to another company. And Dynamic Methods have decided that they're not going to go out quietly, as is I suppose they're right as a prop tech. They have launched their Forms Live independently in Queensland, with new Queensland forms, which it says are prepared by a new legal firm. So

The Queensland agents and property managers now have a very live issue in front of them. Which platform are they using? Which forms are they using? Where is the historical data that has come before this? And what does that mean for their day-to-day compliance?

Kasey McDonald (04:38) And so Pete, o obviously this just hasn't come out of nowhere though, right? I mean, making a big decision like this just doesn't happen overnight. So is there some history here?

Peter Schravemade (04:48) No.

Yeah. Yes. Yes, no, it hasn't come overnight. And this is it's actually a really good question, Kasey, because the background goes back to late 2023 and early 2024. And what happened is REA Group, which is realestate.com.au, PropTrack and a bunch of others, Realtair is part of that. They proposed acquiring Dynamic Methods. well, they didn't just propose, I believe they entered a contract. I think so. That proposed contract or acquisition didn't proceed. But before it fell over, the ACCC had commenced a review and released a statement of issues. Now, that statement of issues was not a final decision. Yeah, yeah, that's right. Yeah, that was a big statement of issues because it was basically the regulator setting out preliminary concerns and asking questions. And the concerns were pretty relevant. the ACCC was looking at whether the largest digital real estate advertising business acquired.

Kasey McDonald (05:27) I remember saying that. Yep. Mm-hmm. Mm.

Peter Schravemade (05:45) acquiring the largest digital real estate forms provider would create competition issues. That's what they were asking. And so the regulator was basically saying what happens if a company that controls the dominant portal also gains control of one of the most important parts of the real estate workflow being the form system. So the ACCC raised issues around foreclosure of competitors, data related risks.

Access to commercially sensitive information and whether and whether the control over the forms infrastructure could reinforce REA's already strong position, and potentially lessen competition. So the acquisition didn't happen. REA pulled out after that statement was released. I'm not saying that they're related, but it just happened that they pulled out afterwards. But the concerns of the ACCC actually suggest to us that the d digital forms are not a side issue anymore. They're actually

part of a greater critical industry infrastructure.

Kasey McDonald (06:47) Yeah, I definitely remember seeing the articles certainly coming out in relation to that. But I guess it kind of leans into my next question though. You know, did the REIQ need to transition away from Dynamic Methods?

Peter Schravemade (07:02) That's also a very good question. and in in my view, once it became apparent that the incumbent forms provider, being Dynamic Methods, through Forms Live, once they were the subject of a proposed acquisition by REA Group, the I actually think the REIQ had to seriously consider the future of that relationship. But I'm not saying we know every c every commercial factor, we don't know what was going on. I haven't seen the contract, I haven't seen the board papers.

Kasey McDonald (07:04) Ha.

Peter Schravemade (07:30) I don't know what the discussions were behind closed doors, but if you're the peak body and you're responsible for forms that your members rely on every day, you can't ignore the governance implications that an acquisition like that could have caused. So if I was a member, I would have asked, why is our forms infrastructure sitting inside a system that's owned by the dominant portal, knowing how much that you know most real estate agents already pay to REA Group, why do they now have our forms? What does that mean for our data?

Kasey McDonald (07:43) Mm. Absolutely.

Peter Schravemade (07:59) Do they have visibility of things like who the listing form is signed? you know, the point of listing? Do they have the information that contains, you know, contract value, who the parties to the contract are or the people that are party to the contract? What does that mean for agency choice? What does that mean for integrations? And what does that mean for competition? What does it mean for the independence of the forms that we've we rely on? So it is completely understandable, in my opinion, that the REIQ would want to bring that.

Forms platform back into an industry-owned environment. Now, having said that, that doesn't mean that the rollout of what they've just done has been perfect. It clearly has not been seamless. But the strategic reason for wanting control of the form's infrastructure is not hard to understand and very, very hard to ignore. Like you can say what you want about what's going on at the moment, but you know, this move could actually save the future of real estate agents and property professionals in this state.

Kasey McDonald (08:46) Mm-hmm.

Peter Schravemade (08:57) So I'm n I don't think I'm understating that, right?

Kasey McDonald (09:00) No, no, and I agree. And I think it just comes back to the questions, I think, that you kind of asked as a part of that as to what does it mean for our data, what the agency choice, you know, more importantly, if REA was to acquire it, what would all of that mean? So I think it kind of is relatable. and no doubt, possibly some of the same questions that the REIQ as our industry body were also asking.

Peter Schravemade (09:06) Hmm.

Yeah.

Kasey McDonald (09:26) And

Peter Schravemade (09:26) Yeah.

Kasey McDonald (09:27) also questioning maybe is that what the ACCC was also suggesting, right? Yeah.

Peter Schravemade (09:30) Yeah, e yeah, yeah,

and I'd and I'd go as far to suggest other REIs have also made the decision to step away from Dynamic Methods in the wake of that. So from a Dynamic Methods perspective, it really hasn't been a it hasn't been a wonderful move. They there was an acquisition proposed and I you know I've heard some of the values of what that acquisition was. It wasn't a small one. and at the end of that, their clients

Kasey McDonald (09:36) Mm-hmm.

Peter Schravemade (09:55) The consumers for Dynamic Methods, which is at the various REIs, I think except for Victoria, have all made a decision to peel away one at a time, leaving only New South Wales and Western Australia. Mm.

Kasey McDonald (10:07) Mm-hmm. Yeah,

look, and obviously you mentioned that of course it clearly hasn't been seamless. We're certainly seeing social media, many, many comments from many, many people in regards to this. And of course, timing, I think, has been one of those biggest complaints that I've seen. like why now? Why on why this timing when we've got AML coming in? so you know, what's your kind of thoughts on that?

Peter Schravemade (10:13) Mm.

Yeah.

Yeah, the timing's atrocious. It's terrible. And but you know, Antonia Mercarella has come out and publicly acknowledged that. She did it in her update on the 30th of June to Facebook. She basically stated this is dreadful timing. We've got, you know, end of financial year. Let's start with that. Most property managers and principals are already neck deep in that. We've got AML/CTF hitting on, you know, pretty much that exact date.

she publicly apologized. She said the date was driven by the end of the contract with the former provider Dynamic Methods. And she also said, you know, contractual constraints also meant that the REIQ was effectively gagged or couldn't start publicly communicating the transition until 1 June. So that was that was in a post. So the REIQ's public position is that the timing was driven by the expiry of the previous contract. Now

I don't know. Like in defense to Dynamic Methods. And by the way, before we even start this, I've asked I've asked the head of growth at Dynamic Methods for comment and it's been a no comment ongoing. We've done that twice now. so it's been a no comment. We've asked them for comment, they haven't commented. And to be fair, the REIQ are also staying tight-lipped about this, other than what they've released to the public. But the REIQ's public position is that the timing was driven by the expiry of the previous contract. Now we don't know.

Whether dynamic you know, whether an e an extension was requested, whether an extension was available, whether it was refused, or whether other transition arrangements could have been negotiated. We just don't know that because we've not seen the underlying c commercial agreement and neither party is talking about it at the moment. So I would say that the timing was probably nobody's fault. I my

I would say that the public explanation is that the contract ended on the 30 June and the REIQ says it was constrained in what they could communicate before 1 June, which also answers a lot of people in the industry about why did we not know earlier that being constrained. I don't know any more than that, but they're saying that being constrained. That should give the industry some context. But you know, unfortunately that's not going to remove any kind of practical pain for any of the real estate agencies or property managers out there.

Kasey McDonald (12:50) Yeah, absolutely. And I've certainly been saying those comments as well, just around, you know, historical forms, templates. You know, we've got obviously some of the integrations are still not linking. you know, people aren't able to get in and certainly get old entry condition reports, just as one example from the property management space. you know, so what's you what are you what's your feedback or what do you understand about why potentially those forms aren't appearing right now?

Peter Schravemade (12:56) Mm-hmm.

Yeah.

Yeah, I think that's a big operational question. Neither side is actually pointing fingers at this stage, which, you know, means that we shouldn't be either. So again, we have to stick to what's been said publicly. In the launch day update, Antonia said the REIQ had worked to ensure saved forms, completed forms, finalized forms, templates, PDF, and photographs sh would be available in the new Realworks platform on launch day. So it's quite clear to me.

Kasey McDonald (13:25) Mm-hmm.

Yeah, absolutely.

Peter Schravemade (13:48) That the REIQ expected them to be there on that day. now I don't know what's happened, whether that is the incoming software providers or the outgoings, or it's something else in between. And I'm not speculating on any of that. But clearly that has not happened. Antonia's admitted that hasn't happened. So she's also said that the REIQ does, and this is really important for you guys who are losing your mind out there. She said that the REIQ does have access to those materials and expects to return access to the users.

within around two weeks, but she has said urgent matters can be handled on a case by case basis. So, you know, if you've got a QCAT issue coming up, you've got a an appointment date, you need information from there, it's very important not to, you know, mess around the magistrate or anyone involved in that. I would be calling the REIQ and making them aware of that. They seem to have access to that. But with regards to what actually exactly did happen, we don't know.

Could be, yeah, migration, could be timing, could be a technical issue. It could be connected to the change in tech provider. But unless one of the public one of the parties actually comes out and e explains that to us publicly, I'm probably not gonna speculate on that. What we can say is for agencies, especially property management businesses, those documents aren't just archives, they're actually operational tools. And I feel the REIQ is very aware of this and the inconvenience.

Templates, notices, historical documents, save forms are always all part of the way that b businesses manage risk, consistency, speed, and compliance. So, you know, it's important. And I feel I can actually feel the frustration of the property managers coming through the social media channels at me. not at me, not directed at me, but I can I can feel it. I n I, you know, I saw an open letter written by a property manager.

Part of which is clearly uninformed. She doesn't understand the contractual deadline or any of that, but you know, she's venting because her business is hurting. She's probably hurting. So, you know, I f I feel that pain. And I think the REIQ does as well.

Kasey McDonald (15:43) Mm-hmm.

Yeah. Yeah.

Yeah, and look, I think you know, Antonia and the REIQ have definitely been open in their public statements to say that they have the support line there and they're wanting to do what they can to support businesses. And I also probably appreciate that line's probably full and there's lots of people calling in as well. So I you know, understandably, operationally and just practicality wise, it is really impacting because I'm

Peter Schravemade (16:10) Yeah. Well

Kasey McDonald (16:18) I'm feeling the pain having been a past property manager as well as to understanding sometimes the urgency of that. But back, you just made a point, Pete, about an open letter. so let can we dive into that?

Peter Schravemade (16:20) Yeah. Yeah.

Well, yeah, it and with regards to that op

yeah, with regards to that open letter, let's not mention who it's from or you know, the company is there, but i yeah, I did I did see an open letter addressed to the REIQ and actually PropertyMe. I'm not entirely sure. you know, maybe it is the integration with PropertyMe. It's pretty direct, but this property manager's raising concerns about missing templates, forms not syncing synchronising properly, missing RTA forms, slow loading and access errors. I've heard about this and

Kasey McDonald (16:34) Sure, yeah. I think that's fair. Yeah.

Mm-hmm.

Peter Schravemade (16:57) I believe An Antonia had addressed that to an extent, but forms generating with missing information, legislative notices failing to populate required tenancy information and administrative workload increasing. Now the claims were in an open letter and we're reporting that those claims are being made, but we're not making a finding about who caused the problems and we're definitely not saying who it sits with, whether that's REIQ, the new platform PropertyMe, an integration, migration or something else.

But her broader points important, she's not just saying that it's inconvenience. She's actually raised, and this is probably the only thing I agree with in that, in that open letter, is that it is a compliance risk. And that I think is the part that I'd draw the industry's focus on. if a property manager issues an entry notice, a breach notice, a rent arrears notice, or a tenancy document and the document's wrong, that property manager is the one that has to explain it to the tenant, the landlord, who they have the intro a fiduciary interest to.

The principal, the regulator or the tribunal. Now the tenant's not going to care about the in integration. The landlord's not going to care about or blame the API and the tribunal is not necessarily going to care that on the a 30 June a template didn't populate correctly. So, you know, that agency carries the practical risk and that's probably the issue.

Kasey McDonald (18:17) Yeah, I would definitely agree with that. And I think more broadly looking at that, it's probably the key here. So I guess in understanding that, you know, my next question to you, Pete, is w what from our view and certainly your opinion, what do we think agents and principals should be doing right now?

Peter Schravemade (18:24) Mm-hmm.

Yeah, I think they need to look at two separate things. So the first one is does the software work for my business? and we're looking at they're looking at that now. I think most people are looking at, you know, this is the first time Realworks was working on 29 June, it's not working now on 30 June. Does the software work for my business? So I think

You know, I'm not telling agents what to do, but I think you probably you've you're contracted to Realworks, I believe. I think there's ongoing contracts. I think you should probably be a bit a bit patient to see if that works out. I s I suspect it is. it is going to. I don't believe this is borderline across in a in a manner that hadn't been thought through despite the mess that is emerging.

The second question, this is probably the greater question that I'd throw at agencies and principals, because like I've seen a couple in the last few days. What legal documents am I actually using? Those are related, but they're not the same question. You don't select forms provider based on software. that is not your primary concern. You make I believe you should make a selection and forget the forms provider, the software. You need to make

A selection of the forms that you are using based on the way they execute for you. So forms are a tool, but you know, if you're using a form that a tribunal views as not legally correct, or if you're using a contract that doesn't stick, that's a problem. Like that's a that is a big problem for you. And so

First question is what software am I selecting for my business? The second one is what legal documents am I actually using? And so I think I'll draw from Antonia's public address on the REIQ social page. The REIQ forms are the indisputable champion in the industry. They've been developed over decades. They have an amazing relationship with the Queensland Law Society. they're familiar to the profession, they've been tried and tested through real world use in courts.

Now that doesn't mean that any other alternative is automatically wrong, but it certainly means that you're in it is it doesn't mean that another forms providers' forms are invalid, but it does mean that agencies and principals, if they're going to change from let's say the REIQ forms that we know are road-tested, court-tested, and have stood the test of time and continue, like there was only an update yesterday. So anyone not using the REIQ forms provider.

won't have that update already. They're already out of date. Those forms have already changed. It means that if you're an agency principal, you need to be very, very careful if you're changing forms pathways. It means if you're moving from one provider to another, don't just ask what the platform looks like, whether it's familiar, whether the subscription is cheaper. Those are all important questions, but they need to be asking who drafted these forms, who endorsed them. Have they been accepted by lawyers, conveyancers, lenders involved in transactions?

Kasey McDonald (21:22) Mm-hmm.

Peter Schravemade (21:50) Are they court-tested? What happens if a practitioner that we've sent it through to questions the form? What written assurances do I have? Have I received independent legal advice before relying on them? And that the in to be really specific, I'm gonna state that's not an attack on any provider. That's just prudent business. If you are a real estate agent in this state, you really need to investigate that fact.

Kasey McDonald (22:14) Yeah, absolutely. And I think it actually does draw as well to some of those questions and complaints we are seeing through the social platforms, where a lot are saying that they have made the change. And again, that's totally fine to do so. But now they've have realized, now I've lost all of those additional special terms for the tenancy agreement that the REIQ through Realworks provided to us that we now we know are tested in a tribunal.

Peter Schravemade (22:35) Mm-hmm.

Kasey McDonald (22:42) Now we don't have those. So now what do we use? And that's some of the questions that are coming out through some of those channels. So I think it's actually a great point to make is that you need to be asking those additional questions. Look, you know, change is hard and a lot of change all at the same time obviously makes this, you know, even more impactful and more challenging in our businesses. But I think we just need to take a little bit of a step back here and understand.

Peter Schravemade (22:57) Yeah.

Kasey McDonald (23:09) Are we making those right choices for the future state of our business, not just for what we need to get done today, right? Yep. Yeah.

Peter Schravemade (23:15) Yeah, yeah, I believe so. Yeah. I th

I think I think that's super important. Mm.

Kasey McDonald (23:20) Mm-hmm.

And, you know, look, I've certainly heard and have also had some calls as well, just that they're seeing many people are seeing reports floating around that some forms may have issues, that maybe there are some things missing. so have you heard about anything on that side?

Peter Schravemade (23:43) Yeah, and I have to be really careful with this. I think we have to be we've heard private concerns in the industry. There have been private concerns raised, but unless those concerns are put on record or supported by legal advice or responded to by relevant parties, I'm not kind of comfortable airing that you know, what the concerns are in public. and I'm not going to say that a form is invalid. I'm not going to say that a contract is defective. what I will say is Queensland agents now

Kasey McDonald (23:48) Mm-hmm.

Peter Schravemade (24:13) appear to have more than one forms pathway being marketed to them. And that means that principals need to obtain proper independent legal advice before deciding which documents their agency will rely on. That's my that's my practical and safe advice. changing software is one thing, changing the underlying legal documents used by your agency is another. So please, please, please, please, please, before you sign a contract or any form around any of this software,

you know, investigate the forms and the documents that are there, get legal advice. Hmm.

Kasey McDonald (24:46) Yeah, absolutely. Totally agree there.

But I think as well, what we've seen out of this is that it's a bigger, broader industry issue, not just I guess an REIQ versus a Dynamic Methods in kind of play here, right? It's an actually a bigger story.

Peter Schravemade (25:00) Yeah.

Yep. Yeah. And that's the real story. It's not just REIQ versus Dynamic Methods. It's not Realworks versus Forms Live. The biggest story, I think, is the real estate industry has become so dependent on technology infrastructure that agencies don't control. Like, you know, a lot of a lot of people are calling me up going, What do we do? And I'm like, Do you do you have a PDF contract in play? And a lot of them a lot of them didn't have it. So, you know

Kasey McDonald (25:04) Yeah. Correct.

Peter Schravemade (25:26) That stuns me because you can still download that off our, you know, off the platforms that they're there. You can still get that and you can take the software out of the play, use the contract that you know works, and you can fill that out manually. So, you know, if you're in the scenario where you don't know what to do, and again, I don't think it's the completion of the contract or the form that's the issue. It's the software has enabled speed and process. You know, I spoke to one

property management company yesterday that had actually written APIs to work with Realworks that every single bit of information that was needed would be quizzed from a landlord and spat into that platform, which would then generate the tenancy agreement or the form six that they would sign. And then that would generate, you know, there were all these forms that one would come after the other after the other, eventually leading to a contract. And so

I think the biggest story is that the real estate industry has become so dependent on technology that agencies don't control. And for years, you know, agencies have been encouraged to digitise, automate. I've been part of that, integrate. I've been telling everyone do it online, move everything into platforms. It delivers huge efficiencies. We and we're actually seeing what happens when those efficiencies are taken away. But it has created a dependency. You know, where are your documents stored? Can you export them?

Can you access your templates? What happens if your provider changes? What happens if an integration breaks? What happens if your statutory notice does not populate correctly? What happens if a contract platform changes on the same day as end of financial year? What happens if a business relationship b between two providers end? You know, th these are no longer theoretical questions. We can see them playing out live, you know?

Kasey McDonald (27:13) Yeah, absolutely. And I think the key as well with all of this is that it's happening at the same time as AML and other compliance pressures are landing in our industry.

Peter Schravemade (27:24) Mm-hmm. Exactly. The irony. You know, we've been preparing for AML/CTF all the way Ailong. and thank God we did that. Can you imagine the mess now? But a agents and property managers are now being asked to carry more compliance responsibility than ever. and you know, AML's coming in, privacy obligations are increasing, cybersecurity expectations are increasing. I was only talking to Peter Lynch from Aeon about that yesterday.

Kasey McDonald (27:27) Mm.

Peter Schravemade (27:50) AI is entering the workflow, consumer scrutiny is increasing. And at the same time, some Queensland agencies are saying, you know, the very system that they rely on for forms and statutory notices become harder to use during the transition. And that's probably why this story matters so much. It's not about inconvenience, it's not about operational resilience. forms are a critical to infrastructure. Transitioning involving forms kind of needs to be treated.

like critical infrastructure changes. And that means proper testing, proper migration, planning, clear communication, exportability, data portability, support capacity, contingency planning and you know, realistic timelines. So I you know, and I'm not suggesting for one minute that the REIQ hasn't done that. I believe they have planned for this as best they can. you know, I the I think it's been quite obvious that this has been coming for a while, but it's still caught people napping. And I suspect that's had to do with the constraints around their ability to talk about it.

Kasey McDonald (28:53) Yeah, look, you know, and I know we all went through COVID in 2020. And if I kind of go back to the piece around the dependency on digital, remembering back then, you know, we were heading into the officers and we were printing and we probably, whilst evolving into digital, we probably weren't as dependent on it, right? COVID then also supported that, that shift. And now we've all gone

Peter Schravemade (29:02) Mm.

Kasey McDonald (29:20) full digital and then we haven't ha got the capabilities to do you know you know the printing or exporting those documents because we've totally removed away from that. So I think, you know, my last question probably for you before we move on to our next few topics of the morning is what's the fairest way that we can sum up this matter today?

Peter Schravemade (29:22) Yeah.

Yeah.

Well, totally understandable that the REIQ would want control of its forms infrastructure, particularly after the ACCC raised concerns about what could happen if Dynamic Methods sold to anyone, but particularly REA Group. It's also understandable if agencies are frustrated. historical forms, templates, workflows, not available on day one. those two things can be true. Like a strategic decision can be justified and the execution be can s still be very painful.

Kasey McDonald (29:51) Mm-hmm.

Peter Schravemade (30:11) Look, there's a couple of things. We shouldn't make legal findings we're not qualified to make. We shouldn't speculate about contracts we haven't seen. We shouldn't repeat off record allegations as fact, but we can absolutely say how this is exposed important forms infrastructure to the day, you know, is to the day-to-day running of a business. and for the principals out there, my message to you is simple. Don't just ask whether the software works, ask whether your forms templates

Historical document documents, integrations, compliance workflows are safe, accessible, and have been properly advised upon. Because if your business relies on those systems, they're not just admin tools. That's actually part of your risk framework. And I think we can probably leave it there and move on to our next story, do you reckon Kasey? I just I hope there's something of value in there to the to the average agent, property manager, and principal. And like I would urge

Kasey McDonald (30:56) Yes.

Peter Schravemade (31:05) A bit of patience through the process, especially for those on Realworks. Like I'm hoping, just like the REIQ, that this resolves itself, you know, in the coming days. but also the other thing I would say is if you're a member, if you're a member of the REIQ and a user of Realworks, pay attention to the social media messages that Antonia Mercarella is sending out there because she has never, in the history of me knowing this woman, she has never been backwards in coming forward, acknowledging fault when it's when it's their fault and been

forthright and upcoming you know upfront with the users that are there. And I know that a lot of people listening to the podcast will know exactly what I'm talking about. she has fallen on her sword when she needs to. And I at the moment I am sitting here saying to you, I think your best bet is to hold out if you're still an R Realworks REIQ member.

Kasey McDonald (31:55) Yeah, and I agree with all that. And the key thing for me, absolutely, is the patience. I think let's give it a give it a chance, everyone listening. take the time, do your research. And if at the end of the day your decision is to move providers, please just make sure that you're asking those questions. But story number two for today, Pete. The property industry confidence falls to its lowest levels since.

COVID, the biggest national property industry story that we have seen for the week. And some of the key points, the latest property council survey has confidence levels at a 92 index point. It's below neutral and reportedly the lowest level since the pandemic lockdown period. the industry is linking the fall to the proposed budget tax reforms.

Higher construction costs, labor shortages, capital and debt availability. But I think the important point is not just the sentiment. I think the confidence affects where the projects are getting financed. And I have seen that some developers are saying they're not getting approvals through as well. and that of course they are the developers are pausing because of that. And I think investors are pausing too. So do we think that this is industry just complaining or

Peter Schravemade (33:12) Mm.

Kasey McDonald (33:22) Do we really think s the confidence now is starting to affect the housing supply?

Peter Schravemade (33:28) No, I it is definitely confidence. Like, yeah, I mean I there's no one I'm speaking to that doesn't say it's that. It's only the treasurer and the Prime Minister saying that it's not there. And it that's quite unbelievable to me. Like the fact that they didn't expect it or didn't see it coming. but you know, we've sat around prior to an election saying, For the fiftieth time, I'm gonna tell you these things are not happening. We've yanked the rug out from a bunch of people, like the you know, and we've got more stories on this today.

Kasey McDonald (33:31) Mm-hmm.

Mm-hmm.

Peter Schravemade (33:58) We've pulled the rug out from a bunch of people and now we're sitting there saying you know, there's plenty of confidence in the industry. That's just not how it works. Like that's not how life works. If your girlfriend cheats on you, do you go, no, there's nothing to see here. There's no confidence issues. We've got a an excellent relationship of trust. I don't I don't think that's the way anyone operates. And so I, you know, I'm struggling to understand and wh why this is even a conversation. I think

It is pretty fair enough for the industry to go, like this is now a toxic relationship. It really is. where so many things have lined up and changes have been made. Like you think it can't get worse. Then they do a deal with the Greens and superannuation gets kind of and now I can't invest using my superannuation account. Like it the it's almost like a bad gift that keeps on giving. You keep finding out an on a later date there's another problem and there's another problem, and there's another problem. And

If you stack that up and you're a developer out there, I'd almost be looking for another career. Like I and we had so many we had so few of them. We had so few builders. we were already at a really chronic shortage. And you know, I just don't I don't know what to say, but it definitely is definitely is a confidence issue. if you're looking at doing a development, you just want kind some kind of surety.

Kasey McDonald (35:03) Mm-hmm.

Peter Schravemade (35:25) You're putting all of this money and a large portion of your life time on the line while this gets built at great risk to you. If the plans change, if the they decide, like let's say the government decides we've taken so much of a beating on this, one nation has come through the roof, we're on the nose so much, we'll reverse it. N there's no one here that could actually say that they won't do that. That it's crazy. Like we've

Nobody knows what the heck they're going to do because they there is no surety in what they say they will do. There's no we can't take that to the bank and trust it. So, you know, I c I completely I completely get this. I think it's difficult and I think it ties into the next story as well, where we're seeing Queensland dwellings are falling by nearly nine percent, right?

Kasey McDonald (36:17) Yeah, absolutely. The ABS data showed that in May they fell approvals for new dwellings fell eight point eight percent, and the national approvals fell 1.1%. So the rate in Queensland, you know, is falling at a significant rate. so you know, we're the weakest nationally for total dwelling approvals. And I think, you know, we've got a target here in Queensland.

Peter Schravemade (36:36) Yeah.

Kasey McDonald (36:45) To have 1.2 million new homes built. And I'm not sure that it how we're gonna get there if the approvals are falling lower, right? The competition's under pressure. yeah.

Peter Schravemade (36:53) Yeah. Well with a we're the second fastest growing, I think. We're the second fastest growing

behind New South Wales and Sydney, which is always traditionally the first. But you know, one point $2 million homes is the target. I think you know, it comes back to the confidence thing that we were just talking about. Approvals are only just start of the pipeline. But, you know, it w what we're hearing is that dwelling approvals have fallen nine percent. So right at a time where, you know, the

Kasey McDonald (37:08) Mm-hmm.

Peter Schravemade (37:25) Again, the whole idea of the budget was to get investors buying new homes. they can't buy new homes if they can't buy new houses if the houses are not being built. And the houses won't be built if the approvals are not in play. So we're having the approvals falling. We've just come from something saying, you know, the developer's confidence is not a vibe, it's falling as well.

Kasey McDonald (37:29) Mm-hmm. Yeah. Let's get first home buyers into the market. Let's build houses. But yeah.

Peter Schravemade (37:51) look, it's stacking up to be a perfect storm for the treasurer and for the prime minister and the Labor Party in general. I

Kasey McDonald (37:59) yes, well, I'd like to see if Mr. Albanese will be in Parliament for much longer or the Prime Minister of our country.

Peter Schravemade (38:07) Well the thing is he's got a he's got it he's

got another two years, doesn't he? He's got another two years. I'm he's hoping that this turns around, right? That I think I think that's what it is. Hmm. Well, I've

Kasey McDonald (38:11) You know, maybe I think I think he's hoping that, but I'm not too sure that it's going to, 'cause it's definitely

just going backwards faster. the lies that are coming out.

Peter Schravemade (38:22) Have you ever lived in a period

have you ever lived in a period where the si the incumbent Prime Minister, who was rightfully elected to his gig, has been more on the nose than now?

Kasey McDonald (38:33) No.

Peter Schravemade (38:35) I can't remember one. I remember when John Howard ditched the guns and I know he was unpopular there. I remember the vitriol. I lived in a regional area where there were guns and I remember that. That was there were people angry. I think some people would point back to another prime minister that was I think he was sacked by the governor general in the end. I can't remember which one it was. I should know that, but that might have been the benchmark, but

Sitting right here and right now, I in my living memory, which is approaching fifty years, I can't I can't remember a less popular Prime Minister than the one that's sitting at the moment.

Kasey McDonald (39:15) Mm-hmm. Yeah. And I think it just comes back to, you know, what we were told and from that, you know, I guess in their campaigns at the beginning and why you should re vote me back in, and this is what we're going to do to now the position that we're in. you know, everything, everything has been a lie, really. And I guess again, it comes back to you made the point before about self-managed super funds.

Peter Schravemade (39:34) Yeah.

Kasey McDonald (39:41) And so that's kind of leading into our next story because again, that was a piece that wasn't going to change and it is now changed. And the borrowing ban on that, right? So

Peter Schravemade (39:45) Yeah.

Well, well, before we move into that, maybe next week we should get a dyed-in-the-wool Labor voter in here to tell us why. Because like, you know, we are only presenting I d I d really don't want this to be a political forum. Just if you're listening, we're not saying don't vote Labor. I mean a lot of the property professionals out there are probably going to be that way inclined after what's happened. But you know, maybe we should be getting another perspective on it and getting a dyed-in-the-wool Labor voter to come in on here and tell us about the fantastic things.

Kasey McDonald (39:57) Maybe, yeah.

Peter Schravemade (40:20) Just in case we're missing something and to not sledge without the chance of representation. I did offer the opportunity to Mr. Albanese and Jim Chalmers to come on board, but they haven't responded to my emails yet.

Kasey McDonald (40:31) Right.

Yeah. Well, you know, look, yes, my comment before was my own personal view, to those listening today. Yeah, yeah, yeah.

Peter Schravemade (40:36) Yeah. Yeah, that's right. Well, and yours and yours and a lot of other people as well.

But you raised the SMSF, the su self-managed super ban and you know, there's a disputed four thousand loan estimate, right? So talk me through this.

Kasey McDonald (40:46) Yes.

Mm-hmm. Yeah. Like,

yeah, So they've come out and announced that there's only 4,000 new SMSF borrowing arrangements that can occur each year on average. they've also indicated that industry groups and project marketers, well, sorry, they have indicated that understates the entire role of what a self-managed super fund well the investors within that play. developers are then sort of saying, well,

That supports them with projects, pre-sale hurdles, construction finance. So it's kind of a bigger play here. It's not just the say the likes of you and me who look to do that through our self-managed super fund, right? Like it's not just that play here, I think, that maybe us as a whole haven't I guess, heard about. So you know, talk me through that, Pete, because you're probably across that a little more.

Peter Schravemade (41:34) No. No.

Yeah.

Yeah, well it's an interesting question because it's not like, you know, is it investor privilege or is it about getting projects out of the ground? And the problem for the government and the announcement that's come on the back of the Greens trying to get the bills through the Senate is that it's not as to whether every self-managed super fund buyer should be protected. It's about whether new sh new supply that's coming through the ground should be treated differently from established housing. And that's the real issue. A lot of the developers are saying

Kasey McDonald (41:54) Mm-hmm.

Peter Schravemade (42:17) You know, we actually had a section of our development that was allotted to self-managed super fund buyers who are now no longer part of the market. Because what they need, the type of asset and the returns that they need on that asset is different from if I was buying in my personal entity. So effectively what the market is saying at the moment is like the government's saying nothing to see here. There's still another

you know, a whole way that you can go about investing in your self-managed super fund, but the industry's actually turned around and go gone the pretty much the largest one, not only have you taken that away, but you've taken that industry away. So, you know, let's say this goes through and it passes and it hasn't passed yet, but it goes through and it passes. Are developers in the future going to look at self-managed super fund lending to be part of their stock? And they probably won't. That won't be factored in.

And even if it's then turned around in two years, the damage that has done to the industry in order to gear up and get going, I think, I think that's very, very difficult. And it links back to confidence and approvals. If you remove capital from new housing, what have you got to replace that? What can people invest in that's different in their self-managed super fund? And I'm asking myself that question right now. You know, I disclosed last week that I was about to purchase in my self-managed super fund.

When he when the deal was done with the Greens. And obviously that's ended, you know. And behind me, there's a mortgage broker who is going to get finance and trails on that. And behind him, there is a developer who had a self-managed super fund asset in that he had created. And behind that, there is a builder and a bunch of tradies who were building that asset. And behind that, there was somebody, there was an architect, there was somebody getting approvals. There was

You know, a town planner who had to look at it and this knock on effect. And at the end of that, I turn around and go, Well, I've got a self-managed super fund, which I'm paying an exorbitant amount for each year to keep. What do I invest in now?

Kasey McDonald (44:18) Yeah, that's a great question. you know, and again, maybe in the next few weeks we should try to see if we're able to get someone on who could potentially answer that question for us. Cause I think there's many of us that would like to know the answer to that. Yeah. Yeah.

Peter Schravemade (44:32) Yeah, good one. Yeah, that's actually not a bad idea. And then maybe

I can I can get some c clarity as to where I need to sync myself management fund money.

Kasey McDonald (44:39) Yeah, exactly.

How do we how do we spend Pete Schravemade's money? Okay, everyone, that's what we want to know next week on the show. Yeah.

Peter Schravemade (44:44) God help me. God help me if you get involved

in that. Jeez.

Kasey McDonald (44:49) But I think another, obviously, another big story in our industry that we have been talking about for weeks and weeks and weeks and weeks and weeks. Right? It's number five on the list. There's obviously bigger things that are coming out and everyone's talking about, right? All of the drama. Yeah. Absolutely. But look, it's the biggest operational compliance change in years for the real estate industry. We all know that as of the 1 July.

Peter Schravemade (44:54) Yeah. How has this been overshadowed? How has this been overshadowed? How is this number five on the list today?

Dramas. It's more drama than more drama than Summer Bay at the moment.

Kasey McDonald (45:19) Real estate professionals were brought into the AML/CTF regime for designated services. So right now, property management's not in that, but that's not to say it's going to happen, guys. and we all know this is not just about asking for a driver's licence to prove who that person is. There is systems around due diligence, risk, record keeping, staff training, suspicious matter escalation.

Peter Schravemade (45:32) Mm.

Kasey McDonald (45:45) there's higher risk transactions that are going to require more questions around the sourcing of funds and the source of wealth, but the role of the agent is changing, right? It's n you're not a transactional facilitator anymore and you need to understand what this crime detection framework actually looks like. And I think it ties back to the real work story a little around that compliance risk and you know, and those frameworks that we're choosing. So, you know, do we do we actually think, Pete, that

Peter Schravemade (46:08) Yeah.

Kasey McDonald (46:14) Most agencies have really understood what this change means for them and are were they actually ready for it?

Peter Schravemade (46:24) W well I think the agencies who want to be ready and who actually engaged are and I know that, you know, you were speaking to one last week. completely ready, you know, all our ducks in a row. There have been there's been enough information out there and you know, as I mentioned last week, I tra I've traveled through four states, four major states.

Kasey McDonald (46:34) Mm-hmm.

Peter Schravemade (46:50) They're all talking about it. Every single real estate institute, if you're attached to one of them, has been not backwards in coming forwards in saying, here are your obligations, here are the things to do. So I think if you're switched on and you're active and you're engaging with your peak ethical membership body, you should be in a pretty good position. But there are people who will not have heard anything about this.

Kasey McDonald (46:58) Mm-hmm.

Peter Schravemade (47:19) There are people out there who Yeah, like I saw I think it was only six months ago when I would did my real estate course, I did it under an act called the Property and Motor Dealers Act. do you remember PAMDA? That is what it was called. Yeah. last six only six months ago, I was handed a an appointment to act. I can't remember what it was. Was it called a 32A or

Kasey McDonald (47:34) Yes, me too. That's a nice yes.

Peter Schravemade (47:48) whatever that document was, I was handed that by an operational agent to list a property. And yeah, and I couldn't quite believe that. I couldn't, you know, as I for the people who are not in Queensland, the Property and Motor Dealers Act was 2001, I think. It was we've got a we've had a property occupations act since 2014, if I'm not mistaken. So it's been in for twelve years.

Kasey McDonald (47:54) Really? Well

Peter Schravemade (48:15) Somebody handed me an appointment to act under the previous act, which is now defunct. It's been replaced with another one. So, you know, there are still some agents out there who will not know a single thing about AML/CTF. They won't know what to do. They won't be doing it. And I think, you know, I really feel for those people. I don't know how they operate a business. I don't know how they don't get sued. But I, you know, I will say that.

you're lot more likely to come across these in far-flung places in the state. where it's not as easy for them to get, you know, communication. Although with the interweb being what it is these days, you would think that's not so much of an excuse anymore. But the majority of agents, I think, are going to treat AML like a checklist. Technology is going to solve this for us. We're going to

Just get a service provider in and we're gonna check all the boxes and they're gonna do everything. The smarter agencies, the actual operators in the industries are gonna treat this like a new risk framework. And again, I was talking to Peter Lynch from Aeon Insurance, and his real message out there, he's about to release a statement with the jointly with the REIQ. And Aeon's also involved in all of the other states. And I know I was in South Australia, Kane Cook and was talking about this.

And of course Jacob Kane as well, the R E I A and R E I V president was there and he was saying the same thing. Whatever you do, don't treat it as a checklist. You know, treat it as a new risk framework. And Kane even went one further. He said, Look, if you're a professional, I know this is an inconvenience. I know that this new round of legislation and regulation is something that none of us wanted. but it's here now.

And he said if I was still operational today, I would treat this as an opportunity to demonstrate my professionalism to another level. This is why we have to do it. This is why I have to be. This is what distinguishes me from the riffraff out there who don't know what they're doing with it and haven't ha and haven't covered that. You know, yeah. So and I felt that was a really refreshing way of looking at it. Yeah, look, I mean, here I am telling a bunch of Queenslanders that they can't get their forms at the moment. So I acknowledge things in the industry are not

Kasey McDonald (50:18) I love that.

Peter Schravemade (50:32) are not fine and dandy and it's easy for me to sit here, not operational anymore, and say to you guys, you should just be treating it as a as an opportunity to be more professional. There's a difficulty associated with that. But the agencies that we've met between you and I, I know we've talked about this, they are definitely treating it like that. This is an opportunity to shine. This is why we're going to be, you know, this is what will set us apart from Joe Bloggs' fish and chip store down the road, who are also selling contracts on the side. So

You know, I th I think that's the way I would approach it. I think everyone that has been engaged should be aware of it and should at least know where they're sitting at the moment.

Kasey McDonald (51:14) Yeah, great point. absolutely loved the sentiment there around how we, you know, need to look at it from that professional standpoint as well. but I you know, we're hearing about compliance, we're hearing about so many things changing. And another that has hit the headlines,

Peter Schravemade (51:31) Well, I've heard not I've heard

I've heard nothing about this in real estate land. This one actually s yeah, this scares me. I know this yeah, this one scares me a bit more. Like actually, I think it should probably be bumped up the list because we've been hearing about AML/CTF for what, six months, twelve months now. this one, I haven't heard a single real estate commentator talk about this.

Kasey McDonald (51:36) No, nothing in real estate land, but obviously we've seen it through other means, right? But not in our industry.

Yeah.

No, it's the ACMA SMS sender ID and spam compliance change. So I don't know, maybe. Well, maybe I'm not too sure actually. But ri what it is a branded SMS sender ID needs to be registered. So your unregistered branded SMS will appear as unverified.

Peter Schravemade (52:03) Tell me what that is, Kasey. Ac ACMA? Is that is that is that pimples?

Kasey McDonald (52:23) So it's like when we're sending open home reminders, those inspection notices, rent arrears messages, those types of SMSs, the compliance around your sender ID being registered versus unregistered and unverified is what's coming into play as a part of this. So the responsibility may sit with the agency, CRM, or the SMS provider. Like we're not sure, right? Because we haven't seen

Peter Schravemade (52:52) Yep.

Kasey McDonald (52:52) much being disclosed about what's required within the real estate landscape. but, you know, if we're not hearing much about it, and I think you and I are across a lot, that happens in our industry, I'd suggest that many principals also don't know what this is or what they need to do.

Peter Schravemade (53:09) No, exactly. Yeah. And I and I will add to that, like it does have implications. So I think I am contacted at least twice a month about an investment property that I have on the Gold Coast. people and I'll put this in real terms for you guys. There are a lot of you out there using ID for me, like a kid in a candy store. You're just going and getting people's details. I'm on the I'm on the Do Not Call Register.

Kasey McDonald (53:14) Mm-hmm.

Mm-hmm. Yeah.

Peter Schravemade (53:37) does that mean that Kasey can't call me? No, she chooses not to. But mostly Kasey will call me when she needs to or when she absolutely is desperate. I will get a phone call from Kasey going, Hey Pete, what about this? But I am on the Do Not Call Register. There are there are agents on the Gold Coast who are regularly getting my landlord details from ID for me, and then they're sending me

Kasey McDonald (53:59) Mm-hmm.

Peter Schravemade (54:05) Text messages that I don't want to receive, SMSs that I don't want to receive, they come under this act, the ACMA, which is the communications register, and SMS sender ID and spam compliance. So what this is saying is that from 1 July, if you're going to be sending that to me, you need your number to be registered to start off with, or you need my consent. and I think the thing that we haven't picked up in this article, and I'm actually looking for it now.

Is that the penalty for noncompliance has lifted. It's now higher. I'm just actually searching for it now. and I'll see if I can come up with that before the end of it. but I know that the penalty for failure to do this is much higher. So there are a couple of things. Let's start at the beginning. If you're sending out notifications to let's say a tenant and you've used SMS to do that in the past, you just have to get that number.

Kasey McDonald (54:41) Mm-hmm.

Peter Schravemade (55:04) registered or verified. That's an important thing. That shouldn't be a drama. But I think the bigger one is you know, what do we do when we are cold outreaching somebody? And I actually I actually don't like cold outreaching by SMS. It wouldn't form practice in any of the agencies that I'm in. But I'm aware that a lot of the agencies out there actually find it really, really useful, especially people between 18 to 25. That's how r they respond. I know

Kasey McDonald (55:27) Mm-hmm.

Peter Schravemade (55:32) Andrew from Flick It Over uses SMS to do these to get tenant agreements signed in a way that's super efficient and fits in with 18 to 25 year olds. So there's definitely an avenue there. There is defin this is a reasonable medium, but what they're saying here is those laws of change come 1 July, and I don't think many people in the industry have even looked at it.

Kasey McDonald (55:57) No, and look, you know, I think to the point is that there's th the key thing here is that who may the responsibility lie on, right? So you've got the likes of Andrew from Flick It Over, you've also got a product from Cotality product called RiTA that sends SMSs out. you know, so is it going to be on them as the provider to do it, or is it going to be on you as the agency who actually subscribes to that service to have to have registered a number?

Peter Schravemade (56:26) Yeah, that's a that's a very good question. Actually I haven't looked into that, but I know that ACMA are out there making examples at the moment. So sports bet's been hit for $3.7 million in penalties. the Commonwealth Bank got $7.5 million for repeated spam breaches. DoorDash got $2 million. the maximum court penalties under the Spam Act are $626,000 per day for a company with no prior records, so that's your minimum.

$3.13 million per day for repeat offenders. I knew they were big. I didn't know how big. So real estate agencies now should be asking vendors, is our branded sender ID registered? Is it registered? Are our marketing SMS compliant with the Spam Act? Does every SMS include a functioning unsubscribe? That's really important. Have we documented consent?

And which systems are sending messages on our behalf. I think they're the most important ones that I would take to the market in this particular instance. But just as a general method, it might be time to have a chat amongst your office about what your policy is on cold outreach as well.

Kasey McDonald (57:40) Yeah, absolutely. And I don't just think on SMS, I do think on calls as well, because I received one in relation to the house that I own and live in and called them back and said obviously no, we're not interested in selling. And I just asked the question of can I just ask where you got my number from? Because I've actually never dealt with that real estate office at all. And she said, I'm not too sure. We have changed brands. And I said, But regardless.

Peter Schravemade (57:46) Mm.

Not too sure. I've

heard that before. We've adopted another we bought another rent roll.

Kasey McDonald (58:11) Regardless, like

yeah, it doesn't matter. How did you get my information? Cause I've not ever dealt with your business before, regardless of whether or not you've changed brands. So can I ask, yeah, what consent have you received? And she and the response simply just was, I'm not really sure. I could call you back if you really would like to know. Yeah, no need to call me back. Please remove my details from your system. So I think it's, you know.

Peter Schravemade (58:22) Well what consent? What consent yeah.

Yeah.

Kasey McDonald (58:39) Those that are listening today, really, really important that regardless, we're looking at our outreach programs and we're understanding what levels of consent that we've got.

Peter Schravemade (58:48) Yeah, I had I had one on the Gold Coast where I was called by every new staff member for more than three years, even though I asked in the first interest in now they already had the initially they had my consent. This was a former property management business that had changed hands. And so the new s the new person came in and said, have you considered renting with us? And I'm like, Yes, I have. I used to do that in the past. I'm not and I'm not coming back. I found a really good property manager. Thank you. Please don't call me again and remove my number. So that should have been dealt with then.

But for the next three years, every three to six months, I would get another call. In the end, I actually had a conversation with the principal and I said, Hey mate, you might want to get across this because if it's not just me and if it's five, five other people rather than report it. By the way, that's not under though phone calls is not governed under that same act. That's a different one. So just for clarity, if you're looking for the act, that won't be under that. That's a specific act governing written communication.

Kasey McDonald (59:37) Mm-hmm. Yeah.

Yeah. So leads us to one of our next stories in regards to the market mood. And I certainly have seen many articles across the last few weeks that are talking around, you know, buyers becoming more cautious. obviously developers are being selective as well. And we're seeing that potentially Brisbane is normalizing and kind of balancing out. So I think we've obviously seen some heat.

Come out of particular markets. And I last week we spoke about Sydney and Melbourne prices coming down. But it's not being described as a as a crash in the market. It's being described as a balancing, you know, normalization around the pricing points, right? So we're seeing Sydney agents are reporting buyers are just taking longer, they're getting fewer bidders, more conditional offers are coming through. we've seen

Peter Schravemade (1:00:26) Yep.

Kasey McDonald (1:00:38) videos through the news around Bridget Brisbane agents that are sort of saying things are starting to normalize. There's less FOMO out there. There's more negotiations happening. And developers are also saying that buyers have not simply disappeared. They're becoming more selective, right? So I think we're seeing probably less urgency, I think. Would you say that our buyers are probably, you know, pulling back, behaving rationally, being a little bit more patient.

Peter Schravemade (1:01:06) Well, let's start with the fact that they're still there. The buyers are still there. So our supply and demand issue has gone nowhere. We haven't miraculously built another what was it? The previous article said 1.2 million dwellings. They didn't no one wa Jim did not wave a magic wand and make those things appear. So the buyers are definitely there, the buys are definitely there. But like you have a think about it for a second. If you, you know, if you're

Kasey McDonald (1:01:09) Mm-hmm.

Two million now. Yeah.

Bloody hell, Jim. What's wrong with you?

Peter Schravemade (1:01:36) your children were ready to purchase and maybe there is one of them there that is ready to purchase. In your right mind right now, would you tell your child to go looking for houses in this market right now?

Kasey McDonald (1:01:49) depends where. But I probably would encourage, like I would obviously start to say that it sometimes there's no good time to go into the market, right? Like and it sometimes it's about taking the risk to get in, but that's me. I'm a bit of a risk taker in that sense. But I would still encourage look, understand it. but depends where.

Peter Schravemade (1:01:52) Mm, good point.

Mm.

And

here I think it that's a it's a good it's a good example because you'd say yes, I would say vehemently no. Not like I wouldn't even tell to look at a particular area at this stage, although Melbourne units are looking very, very cheap at the moment. But there's always opportunity in every market. I do agree with that. But you know, knowing that my daughter could be looking for a property in the Gold Coast region.

Kasey McDonald (1:02:26) Yeah.

Peter Schravemade (1:02:38) There is absolutely no way I would I'd actually tell her to No, I'd be telling her to sit on her hands for the time being. And there and it's not just about opportunity or is this a great place to buy. It's we've just it's what I said before, we've just had the rug pulled out from under us. We last election were told one thing, and I think Dave Hughes has summed this up. If any of you are watching the comedian Dave Hughes out there, he's really

Kasey McDonald (1:02:41) I wouldn't encourage that.

Mm-hmm.

Peter Schravemade (1:03:04) Rank. He is ropeable. He's a dyed-in-the-wool labor supporter who has just lost it, is the way I would put it. Some of his some of his ranting actually makes me wonder whether somebody needs to do a welfare check poor Dave Hughes. But he's basically saying that you told us that this would be the way it would go. You even gave our first home buyers, and he's referring to the government, the federal government, you even gave them five percent to get in and buy a house.

And now in his state and in other states, those properties have dropped and those people are holding an asset that they owe more money on than what the asset is worth. So if they bought it at a million, they now you know, it's now worth nine hundred thousand or nine hundred and fifty thousand. They've lost fifty grand or a hundred grand in there. Some of them have lost even more than that. And so you know, from that perspective, you just think about the purchases that aren't going to purchase at the moment.

Can I do I want to buy an investment property? No, I don't. I don't know, you know, what's going to happen next. I don't know where that's coming from. Am I going to buy in my self-managed super fund? We've already addressed that. Well, I can't. Thank you, Greens. I can't. Thank you, Labor and Greens. I can't do that now. I can't buy in that self-managed super fund as I had planned meticulously for six months. the buyers are still there. They're just not purchasing right now because the confidence has been shot, right?

Kasey McDonald (1:04:12) Yeah.

Peter Schravemade (1:04:31) So they're not behaving as though the property is going to disappear if they blink. And that is a key difference because, you know, that's affecting the auction clearance rates. You turn up you turn up to an auction and the people aren't you know, the everyone's probably happier to sit where they are, but make no bones about it. There are still people like every community forum, there are so many people looking for rentals at the moment. And that's the really sad side of this. I'm seeing every day in my region.

Kasey McDonald (1:04:41) definitely.

Peter Schravemade (1:05:01) somebody post, you know, we're a family of four with you know, two of two adults, two kids, just let's say it's that and we've got a couple of pets, we've got an excellent history dating back 10 years and we can't find a property and we need to move next week. And I'm seeing so much of that. It's just it's just nuts. So to say that buyers are no longer in the market, it would be an absolute joke. They are there. They're just not behaving like I'm gonna miss this. So I'll jump now.

Kasey McDonald (1:05:30) Yeah, and probab

they're probably just not behaving like the Labor government thought that they would by them implementing these changes, right? They just sort of immediately, all of a sudden, ever all these buyers are gonna have this money to now go and buy homes. and that's not the case whatsoever.

Peter Schravemade (1:05:36) Exactly. That market Yep. Yeah.

Yeah, it's crazy because like their end goal was to make the property prices drop. They actually said that as part of their budget. They have dropped and people aren't buying. So you're like what like they've dropped in key areas and still people aren't buying. And they're not buying because there's no certainty, there's no confidence, there's no surety.

Kasey McDonald (1:05:53) Yeah.

Yeah.

Yeah.

Yeah. And look, obviously we've got key markets that are still increasing in value. We've got, you know, obviously the Queensland, Brisbane market in particular, Perth market, Northern Territory. You know, there's, I think, even the Adelaide market is certainly still increasing, but not at the levels as to what they were, right? So they have started to drop, but we are still seeing still some growth within those marketplaces. But

Peter Schravemade (1:06:19) Hm. Yeah. Yep.

Kasey McDonald (1:06:31) Yeah, the buyers are watching. But, you know, if it was me and I do look every now and again, depending on where it was and the price of the property, I don't know. I'm I might buy. Yeah. Okay. Yeah. Sure. No problems. Absolutely. Maybe not as an investment though. Yeah.

Peter Schravemade (1:06:41) Yeah. Yeah. All right. All right. I'd like to see that. I we're gonna come back to I'm gonna fact check you on that six months and say, I'll find you the opportunity. I wanna see you purchase.

Okay. Righto. You're gonna move into the house next

door to me.

Kasey McDonald (1:06:59) Yeah. that would be fantastic.

Peter Schravemade (1:07:02) Yeah. Well your husband would think so. Just gonna duck over to Pete's. See ya tomorrow.

Kasey McDonald (1:07:04) Ha

Yeah.

Yeah. Yeah, well that actually would be the scary thing because that's exactly what would happen. Where are where are you? I'm just next door. Are you camping out? Yeah, absolutely. We've had a few too many beers. Yeah. Damn it. but yeah. Yeah.

Peter Schravemade (1:07:16) You know it. You know it.

I would never do that. I would never. That's not in my nature. shall we go on to this next one? this is an interesting one, only from one and

I'll rush through this because I'm conscious of time.

Kasey McDonald (1:07:34) Yeah, 'cause I've I think it's probably down

your past wheelhouse, right? From a BoxBrownie sense. Yeah.

Peter Schravemade (1:07:40) Yeah. yeah, it absolutely is.

Yeah. So there's a Queensland couple and I can actually relate to this. So not from a purchase perspective, but from a renting perspective. I was trying to find houses from j for Georgia, if you remember in Melbourne, which is two states away. So we've got this article that we've pulled out which talks about a Queensland couple who are alleging misleading property photos from AI enhanced listings. So the

Kasey McDonald (1:07:52) Mm-hmm. Yeah.

Mm-hmm.

Peter Schravemade (1:08:07) The deal is there's a couple dealing with a serious illness, and they're saying misleading photos and property representations wasted exhausting inspection trips. So it's not easy for these guys to actually inspect properties and they're saying that it w they had been misled by AI enhanced images, styling and edited photos. the published material appears to include allegation and suspicion, and there's no proof that AI was used. Well

AI is used in I do know this area. AI is used in just about every single image on realestate.com.au. It doesn't really matter which one you're looking at. So whether it's a blue-sky replacement, grass replacement or whatever, there's artificial intelligence used in that. where AI, where we start referring to AI is the generative side, what has it added to the listing that is not there?

Kasey McDonald (1:08:39) Mm-hmm.

Mm-hmm.

Mm-hmm.

Peter Schravemade (1:09:03) So, you know, in Queensland in Australia, in fact, we're allowed to edit blue-sky out. We just can't put a sky that doesn't exist in that location. and a great example of this is have you ever wondered what a photographer does when they turn up on twilight and it's a gray cloudy day, but they've been paid to get a magnificent twilight of the property bathed in glowing golden? Well, they will edit that photo. And it's a commonly accepted practice.

Kasey McDonald (1:09:03) Mm-hmm.

Peter Schravemade (1:09:32) To edit the photo. Now, good editing will mean that it will look like the sunset that is normally there. That's truthful and honest. And most people don't have a problem with that. Bad editing would be to put a sun in the sky when that is not West, because that misrepresents where West is. Like if there's a setting sun, that then becomes West. And so any kind of artificial intelligence in marketing and photography, I think is broadly accepted.

Kasey McDonald (1:09:52) Yeah, absolutely.

Peter Schravemade (1:10:02) It's the mis except if it misrepresents the property. So if you've got a whole heap of trees out the front that are obscuring the entrance and you take those down without disclosing, somebody would be very annoyed if they turned up to a property and they're all there. However, if you showed them the original photo and said, here's what $150 with a tree lopper could do, and we've got a quote and approval from the council to do it, and you put a mis a little disclaimer down the bottom saying this is what the property could look like.

Kasey McDonald (1:10:22) Mm-hmm.

Peter Schravemade (1:10:32) There is nothing wrong with that because you're not actually setting out to mislead. You're demonstrating the potential of what the property could actually be. And we do that every day. Like, we do that in not that anyone's doing this at the moment because no one's building and no one's developing, but developers do that to show what a property will look like at the end. So, but these people, these people are saying that it caused lengthy trips. Now, I had this happen to me in Melbourne. I wasn't

Kasey McDonald (1:10:37) Yeah, absolutely.

Peter Schravemade (1:11:00) To be fair, it wasn't the images that were misleading or misrepresenting me. It was the actual agents saying that you have a chance of this property turn up on the weekend and then I would book a flight to Melbourne. I'd go and book accommodation during the Australian Open. I'd attend 60 open houses and I'd get none of them. And that was the misleading part. But what these people are saying is they've traveled a great distance to get to the property, and the property has been misleading. And I think we both agree as an industry whole.

that the imagery or any kind of marketing for the even the heading, even the way it's written, the content, the copywriting you have written for it should not misrepresent the property as it sits there. I don't really understand why agents would do that anyway, because it just sets up the incoming purchaser or tenant for disappointment.

Kasey McDonald (1:11:42) Absolutely.

Yeah, look, well, there's been cases that have gone through tribunal of exactly that, right? Where there's been power poles right out the front. They've been removed you know, from those photos, and they've been fined. The agencies have been fined for that. So, you know, and that's been going on for a little while. I haven't heard of a case like this happening for a little while in the industry, but it's probably because there's been so many other misconduct cases that have been presented to us.

Peter Schravemade (1:12:11) Well I haven't

Yeah.

Well, i

interestingly, they haven't made a complaint. And that's the problem. Like that's the problem I've got with this story. It's effectively clickbait at the moment. If you're in that scenario and you have you feel like you've been misrepresented by an image in that scenario, make a complaint to the Office of Fair Trading. If they agree with you, then that they'll you know, there'll be a sanction and the real estate agent will learn the but putting it in the media is not gonna

Kasey McDonald (1:12:22) Right.

Peter Schravemade (1:12:46) do anything. Like it's just a puff piece, then it's not a puff piece. No one likes it. But it is it effectively becomes clickbait. So, you know, if you're if you're truly misrepresented, then a complaint needs to be made. And there's no evidence that they've made a complaint to the Office of Fair Trading. There's no comment in there to say that's the case. So yeah.

Kasey McDonald (1:13:05) Yeah, and probably one of our final topics for today, Pete, I think again is around the misconduct piece. And, you know, let's not mention the agent or the agency name from this QCAT decision, but I think it really comes back to the whole consumer protection, trust, and regulatory screening process. But I think the key here is that the

Peter Schravemade (1:13:13) Mm.

Kasey McDonald (1:13:30) QCAT ordered compensation after finding that the agent used his status as the real estate salesperson to deceive and manipulate the client. And that was reported. The facts included almost $200,000 was transferred for a supposed investment. So, you know, like it's, I think it's still a criminal matter, right? So I think it's potentially.

Peter Schravemade (1:13:51) Yeah. Yeah. This is the

Kasey McDonald (1:13:58) or what it pot some of this is still going through the courts. so we might need to be careful in how we probably talk through this maybe, but yeah.

Peter Schravemade (1:14:03) Yeah, well the q yeah. Yeah, well the q the Q

cat finding was that you know it th that the that the person was actually it was he was an undischargeddd bankrupt. Is that not cro i that's correct. The Yep.

Kasey McDonald (1:14:23) Yeah, he was undischargeddd bankrupt with prior financial

issues. so that was already in play and he's also still been able to operate in the real estate industry.

Peter Schravemade (1:14:31) Yeah.

Yeah. So he moved from a previous position where he was he was an undischargeddd bankrupt with prior financial issues. And the real question is how he was able to work in the industry? And 'cause he 'cause he had I don't know if it was a registration or a licence, but you know, it's just a another black eye to a real estate industry around trust, in real estate. It's

Kasey McDonald (1:14:36) Mm-hmm.

Yes.

Mm-hmm.

Peter Schravemade (1:15:01) How does a consumer trust another professional with a real estate licence now that I know that this one was an undischargeddd bankrupt operating as a real estate agent? And I think I think he actually held somebody's money, did he not? I think that was the that was the case. Approximately about $189,500 invested. QCAT ordered compensation of about $271,000.

Kasey McDonald (1:15:16) Yeah, was that's what it was. Hm.

Yes.

Mm-hmm.

Peter Schravemade (1:15:28) Which is the you know, that's a lot of money if you're I think this person was an elderly person who had put placed their trust in not just selling her property but purchasing another one, right?

Kasey McDonald (1:15:39) Yeah, definitely. Yeah. So I think, you know, again, it's just all about how are we operating in this industry and what checks are we actually doing, you know, from I guess also a fair trading perspective and still being allowed for this person to continue to operate or operate in a different capacity.

Peter Schravemade (1:15:50) Yeah.

Yeah. Well that is a that

is a very good question, isn't it? I thought from memory, correct me if I'm wrong, it's been a while since filled one of these out, but we have to check a box that says I are you have you been in financial strife or whatever? And it could you know, this may not be an issue for fair trading. It could be that he fraudulently didn't disclose that. And if that's the case, well, I wouldn't I don't think I'd like to be

Kasey McDonald (1:16:06) Yes.

Mm-hmm.

Peter Schravemade (1:16:23) I don't think I'd like to be in that dude's shoes. I don't think they'll take well to that.

Kasey McDonald (1:16:27) Yeah, I think as well some of the questions do slightly change all the requirements as to whether or not you're just getting your, I guess, registration or your like your salesperson property manager certification versus actually being the licencee where you're then operating the trust account. So there could be some differences there. that then that this then hasn't been picked up. and then so yeah, I guess.

Peter Schravemade (1:16:37) Registration, yeah.

Operating a trust account. Yeah.

Hmm.

Yeah.

Kasey McDonald (1:16:54) We can't speculate whilst things are still going through the courts and being finalised, but again, just comes back to this whole trust piece within our industry.

Peter Schravemade (1:17:02) Yeah, g so I mean to wrap this up, that's it's a massive day, right? Well there's nine there's nine key things there and like to go back over it, we talked about the form scenario at the start. we've gone through are the dwelling approvals falling, we've gone through s self managed s super fund. We've spoken about AML/CTF laws coming in, we've talked about the ACMA SMS Sender ID, spam compliance,

Kasey McDonald (1:17:05) Mm-hmm. Absolutely.

Peter Schravemade (1:17:31) Talked about Brisbane n selective developers market mood all in there. the Queensland couple with the AI agents and then this other fellow who somehow managed to get a registration or a licence and trade as an undischargeddd bankrupt. Look, not a not a wonderful day for agents in general, but I think the whole part about this is to have

Kasey McDonald (1:17:41) Mm-hmm.

Peter Schravemade (1:17:56) these conversations amongst ourselves as a real like the it's one of the reasons we set this podcast up is that we don't talk about this as an industry enough. We don't talk about the things that we're doing right or wrong. And there are a lot of you out there that are doing fan fantastic things, not just for yourselves, but for the offices that you're in and for the industry in general. And so it's easy to get to a scenario where especially on a bad news day and we've had two of these so far in eight I think this is our eighth episode.

Kasey McDonald (1:18:02) Yeah.

Hey

so? Yeah.

Peter Schravemade (1:18:24) We've

had two of these. and it doesn't always doesn't leave me feeling well. But the one thing I would say to the industry is, you know, talking through these matters and actually deciding the way that you will act in these scenarios moving forward makes us better for it. And you know, like if you're out there today and you're struggling with forms and whatever else, can I just, you know, ask you to exercise a bit of patience and I think you will see this all play out.

in the coming weeks and certainly next week, I'm hoping that we can have somebody on the show to actually discuss the end to the debacle that has been this weekend since end of financial year. But look, I also would put a shout out if you're feeling any undue strain, and mental health is a is a key factor here. Don't forget too that the RISE Initiative has a RISE Care app.

that entitles you to you know conversations with people who are able to set you thinking straight and set and that doesn't mean patronize or tell you're doing the wrong thing. It's just a free app that's devised to reset your mental health and really provide that. So if any of these things are happening to you guys out there today, can I just urge you to jump on the RISE Care app and seek assistance, or if there's you know any anyone around you that can help you with that, certainly make yourself aware. But look to all of the rest of you out there, I think I speak on behalf of Kasey, although she will tell you quite frequently that's a dangerous topic. But we wish you the very best leading into the weekend as far as selling, letting administrative work open for inspections, whatever it is you're doing.

putting out signage, be responsible when you're putting out signage. Don't steal someone's AirTag. all of these things that can go on. We wish you the very best for the coming weekend, which is the fourth of fourth of July, the third today.

Kasey McDonald (1:20:15) Mm-hmm.

Yeah. Thanks everyone for listening. Have a fantastic weekend. And that's a wrap on before the weekend.

Peter Schravemade (1:20:30) Rock on.