13 Jan Industry body new leader speaks out about the future – Adrian Kelly
The nation’s peak property body, the Real Estate Institute of Australia, has a new leader. Adrian Kelly is a successful independent agency owner from Tasmania and he has just been crowned to head the Institute during a period of great uncertainty. How does he see the property market responding to a possible change of government?
Kevin: My next guest is the new president of the Real Estate Institute of Australia. He’s also the founder and CEO of View Real Estate, a very successful independent operation in Tasmania. Adrian Kelly is my guest. Adrian, congratulations on your elevation to president of the Real Estate Institute of Australia.
Adrian: Good on you Kevin and thanks for having me.
Kevin: It’s my pleasure. A number of questions I wanted to ask you about.
Kevin: What’s your vision for the institute in Australia? What do you see going forward? Because currently it’s just made up of all of the institutes in Australia with the exception of Queensland.
Adrian: That’s right. Look, I’ve got a one year term. That’s how our presidential reigns work, and I can tell you that my short term focus is going to be on the federal election. So, whether that be in May or slightly before, we’ll soon find out. We’ve already started doing a lot of work in gearing up for that because obviously it’s going to be an important election for Australia and our members.
Kevin: What’s the institutes view on negative gearing?
Adrian: Look, that obviously could be a long conversation, but I think whichever party forms government needs to look at taxation in a holistic manner, not just negative gearing. Unfortunately, negative gearing has become a little bit of a political football now, and capital gains concessions to a lesser extent. But I’m quite comfortable in thinking that both of the major parties will talk to us in a logical manner in the lead up to the next election rather than using topics like negative gearing just to potentially obtain some votes. Because we’ve got different markets right across Australia and some are flying at the moment and some aren’t. So, I think any changes to government policy like that need to be at least taking into account what’s happening in the market at the present time.
Kevin: Yeah, I think that’s the reality, isn’t it? That negative gearing or what labor opposition are proposing to do is more of a political stance as opposed to an economic stance. It just doesn’t make sense economically.
Adrian: Well, the problem is, Kevin, is that if you read what all the respected economists are saying, and you and I probably both do that, is that it seems to me that nobody really knows. Some economists are saying that ABC will happen if you start mucking around with negative gearing, and other economists are saying that XYZ will occur. Because negative gearing has been a long term structure of taxation policy for decades now, it’s very difficult for economists to pinpoint exactly what might happen if you start changing it. So, I think that’s the big issue. But as I said before, federal governments need to look at negative gearing as part of the whole property taxation landscape, and that’s what we’ll be encouraging them to do.
Kevin: How will you be out to position the institute in Australia? Are you looking for it to be the lead body, the main spokesperson working with the government?
Adrian: Well, that’s what we’ll be intending to do. I mean, we’ve got thousands or tens of thousands of members, or members of institutes right across the country. So, it’s our role to provide the national voice, and that’s exactly what we will be doing. Having said that, we have some significant support from many of the major estate agents across the country, including the large franchise groups. But we’ll be rolling all of that out in the new year.
Kevin: Yeah, it’s unusual that the Real Estate Institute of Australia is made up, it’s members are really the members of, sorry, the institutes in different states. So, you don’t have any direct link with any of their members as such, do you?
Adrian: No, that’s right. We don’t want that either. REIA was never intended to be that. The national body has survived 92 or 93 years now as it is, so there’s really no reason for that to change either.
Kevin: Let’s talk about the strategic plan. Are you looking to continue with that, or are you looking at some changes in overhauling it?
Adrian: This is the plan that’s currently in place you’re talking about?
Kevin: Yes, yes.
Adrian: Yes. So, look, we’re actually a fair way through that. There’s not too many red dots, if you like, on that plan. So, we’ll be pushing on with that. I suspect that we should have that pretty well completed by about the middle of next year, but I have to say, Kevin, that our focus next year is going to be on being the national voice for all of those mum and dad estate agents across the country, because that’s what we should be doing.
Kevin: Does the Real Estate Institute of Australia compete in some way with the state institutes in terms of accreditation and education if you’re looking to take that role?
Adrian: The short answer is no. We don’t play a part in that at the moment and we don’t intend to. That’s really up to the individual states to work through that themselves. Plus, you’ve got individual regulators too, Kevin, in each of the states, so different legislation. It’s just not something that’s feasible for the national body anyway. REIA is purely an advocacy and policy body, as it should be. If anything, under my tenure over the next 12 months, I’ll be looking to improve on that.
Kevin: So, doesn’t it make sense though to have licencing under some sort of federal ruling as opposed to state by state? It’s very clumsy.
Adrian: Look, that would be nice. I suspect getting all of the states, state regulators that is, to agree to something would be a bit like herding cats. It’s a bit like saying, “Wouldn’t it be easier to have one standard drivers licence across the country?” But it’s not that simple because you’re looking at changes to legislation, all sorts of things. So, whilst that would be ideal, it would be nice, at the moment we’ve got the mutual recognition which happens between states. That works reasonably well, but there’s always room for improvement. So, I don’t think that will be any part of our focus in the short term, Kevin, to be honest.
Kevin: For the Real Estate Institute of Australia to be the peak body. To be that main liaison and have some relevance in the political environment you would need to get membership from all the states. Can we talk about Queensland, why they haven’t seen fit to join the national body? What will you do about that?
Adrian: Look, Queensland haven’t been a member of REIA for a number of years, and I think that’s unfortunate. To be a member of REIA, there’s essentially two things that need to occur, and that is you need to pay your way, as all the other states do, and there needs to be good will. I, as has our previous president, the olive branch has always been there for Queensland to come back in. It doesn’t make sense for a national body to have one of its largest states not a member. I suspect that over the years past, they may not have seen value in being a member. But I will do what I can next year to have them back as a member, regardless of how we might have to structure that.
Kevin: Do they have a voice? Do they attend meetings?
Adrian: No, they don’t. No. They take part in commercial conversations between the institutes as they should. That’s because all of the institutes have something to gain by using their collective bulk, if that makes sense. But in terms of policy and advocacy, they don’t have a voice. Having said that, everything that the REIA produces, sends out, speaks about, will obviously encompass Queensland to the best that we can anyway, because that just makes sense.
Kevin: Yeah, it’s such an important or such a big part of the Australian landscape in terms of real estate. To not have it represented on what is meant to be the peak body just doesn’t make sense.
Adrian: Look, I’m sure that we can get Queensland back on track with the rest of us at some point, but I suspect that will be a timing issue, Kevin. We’ll see what happens.
Kevin: Adrian Kelly, my guest. Adrian is the new president of the Real Estate Institute of Australia. Adrian, thank you for your time, look forward to talking to you during 2019.
Adrian: Thanks for having me, Kevin.