Compliments of the Season

ANGUS RAINE, EXECUTIVE CHAIRMAN AND CEO of Raine & Horne has a couple of things on this year’s Christmas list.

IT’S BEEN A FANTASTIC year for real estate markets across Australia and for the Raine & Horne network. Plenty of homeowners and investors have enjoyed excellent growth, while Raine & Horne has increased its reach with 25 new offices joining us in the first nine months of 2014. More of the same would be a great result in 2015.

What do I want for Christmas? Just a few things are on my list.

A FAIR GO FOR REAL ESTATE INVESTORS IN 2015
Regulators, in my opinion, have overreacted to a healthy property market with these so-called macroprudential regulations. For starters, it irritates me no end that share investors rarely have to deal with increased regulatory scrutiny when the equities market goes on a bull run.

The threats of more stringent lending constraints might also prove counterproductive by spooking some panicked selling and buying ahead of the potential crackdown, which won’t help anyone.

Yet one of the key issues regularly overlooked is that real estate values in Sydney and Melbourne are being driven along by a lack of stock. I’ve suggested previously that the state governments should consider putting in place stamp duty breaks for empty-nesters to encourage them to move on. This should create a bigger property pool.

Likewise, the prospect of paying capital gains tax is stymieing the ability of older investors to sell up. Therefore I’d like the Federal Government to consider CGT breaks for real estate investors aged 60 and over. This seems only fair as it’s possible to access an entire superannuation nest egg at 60 tax-free.

CONTINUED PROPERTY MARKET GROWTH
In my opinion, 2015 will see continued growth in Australian real estate as we will continue to have low interest rates (even with an interest rate hike), a strong economy and population growth.

I was heartened by QBE’s annual Australian Housing Outlook, released in early October, which is forecasting that housing price growth will continue over the next year. The 2014-2017 report, released in conjunction with forecaster BIS Shrapnel, expects that the housing stock deficiency will remain a key indicator of growth in 2014/15, especially in Brisbane (7.4 per cent) and Sydney (7.2 per cent). I’d be happy if the New Year can deliver results like this.

INTEREST RATE STABILITY Hopefully the Reserve Bank’s jawboning of the Australian dollar will help keep interest rates on hold. I guess we also need to hope that in 2015 the troubles in Ukraine, Gaza, Syria and Iraq don’t throw up more challenges for the global economy.

The International Monetary Fund (IMF) has already downgraded growth predictions for 2015, which I’m hoping the RBA heeds before taking any decision to hike up rates.

That said, I expect that the RBA will look at moving the lever on rates in Q3, 2015, so the window on record low rates is closing. This realisation will push the traditional Spring market through Christmas and into the New Year.

A BOOMING YEAR FOR RAINE & HORNE
The GFC cloud has well and truly lifted and 2015 will be all about growth and driving our offices to make the most of the opportunities on offer in the current market.

One of the challenges will be keeping up with changes in technology. We’re also seeing a proliferation of property portals, although I’m very confident that Squiiz, with its industry-wide support, will make a mark.

PROTECTING OUR VALUE CHAIN
One challenge we need to address as an industry is the threat of non-residential companies continuing to take a stake in our industry’s value chain.

The launch of two specialist rural offices – Rural Sydney and Rural Brisbane – has been a major highlight in 2014. As a bushie at heart, this is an exciting turn of events, and both offices will be led by some of the most dynamic, experienced and well-connected agricultural specialists in the business, all of whom have grown up on the land. I’m also thrilled by the substantial growth of our Queensland residential network.