STATUTES AMENDMENT (REAL ESTATE REFORM REVIEW AND OTHER MATTERS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 14 November 2012.)

Mr ODENWALDER (Little Para) (12:01): I rise to speak in support of this bill. This is an important bill because obviously anything to do with real estate affects all South Australians. It affects particularly our young people, who are looking for perhaps their first home. In the current market it is quite difficult. The Statutes Amendment (Real Estate Industry Reform) Act 2007 came into operation on 28 July 2008, and this government continues to work on ways to improve how real estate transactions are conducted.

The proposed amendments in this bill will achieve two principal objectives: they will strengthen the rights of consumers and small business and reduce the administrative burden on real estate agents and auctioneers. A review of parts 4 and 4A, which were introduced into the Land and Business (Sale and Conveyancing) Act 1995, is required every two years. This review has resulted in recommendations that ensure regulation is updated to consider concerns of the real estate industry and, importantly, South Australian consumers.

Several amendments included in the bill were brought up separately to the review but were still considered appropriate. These include the fact that the reserve price cannot at any stage be greater than 110 per cent of the selling price sought by or acceptable to the vendor as stated in the sales agency agreement. The vendor or agent will not be able to vary the sales agency agreement in respect of the selling price sought by or acceptable to the vendor. If the sales agency agreement is terminated, the vendor must not make a new sales agency agreement with the same agent specifying a selling price sought by or acceptable to them which is greater than that specified in the former agreement unless the period of the former agreement has elapsed.

There will be an establishment of a nexus between the selling price sought by or acceptable to the vendor and the reserve. This means that the expectations of the purchaser will be realistically met when the auction of a property is based on advertising reflecting the genuine selling price of the vendor. This bill ultimately will strengthen the regulation of the real estate industry. In doing so, it will improve fairness and transparency for South Australians who are buying a home and provide a sense of security for those people. I commend the bill.

Mr SIBBONS (Mitchell) (12:03): I rise briefly to indicate my support for this bill. Buying a house is the single most significant financial decision for the vast majority of families. The government recognises the importance of this decision. There is plenty to consider, whether for families or individuals. This bill seeks to deliver improved regulations of real estate legislation that will put the minds of South Australian homebuyers at ease.

Following the implementation of the Statutes Amendment (Real Estate Industry Reform Act) 2007, the REIR act in 2008, it became a requirement that new parts 4 and 4A, which it introduced into the Lands and Business (Sale and Conveyancing) Act 1995, be reviewed within two years. During the review process, several other comments were made during consultations.

These comments have been addressed in the bill to ensure that regulation is continually being updated to reflect the needs of the community and the industry, and they include the following changes. The definition of small business is amended to include businesses to the value of $300,000; this has increased from $200,000. A cooling-off notice will now be able to be delivered by email with the permission of the vendor. Bodies corporate will now have access to the cooling-off period if purchasing residential land.

Auctioneers or agents will be required to take all reasonable steps to give a purchaser notice of the times and places at which the vendor's statement can be inspected prior to the auction. Vendors or agents will now be permitted to display the prescribed notice in a prominent position at an open inspection, so as to indicate that the purchaser may take one if they so choose, rather than personally give a copy to every prospective purchaser.

In addition to these amendments, the bill importantly includes the creation of a nexus between the selling price sought by, or acceptable to, the vendor and the reserve. This will directly assist to achieve four main objectives: to encourage the vendor to specify an accurate selling price sought by, or acceptable to, them in the sales agency agreement; to eliminate the marketing of a price significantly lower than the reserve; to eliminate collusion between the agent and the vendor to estimate low prices in the sales agency agreement; and to create transparency in the auction process by allowing the prospective purchaser a reasonable idea of what the reserve will be if the property is marketed.

It is clear that the bill, after extensive review and consultation on existing real estate reform, plays a vital role in ensuring fair and effective regulation for both the industry and potential homebuyers. I know, from speaking to people in my electorate at street-corner meetings and when I am out doorknocking, that people want to see us improve the fairness and honesty around what is such a significant financial investment. I commend the bill to the house.

Mr GRIFFITHS (Goyder) (12:07): I also rise on behalf of the opposition and confirm that I will be the lead speaker for the Statutes Amendment (Real Estate Reform Review and Other Matters) Bill 2012. I note that it was introduced by the minister on 14 November 2012. I take from the other speakers the history that has occurred here, the reviews that have been undertaken and the general level of support that exists across the real estate industry for changes to occur.

It is fair, though, to note that, while generally supportive of the bill, there are issues that the opposition has raised via amendments that are intended to be debated during the committee stage of the bill, but I do look forward to its eventual passage, because it is important that there is a strong level of support and positive opinion in the community about the real estate industry, so that we encourage people to believe in it and have an acceptance that it will work for them, no matter whether they are purchaser or a vendor.

It is a pleasure to contribute to the bill. I note that it has been a matter that has been discussed at length for a few months by the Real Estate Industry of South Australia with the minister and the opposition. Indeed, the Law Society submitted a report to us also which was part of our joint party room consideration, and indeed I do note the willingness of the minister to be involved in ongoing discussions at this level. I note, indeed, that a senior officer had some level of unluckiness when it came to bike riding, and he has been unavailable in recent times, but he is back today. He looked a bit forced when I came in, as in painful, but that's about all.

But this is an important step forward, and it reflects the opinion I have had put to me by the real estate industry that a level of support exists. It is fair to say—and it might be my words not theirs—that they will live with it. They would probably like to see some changes occur to it, but they understand the numbers as they are and how the parliamentary process works, and that it is important for them as an industry to move forward with it too.

There might be some finer points that we might talk about in detail, but there is a level of support that exists from the industry. Greg Troughton, from the Real Estate Industry of South Australia, is not in the state today but he has advised me of an alternative officer I might speak to if there are issues to discuss. But from my discussions with him, and with the member for Chaffey—who I know also intends to speak—when he has spoken to real estate industry people, I know that there are some issues they want to raise, but there is a level of support that exists.

I also recognise the importance of the bill. When people buy or sell real estate it is often the most important and most expensive purchase or sale decision they make in their life. Like the member for Little Para and the member for Mitchell, and what they have talked about, my children are aspirational. I am quite pleased that in the last 18 months both my kids, who were 22 and 20 at the time, bought homes. It showed a level of confidence by them that surprised me, but it showed a commitment they wanted to make not only to their partners but also to owning their own home. It meant that my wife had to forget the kids for a little while, a bit earlier than we thought it might happen, but it has been exciting to see that.

Mr Venning: Empty nesters.

Mr GRIFFITHS: Empty nesters, as the member for Schubert points out. However, it has opened my eyes again to the real estate industry. As someone who has lived through it several times—as a seller, but the majority of times recently it has been as a buyer—I have had mixed opinions.

It is fair to say that when I read the consumer and business affairs report submitted by Mr Green, who works for the minister, when he provided me with an update of the concerns raised with the commissioner's office in the past five years about the complaints lodged by, predominantly, purchasers—and, in some cases, vendors—they have not been exceptional in number. However, I do recognise that for the majority of people there might be a level of frustration, but there is an unwillingness to lodge a submission through to the commissioner's office. It has not been a number that surprised the life out of me, but I do reflect that they probably represent a relatively small number.

It is important that we get it right. The 47 members who sit in here represent nearly 1.6 million South Australians, and they all have a story to tell—some bad, but mostly good, from the feedback I have had from within the industry. It is important that they believe in real estate professionals, and the industry itself is focused on positive outcomes. It recognises that the best way for its members to survive, do well and prosper is to have an industry that works well, that gives confidence to the consumer, as they purchase their product in buying a home, as well as to the vendor in selling it.

In my case, I had an experience with an agent that was somewhat frustrating. I felt as though he was working more for a potential purchaser than me as the vendor. At the time (this goes back a long time, and I will not give any more reference to timing than that), I paid him out. I wanted to get rid of him because I had an alternative arrangement in place that I had created myself. I went to him, explained the situation, wrote out a cheque in his name and finalised the agreement.

I understand that that is not the preferred option, but it was necessary for me at the time because I had little faith in the individual. Since then, whenever I have had real estate involvement it has been with positive outcomes, exceptional outcomes. The agent I have dealt with most lately, almost four years ago, was prepared to do anything for me without any reference to who I was or what I did, all that sort of stuff. I think he is an example of the professional quality that exists within the real estate industry.

It must be evident, when I look at the issues the minister is bringing forward, and the relationship he must have with the industry and the industry with us as an opposition, to accept that change has to occur as well. It suggests to me a level of positiveness that is, I think, a good one. There is no doubt that for a real estate industry to work well, and for an individual agent to be successful, it is necessary that they get positive feedback, and they rely upon their customers—be they purchasers or vendors—to spread the word about how they operate. So the ones who have done well, no doubt in buoyant economies, have been people who have provided exceptional service for both sides of the equation and who have looked for opportunities to help people out.

My issues are reflective of those of many others. If a lot of people in this chamber rose, they would probably talk about a personal perspective on real estate. It is important that it works right, and that is the real reason to keep looking at improving legislation to give protection to purchasers and sellers. The member for Little Para, or it might have been the member for Mitchell—I apologise—has reflected upon the review that was undertaken of parts 4 and 4A a few years ago and how issues with that were identified and improvements suggested which are part of this legislation too.

I want to enforce the feedback that I have received from Greg Troughton of the real estate industry that they are prepared to accept the bill as amended by the government. I note several amendments will be discussed at the committee stage. One has been subsequently withdrawn, I believe, by the minister; the rest are still being proceeded with. Again, while it is not ideal for the real estate industry, they are prepared to work with it.

I note that two amendments came as late as last Friday, which emanated from a discussion that the minister had held the week before that with members of the real estate industry. I hope that the minister has had the opportunity to look at the opposition amendments which, I think, number eight. One of those might not be appropriate, others are contingent upon others, so we will see what happens about that in the debate.

I have reviewed the second reading speech of the minister, and noted it with interest, and there are a few issues that I wish to discuss which, obviously, people in the chamber will be making the minister aware of. The first point I wish to take up is the nexus and the capping of the reserve price. I really think that is a key issue because it talks about reserve price. I am not sure if I picked that up as early as I should have because I was working on the basis that a property is advertised at auction for a figure. We will have some discussion about the single figure versus the range later on.

My concern was that you are trying to determine what the market is prepared to pay. I have lodged amendments relating to this, but subsequent review has highlighted that we are talking about reserve price which really is, in effect, what the vendor is prepared to accept when they sell their property.

My initial concern was raised about how an agent determines in discussions with the vendor what the market is prepared to pay. I know they have experience in this locality, I know they have experience within the industry, but I know the feedback I have had is they are not necessarily qualified to provide the detail upon what the valuation would be—that is a separate level of person again. Even though, in practical experience, they probably have more day-to-day involvement than most others, they work within a range.

There will be some amendments lodged about this and there will be some subsequent debate take place, but this really has become a bit of a point for the opposition. I note that the real estate industry has had continuing levels of frustration with it but is prepared to work within its guidance, as I understand it, but I still think there is an opportunity for some debate to occur at the committee stage about the effects of that.

The second point I wish to raise is the detail that is provided about small business. It talks about an increase from $200,000 to $300,000, as I understand it. My desire is that, given we have had the GST since 2000, there be an opportunity to debate that it should be GST exclusive, so that a clear definition is provided and that no uncertainty exists so that potential market people understand what is meant. I have flagged an amendment, which has been lodged for 1½ weeks and which talks about $300,000 GST exclusive.

I note with interest that, within the rather lengthy debate that has occurred in this chamber about the Small Business Commissioner, there was no reference to a definition for small business at all. I asked that question ad nauseam. I would have thought that small business should have been defined there more than anything. I find it rather interesting that it has been talked about and had a figure attached to it for the real estate industry but not in a more general sense. So I am accepting the $300,000 figure, and the Liberal opposition is accepting the $300,000 figure, but there should be some definition as to whether it is GST exclusive or inclusive. Our position is that it be GST exclusive.

The third point is extension of sales agreements. I note that the minister, as part of the bill, has flagged the ability for a subsequent 90-day extension to be granted to an agency agreement. There has been a position put to us that, especially for some members within the real estate industry who operate in regional South Australia, 90 days and one extension only is restrictive upon them and they would seek an opportunity for a subsequent extension of an agency agreement to be put in place. That is a varied opinion, it is fair to say.

You would hope that with an initial agency agreement and a subsequent extension of 90 days automatically that would be sufficient, because it does represent six months of the year. History tells me that in a lot of regional communities that have had some harder times, six months might not be enough. While a vendor makes the decision about an agency agreement, that opportunity might not exist for them to change their mind anyway because of the size of the community. I suggest there might be a need for a position or review on that. The one that I have taken is that a subsequent extension be allowable so it becomes a 270-day agreement because it has been flagged to me by regional people who work within real estate.

Point four is about single price advertising. I am intrigued how this one is going to work. In the discussions that I have had with people again it comes down to an opinion, and opinions are not always correct. While they are informed opinions—and I respect that—it will come down to what the market is prepared to pay, and quite often that is a bit different to what the vendor's expectation is or what a purchaser's expectation is of a house. It only requires two people to decide that, yes, they want it and then serious things happen with that. It creates some difficulty in a single advertising price.

I know there have been some efforts to constrain the method that is used for that. Symbols used to be attached to it; now it becomes a figure again. I understand the reasoning for that but I seek some clarification from the minister on the reasoning behind single price advertising and its potential impact if he feels it will create some benefits attached to the real industry for purchasers predominately. How is it going to work: its impact on its range of property and its valuation based on what the market considers? It involves all those sorts of issues.

I also raise the point about comparable land sales. I note that it is a requirement now of an agent to provide to a vendor some history of comparable land sales. In the briefing that I had from the minister's staff I asked a question: what if it is not necessarily available? I understand that agents will make a reasonable effort (I think that was the term used) to try to provide that detail. I was able to quote some examples where comparative land sales and valuation opportunities might not exist. They may be rare, and there was coverage provided by the fact of 'reasonable effort'.

I am concerned, though, that if somebody becomes very strict in its interpretation of the bill when it becomes an act and they look at that and then they engage an agent and feel as though a disservice has been done to them, then it might provide an opportunity for them to express frustration to the consumer and business affairs commissioner. I raise that point because I understand that in the absolute majority of cases agents would do the best possible work for the people, so it is not a criticism of the industry, it is more about a practical application of a requirement that is coming upon the industry.

I flag the concern of the opposition about a requirement that properties be advertised with a single figure instead of a price range. I have talked about it a bit briefly, but it really is a worry to us because it impacts on the ability of the market. As a group of parliamentarians our deep philosophical point of view is that the market must have the opportunity to determine a price, and that is a very strong philosophy that we hold true. The concern is that when you advertise a single price it may impact on the willingness of some people to be involved in a potential process which takes them out of the equation. We are concerned about that and we would like to see some improvement on that—at least an explanation by the minister about the reasoning for that—because this is the place where debate is meant to occur.

I want to confirm that there is a level of support by the opposition for the bill. We recognise—and I will enforce this again—that the minister had a preparedness to meet with industry people about this. They have come to us and I have had some very recent conversations with the CEO of the real estate industry of South Australia which flags the fact that, yes, they would like to see some change. They recognise, though, that the minister has been very approachable. They are preparing to make it work.

They have asked us to look at things like implementation date, too. While I intend to put in an amendment about 'not less than six months' regarding its commencement date after assent by the Governor, as an industry they have come to me and said that ideally they would like three months. For them, it is important that they have an opportunity to educate their professionals about any potential impacts. So, that will require some time. I am not sure whether the bill highlights that issue, but that is one that we will put forward and, indeed, one that we hope the minister will recognise, too, as part of his implementation date.

Real estate is something that is a bit foreign to me—I am a bit of a bureaucrat by nature, so I am a process-driven person—so it has been rather interesting understanding it all. I have appreciated it because real estate impacts all of our lives. Most of us in this room would have, at one time or another, purchased or sold property, and we have had a level of pleasure or displeasure with respect to real estate agents. This is an opportunity to improve the way in which they act.

It is appropriate that the house debates this bill in detail because there will be issues which arise which might not completely suit the industry and might not completely suit the vendor or purchaser of a property. It is important that we find a balance that is right, and that is what it comes down to—an appropriate balance which allows not only the industry to have confidence in itself and the way in which it operates but, more importantly, that the purchaser of a product has confidence in the way in which they are treated to ensure that, when they purchase a property, they are paying a fair and reasonable price and the vendor is getting a fair and reasonable price also. I look forward to the debate that will occur in the committee stage and the passage of the bill.

Mrs GERAGHTY (Torrens) (12:26): I am pleased to have the opportunity to speak in support of this bill. I have been to a number of auctions over the last 12 to 18 months, and I have made some interesting observations, particularly at one of them. So, I think it is important that there is some reform.

This government has ensured, and will continue to ensure, that South Australians can be confident that they are getting a fair go when it comes to buying a home, because I think that is exceptionally important. The government is also working to enable the real estate industry to work as efficiently as possible, and the bill continues our efforts to keep the balance between protecting the rights of the consumer and supporting the industry.

On 28 July 2008, the Statutes Amendment (Real Estate Industry Reform) Act 2007 came into operation. These reforms were developed as a result of several concerns regarding the real estate industry. They include: dummy bidding at auctions, which is something I have observed for myself; over-quoting by agents to secure property listings; and bait advertising of properties for prices well below the actual estimated selling price. I might say that I have come across that occurring, which I found exceptionally disappointing, given that it was a property I was interested in. Undisclosed conflicts of interest and other misleading or deceptive conduct by some agents were also addressed by these reforms.

The reforms also required the new parts 4 and 4A, which it introduced in the Land and Business (Sale and Conveyancing) Act 1995, to be reviewed within two years. The review commenced in February 2010, and a report was tabled in September of that year. Submissions received from the industry covered a broad range of topics. Consumer and Business Services has now assessed all of the proposals for change. The bill now addresses six key measures as a result of the review of part 4 and part 4A, and these are:

agents will be required to provide details of sales of comparable land or other information on which the agent will rely in support of his or her estimate of the selling price, which they must include in the sales agency agreement;

agents will be able to extend a sales agency agreement for one further period of 90 days, provided that the vendor agrees to an extension within 14 days of the expiration of the original agreement and that the vendor has the right to terminate the extension with seven days' notice;

agents will now have a more flexible time limit of 48 hours in which to deliver a copy of the verification of the vendor's statement certificate to the vendor and 48 hours (if agreed by the vendor) in which to deliver a copy of the sales agency agreement to the vendor;

auctioneers will now only be required to audibly announce that the standard conditions of auction apply as binding contractual conditions;

auctioneers will be permitted to use a unique identifier comprising a number, letter, colour or some other identifying feature when taking bids from purchasers rather than just a number;

the definition of what constitutes a representation as to the likely selling price in marketing residential land will be tightened to prohibit the use of words or symbols in relation to a single price advertising and only allow the use of words or symbols in price range advertising when used to denote a range.

Evidently, these changes will make a significant difference in the regulation of the industry. The government is continually working towards helping South Australians to be in a position where they are able to afford to buy a home for their families. Further to this, we want them to feel secure in knowing their rights as purchasers are protected. The passage of this bill will:

strengthen the rights of consumers, which is obviously extremely important;

increase the level of transparency of real estate transactions, in particular auctions; and

reduce the administrative burden on real estate agents and auctioneers.

I commend this bill to members.

Mr PEGLER (Mount Gambier) (12:31): I rise to indicate my support particularly for the intention that this bill brings to the real estate industry and I will look at the amendments with quite some interest. Buying a home or flat or whatever is often the biggest decision that many people make and it is a decision that they will probably only make once or twice in their lives. Those people often go to buy a property with a lot of trepidation: they do not know who to believe and they do not know who is reputable and who is not.

I am sure that the passage of this bill will give those vendors and purchasers a lot more confidence. Out in the country we probably do not have as large a problem as here in the city. If there is a disreputable agent most people soon find out and the message gets around fairly quickly in the country so it is mainly in the city, when people are buying homes, where that is the biggest problem.

There are parts of the bill that I have a problem with, but I agree with the agency agreement being for only 90 days with an option to extend for 90. We have to be careful, though, that one agent does not sit back with a potential purchaser until that 90 days has gone by so that he can swoop in and get both the purchase and the sale for himself.

We will also have a problem with comparable land sales, particularly in the country on agricultural land. Often those lands are tightly held and there are not many sales within a district so it is extremely hard to get comparable land values. I think we have to be fairly careful about how we put that into the act so that people who should not be swept up into it are swept up into it.

I also very much support the changes to the announcements that the agent has to make prior to sale. I have been to many auctions as a potential bidder and the agent has to stand up and spruik on for quite some time, and I do not think anybody has ever heard or understood what he has said and it has been a complete waste of time, so I certainly support that change, and I further indicate my support for the bill.

The Hon. L.R. BREUER (Giles) (12:34): I want to speak briefly today in support of this bill. I have had some experience of real estate in the last two or three years. My only previous experience was some 30 or 40 years ago when I bought a house. However, recently I decided to go back into it and I bought myself another house—a new house; I sold my other one and bought a new house. I bought a flat here in Adelaide, and I bought a shack, and then I lost my job, and now I am up to my eyeballs in debt and I cannot afford Tim Tams, ice-creams, or anything else, but we will struggle through and get there. So, I understand very well that for many South Australians buying a home is the biggest financial investment they will make, but this government will always ensure that when they do make that decision, they are given a fair go.

We have listened to the concerns of vendors and purchasers in the marketplace, as well as to those within the industry, and it has been very interesting in Whyalla in the last few years, where there has been an incredible amount of building going on, with new building right throughout the town. I understand the concerns surrounding the real estate industry and appreciate that it can be a confusing process. What I am pleased about with this bill is that it continues with our efforts to address concerns in the community about practices, including dummy bidding at auctions, a lot of overquoting by agents to secure property listings, and bait advertising of properties for prices well below the actual estimated selling price (and I have had some experience of that myself).

Since the Statutes Amendment and Repeal (Real Estate Industry Reform) Act 2007 was implemented in July 2008, several issues have been drawn to the attention of the government. These issues have been addressed in the bill. They include:

disciplinary action against agents or sales representatives who are found guilty of specific offences (breaching marketing requirements, acting in conflict of interest situations and making false and misleading representations) and will be enhanced by requiring the court to cancel their registration and disqualify them either permanently or for a specific period, or until the fulfilment of stipulated conditions, or until further notice;

agents who fail to comply with the marketing provisions of the legislation will not be able to demand, receive or retain commission or expenses in respect of the sale of the land;

agents will no longer be permitted to specify their genuine estimate in the sale's agency agreement as a price range to better reflect the requirements of the prescribed minimum advertising price and subsequent marketing of the property; and

various penalties will be increased to reflect the seriousness of those offences.

These amendments are a direct attempt to resolve the continuing problem of underquoting and bait pricing. The passing of the bill will give potential homebuyers the comfort of knowing that there are regulations in place to protect their consumer rights. The improvement of transparency around such a complex process and significant financial investment I believe is invaluable to the people of my electorate and to all South Australians, and I commend this bill.

Mr WHETSTONE (Chaffey) (12:37): I rise to support the real estate reform review bill and, having listened to all the contributions this morning, I note they have dealt with the myriad of issues we face entering the market to buy real estate or, of course, to sell real estate. As I see this reform, it is about putting a stop to perhaps unscrupulous behaviour or bad behaviour and also dealing with many issues.

What I see on the outside is that bait pricing is probably one of the issues that really does impact on people, and this is obviously being done to lure potential buyers into the marketplace to buy real estate. They are almost lured into a false sense of security about whether they can afford to buy something that has been a dream of theirs, only to find out that that dream is potentially being shattered because the value of that house is being undersold. I think that is something that really has put a bad taste in many people's mouth, and it is why in some instances that profession has been branded as one of the lower-regarded professions.

The minister for Goyder's contribution, as usual, was a very thorough examination of the bill, and I think he has put some of the scenarios in regard to how it will commence and how it will be supported. I have spoken to several representatives of real estate businesses and they are cautiously supportive of the bill. One of the things that has been brought to my attention many times, both here in Adelaide and in my electorate of Chaffey, is the view that this legislation is not being policed; the laws are not being adhered to by some unscrupulous operators, and the authorities are not policing the laws around this legislation.

This bill has been designed to reduce red tape, and I think that is great. Historically, documents had to be sent in hardcopy, but it appears that there will now be the flexibility to transfer these documents electronically. Looking at reducing any red tape and regulation is of benefit to businesses and consumer. One of my pet hates has always been overregulation and red tape.

I would like to note that since 2007, the Rudd and Gillard governments have introduced nearly 8,000 regulations. It seems that every time state and federal governments meet, we put more burdens on industry. We try to reduce it, but the general consensus appears to be that business transactions and moving on in life are always governed by the red tape and regulations.

Just briefly looking at real estate and house prices in my electorate of Chaffey: the median prices increased over recent years, but that has almost been skewered by the uncertainty about water allocations in the river. This uncertainty has driven house prices up and down. A restriction on water allocations is always a reflection on how people will deal with uncertainty, whether they have a job and whether they will be impacted by drought. This affects many houses and businesses within the market.

In listening to the member for Mount Gambier's contribution, it appears that the price of regional homes is affected by the uncertainty of commodity prices, water allocations, and various issues which affect that particular region. I note that building or selling a home on a regional property is usually affected by the certainty of the businesses around the home.

As an example, if a home was built in Adelaide for $1 million, nine times out of 10 you are going to get market value, which should be around the build price. However, if that same home was built on a property or farm in the regions, its value is not governed by the land price or potential market drivers: it is governed by the commodity prices that sit around that farm and are associated with the cost of that home. So, it really is a two-way street. That uncertainty could, in essence, create a desperate seller-opportunistic buyer scenario, so that is also part of the play when it comes to market prices for homes.

Let us take a look at how the auction system works. In some cases, it deals with people who are old hands and who know how the auction system works, or people who know how to play the auction system. It is also dealing with new entrants into the market, people who have not been to auctions. Normally, when you go to an auction or a house sale, there are those new players and the old hands at the game, and that does potentially play out at the end of that auction system.

One of the other issues that I have not got an answer for at the moment is the houseboat industry. How is the houseboat industry going to be affected? Obviously, the houseboat industry is dictated to by, we might say, river allocations—how much water is in the river. Is that river viable for someone to go out and invest in a houseboat? Will that industry be impacted on by this new bill? That is something that perhaps we can deal with, or maybe questions can be asked about, in committee.

I note the increased costs of actually owning and registering a houseboat, and all the rules and regulations that go with that. I accept that it is common that we have increased rates and costs of owning and maintaining a house, but we do not have the increased cost of registration that has gone up from, I guess, a fairly modest cost to, rather, a real burden on owning and operating a house. It is all about the costs of doing business. It is about the costs of dealing with regulations. I am sure that this current bill will address some of those issues.

There is something that we spoke about with some of my colleagues this morning, and that is new homes. We will come back to this bait pricing. We go out and see a house and land package and that will have an included price but, essentially, if you go out and look at how it has been advertised, it is normally about a base price of a home. It is about a base model. With today's expectations, we look at what a base house or home is about, but do we include the environmentally friendly attributes of a home? Will that cost more? Is air conditioning included? Is a garden included? They are almost those issues again of bait pricing. We see the price of a home advertised and then it is really about: does that home include some of the essential expectations that people today want in a home?

It has already been noted with several of the contributions that investing in real estate, in a lot of ways, can be one of the big tickets of life's experience—going out there for the first time or upgrading your home. It is about an experience. It is about progress and it is about moving on with what life offers you. As the member for Giles said, it is about living within your means. Suddenly, you are looking at expanding your home or the nicety of your surroundings. Do we deal with how our wages are structured and an expectation of whether you are challenged within a job? That will have a real impact on just exactly whether you are going to move on, buy a new home, upgrade a home or even downsize a home. There are many issues there. It is about getting the credible information and dealing with that information when you are entering a marketplace.

I think one of the biggest impacts for me, living in a rural area, is the comparison between urban pricing and urban realisation of the price and comparing it to that regional pricing and the baggage that comes with buying a home in country areas or on rural properties. It really does open up a can of worms, just exactly what values of homes and land is all about. I think everyone's contribution today has been valuable, and I have risen today to support the bill.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Industrial Relations, Minister for Business Services and Consumers) (12:50): I thank all members who have contributed to this debate. I think it is probably the case that most members of parliament accept that this is a very important area for vigilance in terms of protection of consumers, who are, after all, dealing with the one and only huge investment that most of them will make in their lifetime. This bill is the result of extensive consultation with industry and members of the public. I thank everyone who wrote to me and the consumer and business services people for their views and comments.

The proposals contained in the bill seek to accomplish three main objectives: to strengthen the rights of consumers, and I will come back to this in a minute when I make some remarks about the amendments being proposed by the opposition; to increase the level of transparency, and again I will make some comment about that in the context of the amendments to be moved by the opposition; and to reduce the administrative burden on real estate agents and auctioneers, and they certainly are intending to do that, there is no doubt about that.

Consumers will greatly benefit from the new provisions, should they pass, which are designed to stamp out underquoting, which apparently the opposition seems to think is rather good, and restrict advertising that uses words and symbols that are often misleading to prospective purchasers. Real estate agents and auctioneers will also benefit from new provisions permitting extensions to sales agency agreements, allowing more flexible time frames for document deliveries and modifying auction procedure to allow for more efficient and streamlined processes.

The government has carefully considered the balance between protecting the rights of consumers and allowing agents to conduct their business as efficiently and effectively as possible. The government has got the balance right. The bill, as moved with the modest amendments which the government has already tabled, will have, if passed, a widespread and positive impact on members of the real estate industry, particularly those in the overwhelming majority who are basically straight up and down decent businesspeople who are honest and do their best to do the right thing. If they were the whole of the real estate industry we would not be wasting our time in here debating this bill because it would not be necessary.

Unfortunately, there are a few rogues, who they know about, do not much like, do not want to dob in and force us to go through the process of doing this sort of stuff in order to catch up with them, but more on that a bit later. This bill will have a widespread positive impact on members of the real estate industry and those who call upon them to assist them in the biggest financial decision they are ever likely to make in their life.

As I said, I intend to make a few in-house amendments, and I will discuss these further during the committee stage. However, can I say this: I have been consulting consistently with the real estate industry about this matter. In fact, as recently as a few weeks ago I had Mr Troughton and a couple of members from the REI—I will not identify them so that they are not tarred and feathered by their colleagues—in my office, we had extensive conversations and we had come to a consensus position on the government bill, as amended by a couple of small fine tunes that we seek to bring in here.

I can indicate that the main one relates to the situation where a real estate agent has received an offer that the vendor is thinking of considering accepting prior to an auction. They were saying it is important that the agent be able to ring the other interested purchasers and say (a) there is another offer, and (b) we cannot tell you what it is but if you want to have a crack at this now is the time to say something or forever shut up. In our original bill we did not allow them to say there is another offer on the table. What we have said now is that if in fact there is another offer on the table, and you are going to have to prove that if you are called to, you can state the fact of there being another offer without disclosing the detail of the offer, which of course would not be appropriate. We have done that in order to accommodate the concerns of the real estate industry, and we are moving it.

For the first time today I have seen a copy of the amendments to be moved by the opposition on this matter. I do not necessarily criticise the member for Goyder in this respect, because they were tabled on 20 February. I can say that nobody from the opposition has sent me a letter saying, 'Here are our things,' but then again maybe that is not the routine anyway. I am not having a crack at the member for Goyder, but I just make the point that I have only just seen them.

But, having only just seen them, I am particularly alarmed at what appears to be a complete backslide in relation to one of the fundamental reforms contained in this amendment bill, that is, the provisions relating to underquoting. Underquoting—that most evil, insidious, disgusting element of the real estate industry, the things that Mr Troughton and all his friends will tell you make them sick to the stomach, the things that all decent real estate agents say, 'If we could just stamp this vile practice out, everyone would have more respect for us as real estate agents.'

I sat them down in a room, when I was working on this legislation probably as long as a year ago, and I said, 'Do you agree with me that there are people out there underquoting?' And they said, 'Yes, we do.' I said, 'Who are they?' They said, 'We can't tell you, you have to find out.' I said, 'But you know it's going on, don't you?' 'Yes, we do.' I said, 'Rightio. Well, you tell me how we can change the law to stop them doing it. Here's my challenge: you go away and tell me how to do it and I'll do it your way. You don't come back with an answer and I'll do it my way.' Guess what? They never came back with an answer.

That is why we have the provisions in here in clause 13, which is the whole guts of the government's consumer protection effort in this legislation, the thing that protects people from the evil grubs who are out there underquoting—the very thing that the whole of this bill is about, the thing that is too hard for the real estate industry to deal with, the thing that all consumers are grumbling about, and quite rightly, the thing that even the ACCC has said is offensive. We have tried to put things in this legislation which will make that not only illegal but detectable.

Opposition amendments Nos 4, 5, 6 and, I think, 8, are typical of the opposition: when we try to get tough on anyone who is a crook, they pull the teeth out of it. So, I am interested in knowing, as we get into the committee stage of this legislation, how the opposition is going to justify to the public of South Australia that this consumer protection measure is to be neutered. Basically, we may as well be here gnashing our chops, completely wasting our time.

Do you know the people who are going to be laughing about this? The real estate agents who are underquoting, ripping people off, bringing the whole industry into disrepute. The people who other real estate agents say are grubs are going to be laughing their heads off when they read this; in fact, they will have the Moët out. I would not be surprised if the opposition did not get a case of Moët if this gets up. It will come from somewhere, I suspect, in the eastern suburbs.

If I was about naming individuals who are actually perpetrators here in my opinion (although I do not have proof), I would even say a name—I do not misuse parliament for that purpose, so I will not—but these people deserve to be caught up with. We need evidence to catch these people. We need procedures that are going to make them find it impossible to continue doing what they are doing and ripping off the public.

This is a very important bit of consumer affairs legislation, and I remind everybody that the Real Estate Institute itself was prepared to sign up for this, provided they got the amendment I have just indicated I will be moving. So, here we have an opposition offering less consumer protection to the consumer from grubs in the real estate industry than the industry itself wants to offer them. That is a pretty bad outcome. I seek leave to conclude my remarks at a later time.

Leave granted; debate adjourned.

[Sitting suspended from 13:00 to 14:00]