The current Real Estate Institute of Victoria president took over at an interesting time for the state’s peak representative real estate body, and for the Victorian property market.
Stepping up to the plate as the voice of Victoria’s property industry, baseball enthusiast and newly elected Real Estate Institute of Victoria (REIV) president, Richard Simpson, has home runs firmly in sight for his role, despite government policy bases being loaded with challenges and a market consistently pitching curve balls.
Richard Simpson’s predecessor Adam Docking exited the REIV building under a cloud just six months into his tenure. It’s a bump in the road already in Simpson’s rear-view mirror, as he looks to represent the organisation’s 5,000 strong membership and maintain pressure on the state government to deliver sound policy.
“My role is to be the spokesperson for the industry in Victoria, and I’ll continue that role, but also continue to work with government to make the property industry and profession easier to work in for all parties,” Mr Simpson told Australian Property Investor Magazine.
The fifth-generation estate agent and partner of family business W. B. Simpson and Sons started his professional life studying to be a chartered accountant, completing a Bachelor of Business (Property) at RMIT, specialising in the Valuation Stream to complement a Bachelor of Commerce degree from Melbourne University in 1988.
He then spent 10 years as a chartered accountant with KPMG as a senior manager specialising in property, banking and finance.
He’s not new to REIV, having served since 2015 as a director and previously as the Commercial and Industrial Chapter Committee Chair, as well as the presidency in 2017-2018. His current presidency ends in October 2022.
Speaking to API Magazine about keeping up the good fight on important issues such as abolishing stamp duty and housing affordability, Mr Simpson offered insights into the pandemic’s impact on Victoria’s property landscape over the past few years.
“There are definitely different challenges for the industry as a whole now, so with the rising interest rate environment and different challenges in the market as it starts to slow down a little bit, there remains a lot of work to be done with government on a lot of issues,” he said.
“For example, we’ve recently had a property market review and we’re waiting for the results of that from the government and how that will be implemented.
“My understanding is it will most likely form the basis of the government’s real estate policy going into the election and if the government’s returned, they’ll be legislated.”
Ten recommendations put forward by REIV include evidence-based pricing for all residential properties and a review of the Residential Tenancies Act to address housing availability issues.
“Housing affordability is extremely important across Australia, not just in Victoria, so it’s something we’re pushing the government on.
“There needs to be more social housing provided,” Mr Simpson said.
“Once migrants start coming in and people come in to fill the positions that are really needed, then demand for housing is going to be strained.
“It really is a supply side issue – there needs to be more homes built and it’s something we’re pushing the government hard on.”
Stamp duty reform needed
REIV also recommended to the market review to address the issue of stamp duty.
Mr Simpson says stamp duty tax reform seen in NSW this week will raise the stakes for treasurers around Australia.
“I think it’s going to put some pressure on other treasurers to move away from stamp duty, which is a really inefficient tax that prevents people from moving, and towards freeing up supply in the market.
“You don’t want all the states go off and do different things – it really needs a national focus and a national policy to be able to abolish stamp duty because the states are going to need assistance from the federal government to make up the shortfall in their revenues if they abolish stamp duty,” he said.
“The government in Victoria is taking enormous amounts of stamp duty but not reinvesting into social housing or supply.
“Property taxes make up 48 per cent of all taxes in Victoria so that’s stamp duty, land tax and other property taxes; its enormous and this government’s put in 14 or 15 new taxes on property.”
The Victorian property market also endured world record lockdowns, giving rise to major shifts in buyer behaviour.
“There’s been a change in the way the world functions because of covid.
“We saw a lot of new trends come in, including working from home.
“What we’ve seen is people moved away from a centralised model, moved away from the city.
“Because people now are able to work from home, they’re demanding larger accommodation.”
Mr Simpson said buyers are reassessing and working from home in your bedroom is not desirable anymore, causing an exponential demand for three-bedroom houses with a study and a yard.
“We’ve seen a flight to the country and to sea change, they’ve said, ‘I’ll go and buy a house in the country and work at home two days and come to the city two days, and I don’t mind travelling two hours on the train for two days a week, but I wouldn’t do that for five days a week.”
Pre-pandemic, Victoria’s population was growing by 150,000 people a year and 120,000 of those were moving into Melbourne.
“We had the tightest or most restrictive covid rules of any state and that really upset a lot of people and they left.
“A lot of people I know went to outback NSW or rural NSW or up to Queensland and just had a complete change of lifestyle, so there’s been a big shift.”
For Victorian property managers represented by REIV, the covid road has been long and arduous.
“A lot of real estate agents left the industry, a lot of businesses just thought it was too hard and just closed up, so there’s a real shortage of real estate professionals in Victoria and in fact across Australia at the moment and it’s difficult to get people, as it is in all occupations,” Mr Simpson explained.
A lot of investors got out of the property market too.
“It became more difficult to deal with tenants and there were changes in residential legislation in Victoria that made it more difficult for landlords, so a lot left the industry and sold up and those houses went to first-home buyers and the like.”
While caution around interest rates and cost of living increases is slowing auction rates, seeing 1,000 auctions a week for the first six months of this year was not unusual.
“A thousand a week used to be called the Super Saturday, but for the first half of 2022, that was just a normal Saturday.”
Mr Simpson’s puts his own in weathering the storms of the last few years down to a family business heritage rooted in a strong, reputable, ethical and progressive firm.
“What keeps us going through it all is our willingness to adopt new technologies as quickly as possible to help our clients and our tenants but also being on top of the regulations, the changes that were happening in the real estate industry throughout covid and the like, which helped us a lot.
“I really put it down to the people that we have in our business too, and how loyal and dedicated they’ve been over the years.”
Outside of his numerous roles at the most senior levels of Victoria’s property industry, Mr Simpson is a keen baseball player turning out in winter for Melbourne University and in the summer for the Malvern Braves.
He’s cheered on at the sidelines by his wife Kirsten and their young daughter, Annabel, and son, Lachlan, who may one day carry on the mantle of the family business that has operated since 1872.
At least for Richard Simpson he genuinely can, and does, say: “Real estate is in my blood.”