Transparency is key to promoting a culture of trust, and is essential in any industry, but particularly one like real estate. As such, the latest report from professional services firm Jones Lang LaSalle (JLL) helps to solidify the Australian property market’s impressive stature among the key players in the industry.
The latest industry index compiled by JLL saw the country’s property market as the most transparent real estate market in the Asia- Pacific region and the second most transparent in the world. Across 100 markets, transparency is assessed under 186 individual measures, divided into 14 topic areas and then grouped in the six categories.
JLL Australia Head Stephen Conry said that there was a strong correlation between transparency and cross-border investment activity.
"Transparency is one of the key factors for investment into Australia, complementing a diverse economy, strong population growth and positive market fundamentals," he explained.
Demonstrating how the lack of transparency can affect markets, The Australian Financial Review pointed to the 35% overall drop in cross-border acquisitions in commercial property last year.
Deals in the Asia-Pacific region, on the other hand, reached a record $US149 billion in 2017. According to JLL, the region had made the strongest gains in transparency efforts over the past two years.
"Higher allocations to the sector and growing cross-border investment activity have increased the scrutiny on the asset class and investors have placed a high value on market transparency," said JLL's research head in Australia, Andrew Ballantyne.
The availability of market data was "a cornerstone" of real estate transparency in this country, he added.
"We have time series data going back to 1970 in Australia, which provides investors insight into the performance of the Australian real estate sector through different market cycles."
Jeremy Kelly, director for global research at JLL, agreed with the idea and emphasised how transparency was driving allocation decisions for commercial real estate investors.
"The availability and quality of information – from prices to ownership – is crucial when trying to make investment decisions, especially in new markets," he said.
The Australian Financial Review, meanwhile, noted that there is still room for improvement in the local market. For instance, property players are concerned about effects of dirty money in the sector.
To combat this, the Royal Institution of Chartered Surveyors is working on creating a standard so that it that can protect its industry against corrupt investment. Additionally, there are plans to extend Australia's anti-corruption and money-laundering regime to include real estate agents, accountants and lawyers.
"The bottom line is, this is something Australia simply has to do under our international agreements," Nathan Lynch, Thomson Reuters regional bureau chief for Asia-Pacific financial crime and risk, said in an interview with The Australian Financial Review.
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