8663.0 - Real Estate Services, Australia, 2002-03  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 22/04/2004   
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Advertising and promotional expenses


This item includes all costs incurred by a business for promotional and publicity campaigns aimed at bringing the activities and services of the business to the attention of consumers for the purpose of increasing sales.


Advertising on behalf of clients


This item represents the total cost of advertising clients' properties. This comprises costs recorded in the business's profit and loss account and costs recorded in separate trust accounts.


Auction


An auction refers to the process where land and properties are sold via a public sale at which the property is sold to the highest bidder and is mediated by a third party called an auctioneer.


Average annual percentage change


A percentage change, p, from 1998-99 to 2002-03 is converted into an average annual change, a, as follows:


a = (1 + p) 1/4 -1


The average annual percentage change is not an arithmetic average of the actual percentage changes from year to year. It is labelled the 'average' change because if any value increases by a% every year for four years, then at the end of the four years it will have grown by a total p%.


Bad and doubtful debts


Bad and doubtful debts is the amount of accounts receivable that are either written off, or estimated to be uncollectible during an accounting period, that are expensed in a period's profit calculations.


Body corporate


This refers to a residents' or owners' committee whose responsibility is to manage common areas, resolve conflict between tenants and look after any other issues that affect tenants or owners.


Body corporate management fees


This refers to income derived from administering body corporates.


Capital city and suburbs


Capital city and suburbs refers to the greater metropolitan area of the capital city of each state and territory in Australia.


Car allowances paid to staff


These are payments made by businesses to staff for motor vehicle expenses. They are a reimbursement for motor vehicle expenses incurred by staff in using their own vehicle for business purposes.


Casuals


Casual employees are those persons directly employed by the business who are not entitled to paid leave.


Computer software expensed


Computer software expensed is the cost of computer software that has been fully charged to profit as an expense in the current accounting period.


Corporate advertising and promotional expenses


These are advertising expenses relating to the promotion of the business as distinct from the promotion of clients' properties.


Depreciation and amortisation


Depreciation and amortisation are financial charges made in the accounts to reflect that part of the value of the asset which may be regarded as having been used up in producing revenue in a particular accounting period. Depreciation generally refers to physical (tangible) non-current assets, and amortisation generally refers to intangible non-current assets.


Employees


Employees are all persons working for this business who receive remuneration in any part of the reference period, excluding working proprietors and partners.


Employer contributions to superannuation funds


Employer contributions to superannuation funds are the cost of the employer's contributions during the reference period made on behalf of employees including salary sacrificed amounts.


Employment at end June


Employment represents all employees and working proprietors and partners on the payroll for the last pay period ending in June. Employees absent on paid or prepaid leave are included. Non-salaried directors, subcontractors and persons solely paid by commission without a retainer are excluded.


Franchise


These are businesses which operate under a franchise agreement. Franchisees typically trade solely under the franchise name and benefit from centrally provided advertising and training programs.


Franchise fees and royalties expenses


This includes payments made under licensing agreements. It excludes management fees, advertising expenses and marketing/training group fees.


Franchised real estate agents


This includes real estate agents who are either part of a franchise, marketing group or cooperative.


Fringe benefits tax


Fringe benefits tax is payable by employers when certain benefits in excess of normal wages or salaries (e.g. free or discounted goods or services) are received by their employees (or associates of employees) in connection with their employment.


Income from consulting fees


This includes income from providing advisory services to individuals or businesses with regard to real estate issues.


Income from conveyancing work


This is income received on a fee for service basis relating primarily to facilitating the legal transfer of property titles.


Income from property management commissions


This item primarily represents income received for managing a residential or non-residential rental property on behalf of a property owner. Also included in this item is income from body corporate management fees.


Income from property sales commissions


This is income a business receives for selling land and property on behalf of another business or individual.


Income from property sales and leasing commissions


This item is the sum of income from property sales commissions and leasing/letting commissions/fees.


Income from property valuations


This is income received for the provision of property valuations by a property valuer.


Industry value added (IVA)


Industry value added for market producers is an estimate of the difference between the value of the output of an industry and the purchases of materials and selected expenses incurred in the production of that output. For market producers, it has been derived by determining the income associated with the production (in this case sales of goods and services, changes in level of trading stock inventories, operational funding from government and capital work done by own employees for own use or for rental or lease), and subtracting the direct costs of producing these outputs (purchases of goods and services used in production of goods for resale and selective expenses related to the sale of goods and administrative expenses, exclusive of indirect taxes such as payroll tax, fringe benefits tax, land tax and land rates).


Insurance premiums


Insurance premiums are expenses incurred by an organisation in respect of different types of insurance policies but excluding workers' compensation and compulsory third party motor vehicle insurance.


Interest expenses


Interest expenses are outflows of funds related to the cost of borrowing money.


Interest income


Interest income is income earned through the lending out of funds owned by the entity.


Labour costs


These include staff related costs such as wages and salaries, fringe benefits tax and payroll tax, employer contributions to superannuation, workers' compensation premiums, and provision expenses for employee entitlements.


Leasing/letting commissions/fees


This item refers to fees paid to agents when they have successfully signed a tenant to a property.


Marketing group or cooperative


These are businesses which operate under a marketing group agreement. These businesses benefit from common advertising and other assistance. They typically use a trading name consisting of the individual entity and suffixed with the marketing group name.


Marketing group/cooperative fees


These are fees paid by independent agencies for affiliation with a marketing group or cooperative.


Motor vehicle running expenses


Motor vehicle running expenses are the costs incurred using 'on-road' motor vehicles owned by the business for business purposes.


Multi-list fees


This refers to fees paid on behalf of clients to other real estate agents when a property has been sold by more than one real estate agent business.


Non-franchised real estate agents


These are real estate agent businesses that do not operate under a franchise, marketing group or cooperative agreement.


Non-residential properties


This refers to property that is predominantly used for commercial purposes and is not usually utilised for residential activity.


Offices/locations at end June


An office or location is a physical site from which the business provides real estate services on a regular basis.


Operating profit before tax


This item is a measure of profit (or loss), during the reference period, taken before extraordinary items are brought into account and prior to the deduction of income tax and appropriations to owners (i.e. dividends paid, drawings). It is generally derived by subtracting total expenses from total income, and adding the difference between closing inventory and opening inventory for the period.


Operating profit margin


This represents the percentage of a business's sales of goods and services which becomes profit after all operating expenses have been deducted. It is derived by expressing total operating profit before tax (OPBT) as a percentage of total sales of goods and services.


Other contract, subcontract and commission expenses


These include payments to other businesses and self-employed persons for work done or sales made on a contract or commission basis and payments to persons paid by commission without a retainer. Payments to contractors and consultants for repair and maintenance are excluded, as are commissions paid to employees or persons receiving a retainer.


Other expenses


This includes title search fees, land taxes, bank charges, electricity, gas and water charges, postal and subscriptions to business and professional organisations.


Other income


This item includes commissions received on sale of insurance, auctioneering fees (other than real estate), income from franchise fees, funding from Federal, state and local government, royalties, net profit (loss) on sales of fixed tangible assets, dividend income, net profit (loss) on share trading, and net profit (loss) on foreign loans as a result of variation in foreign exchange rates/transactions. It excludes extraordinary profit (loss), i.e. not associated with the normal operations of the business and of a non-recurring nature.


Other insurance


This item includes optional third-party and comprehensive motor vehicle insurance premiums, fire, general, accident and public liability and income maintenance insurance premiums.


Other property sales


This refers to the sale of land and properties by tender i.e. where offers are submitted by potential purchasers by a set date. This excludes sales by auction and by private treaty.


Other real estate services


This refers to businesses whose main activity involves non real estate agent services, for example, property valuation, conveyancing, auctioneering, and body corporate management.


Other rent, leasing and hiring income


This includes income from operating leases, sub-leases and from the rent, leasing or hiring of property owned by a real estate agent business.


Paper, printing and stationery expenses


Paper, printing and stationery expenses are costs incurred for office supplies and printing carried out by or for the business.


Payments to employment agencies for staff


These are payments made to an employment agency for the supply or recruitment of staff.


Payroll tax


Payroll tax is a tax levied by state and territory governments upon the amount of wages and salaries paid by a business.


Permanent full-time employees


Permanent full-time employees are those who work 35 hours or more per week, and are entitled to paid leave.


Permanent part-time employees


Permanent part-time employees are those who work less than 35 hours per week, and are entitled to paid leave.


Private treaty


This refers to the sale of land and properties where the sale price is set by the vendor and offers are submitted by potential purchasers via a tender-like system.


Professional indemnity insurance


Professional indemnity is a general insurance which covers the practice against a third party's financial loss as a result of advice provided to the third party.


Property listings


This refers to lists of properties on the market for sale or lease. It can relate to either web listings which are virtual lists of properties that can be accessed via the web or hardcopy lists available via printed media.


Property manager (commercial)


This refers to a real estate occupation where the main duties include supervising the leasing of commercial rental properties on behalf of owners.


Property manager (residential)


This refers to a real estate occupation where the main duties include supervising the leasing of residential rental properties on behalf of owners.


Property valuation service


This is a service provided by qualified property valuers on a fee for service basis. It involves calculating the market rate for land and/or dwellings.


Real estate agency manager


This refers to a real estate occupation where the main duties include coordinating the activities of agency salespersons in selling and leasing real estate.


Real estate agent


A real estate agent is a business whose main activity is selling (e.g. by auction or private treaty), purchasing, managing or renting real estate on behalf of third parties.


Real estate salesperson (commercial properties)


This refers to a real estate occupation where the main duties include arranging the sale and lease of commercial properties and assisting buyers to find suitable properties.


Real estate salesperson (residential properties)


This refers to a real estate occupation where the main duties include arranging the sale and lease of residential properties and assisting buyers to find suitable properties.


Rent, leasing and hiring expenses


Rent, leasing and hiring expenses are those costs for the rent, leasing (excluding finance leases) and hiring of vehicles, land, buildings, machinery, equipment and any other property from other businesses or individuals.


Repair and maintenance expenses


Repair and maintenance expenses are costs associated with work undertaken on property and equipment to maintain normal business operations. This includes repair and maintenance on properties managed by the business where incurred as an operating expense.


Repair and maintenance register


This refers to a consolidated register of all managed properties that lists repair and maintenance carried out on these properties.


Residential property


This refers to property that contains at least one dwelling and usually has restrictions on commercial activity.


Telecommunication services


Telecommunication services are all payments (of a non-capital nature) for telecommunication services which engage wire, cable or radio transmission. They include the costs of fixed and mobile telephone services, facsimile services, Internet services and leased lines for computers.


Tenancies managed


This is the number of residential and non-residential tenancies under management at the end of June 2003.


Training services provided by other businesses


Payments to consultants, institutions or other businesses for the provision of staff training and education services.


Travelling, accommodation and entertainment expenses


Travelling and accommodation expenses are costs incurred for transportation services or in providing accommodation to staff when business activities occur away from the normal place of business. Entertainment expenses are the costs incurred for the provision of entertainment activities, either for staff of the business or clients.


Valuers/land economists


These refer to real estate occupations where the main duties include: for valuers, assessing the value of land, property, commercial equipment and merchandise, and for land economists, providing advice on the administration, commercial and operational use of land and property.


Wages and salaries


This item refers to the gross wages and salaries (including capitalised wages and salaries) of all employees of the business. The item includes severance, termination and redundancy payments, salaries and fees of directors and executives, retainers and commissions of persons who received a retainer, bonuses, and annual and other types of leave. Provision expenses for employee entitlements (e.g. provisions for annual leave and leave bonus, long service leave, sick leave, and severance, termination and redundancy payments) are also included. Payments related to salary sacrifice and payments to self-employed persons such as consultants, contractors and persons paid solely by commission without a retainer are excluded.


Working proprietors and working partners of unincorporated businesses


A working proprietor operates his or her own business (a sole proprietorship), while a working partner, along with one or more other partners, operates a partnership. Working proprietors and working partners are the owners of their business and as such, they are not considered to be employees of that business.


Web presence


Web presence includes a web site, home page or a presence on another entity's web site. A web site or home page is an electronic document that is accessed via a unique address on the World Wide Web. The document provides information in a textual, graphical or multimedia format.


Workers' compensation costs


Workers' compensation is a compulsory insurance cover taken out by all employers, except for self-insured workers, according to legislative schemes to cover employees suffering injury or disease in the course of or arising out of employment.