Australian Real Estate has had a magic run over the last 3-5 years. If you have been selling Real Estate over the past 5 years, you could be forgiven for complaining that the market is now on the softer-side and the industry is getting tough to operate in... but I beg to differ.
This is all shaping up to be the hottest market for Real Estate Agents in history...if you see what I see... let me explain...
We all know the reasons why the market is softening. We have a horrible Government that couldn't manage the school tuck-shop, no real manufacturing industry, higher interest rates, manufactured inflation of goods and services and a Mining sector in free-fall, which is Australia's other big income producer.
Of all the countries in the world, Australia should not be struggling in the slightest, but our Government's would rather sell our assets than control them, and were going to pay the price in the coming years for that mistake...
We should be the UAE of the west...with glistening tower cities paved with gold...
It seems the only reason why the housing market prices haven't gone into full blown free-fall is because of immigration and the demand for new Australian's to find somewhere to live... This is creating it's own issues, but that's not a blog for me...
Investors are bailing out of the market because of increases in Land Tax, Increases in Management Fees, Increases in Interest Rates, Increases in Insurances and the cost of living etc... the numbers just don't stack.
Why should any investor be putting their hand deep, deep into their pockets to cover the shortfall on a mortgage each month to give someone else a roof over their head? If the rent doesn't cover the mortgage payment, can you even call it an smart investment? If you want to know why Rents have increased then that's why... and rightly so... It costs huge money to own Property in Australia and investors have been footing the bills...
Buyers who bought over the past 3-years are probably feeling the savage pinch of the unscrupulous consecutive interest rate rises which naturally drove the prices of goods and service up along side it. Scraping up enough to pay the mortgage could be leaving them with hard decisions on whether to sell-up and go rent somewhere..
Real Estate is a market and like all markets, there are upward and downward trends and cycles, and it seems like we've had the peak and we're rolling down the other side. Is it great news if you bought in the last 3 years during the peek prices....no. If you're an Agent that sells Real Estate, should you care? No... Why?
Why Agencies and Agents should be scaling now...
More property is going to come on the market from here out. If investors off-load some of their poorer under-performing properties and some of the higher-leveraged home owners cant hold-out for interest rates to ease (there are no promises that that will ever happen), then listings should rightly be much easier to get.
More property coming on the market from owners that need to off-load will naturally drive prices down, and they just cant expect that they will get their "Preferred Price". Sure, property might take a little longer to sell, it might not sell at the price the owner wants, but the volume of available listings will go through the roof...and this is the opportunity if you sell Real Estate.
Boots on the ground to capture more of the available market is how to win this war...
So what a $1.3m property is now only attracting $1.1m offers. Most would still be wrapped to sell a $1.1m property and I think most Agents would be totally fine with the commission from a $1.1m sale.
If more properties come on the market, there is an opportunity to list 2x, 3x, 5x more property under your banner and the commission could easily increase your earning capacity by 2-5x revenue in a buyers market.
All Agents need to do is get comfortable with managing sellers expectations. Sure, if you're not comfortable telling an owner that there is a big chance they are not going to get the price they want in this market...you may as well pack-up now and start applying for Jobs at Coles.
Agencies should be recruiting like crazy to ensure they have enough skilled Agents on the ground to take advantage of this new cycle. The more available properties that list, means a solid upward revenue growth opportunity for the Agency and and the Agents.
If you're looking to scale your Agency in this new market by Recruiting the right people, call any one of the Recruiters at Placed Australia Real Estate Recruitment. We can help hunt down the right Agents & Operations staff and attract them to your business.
Agree with your political views and some areas will have more supply but here in Noosa we have not seen any investor movement. When you assess the market demand is high and property replacement can’t get cheaper. All about timing. A good skilled salesperson will always be an asset. Happy selling