Technology is continuing to change the way we do things in all industries and real estate is no exception, with more new tools at our disposal than ever before.
In years gone by, agents and property managers might have been concerned about losing their jobs to technology. However, as the industry evolves it’s becoming more clear that real-life interactions with people aren’t going anywhere, and that technology can never replace real estate agents. Rather, technology exists to assist agents and make them more productive and better at their jobs.
If you’re thinking about ways to improve your agency or business, here are three reasons why now might be the perfect time to invest in technology.
On any given day, an agent's attention is typically pulled in many different directions. You have to speak with leads, manage negotiations, complete the back office work, talk to buyers, plan marketing campaigns and attend open homes. The list goes on.
With so many high priority tasks needing to be done urgently, you will find that time in the day quickly escapes you.
Technology offers a means to become more efficient and maximise the limited time that real estate agents have. In order to succeed, agents need to be looking at ways they are able to remove themselves from the day-to-day runnings of their business, so they can focus on the top revenue-generating activities. To do this they must remove themselves from mundane, repetitive tasks that can be allocated to someone else, or automated by technology.
Implementing quality technology within the office not only creates efficiencies within your operations, but also within your budget. By adapting tech that helps your businesses day to day functions run smoother, you'll also be able to eliminate functions that no longer serve your business and cut costs. Discover further cost cutting tips that every real estate agent should know by reading this blog.
Creating every efficiencies is how an agency or an agent can regain their time and take their business to the next level. Start by firing yourself, and incorporating technology to remove yourself from repetitive work.
Everyone wants a piece of you as an agent and when a vendor or buyer gets in contact, they invariably want everything right away. This is to be expected as real estate is ultimately a sales and marketing job and dealing with people is a large portion of what you do.
Problems usually start occurring when an agent has grown his business to such a point that they can no longer keep up by themselves. It’s only then that they start falling away in certain areas. One of the first areas to slip is response time. A sign that you may be scaling too quickly and need extra support is that you don’t get back to people and your level of customer service begins to decrease.
Adopting great technology is one of many ways you can continue to give high-quality service and spread your time further. Being able to reach people by text message or email, as well as storing details in your CRM will immediately improve your ability to handle customer service, and better understand your customers. There are also ever-improving tools like chatbots that act as an assistant of sorts that can help direct enquiries.
The ways technology can improve your business are unlimited. These days, there’s no excuse for poor customer service as any bottlenecks that you’re personally facing can usually be solved with better processes, more team members and better use of technology.
When we break down our week, no matter how smart or hard we work we always run into the same barrier in the end which is our time. After all, there is only a finite amount of time in each day.
If you’re working by yourself and selling your time for money, you will eventually hit a plateau with your earnings and also put yourself at a higher risk of burning out. That’s when we need to find ways to better leverage our time.
Technology is a great resource and with the potential to make a significant impact on the way we spend our time, allowing us to more effectively leverage the free time we do have.
A great example is the power of a quality CRM. Great real estate CRMs are custom built for the industry and tailored to suit your exact needs. Previously, real estate agents were limited by the number of leads they could contact in a day. With advancements in technology, and Prop Tech specially, agents can acquire and nurture more leads than ever before.
Utilising real estate technology allows you to do a lot more with your time, reach more people and ultimately scale your business. If you can’t scale your current operations, your business has a ceiling and is limited within its growth.
If you’re looking to move into the upper echelon of top-performing agents, then finding ways to scale your operations is essential.
Property prices have been weakening in most markets around the country, however, the rate of decline is now starting to slow.
According to CoreLogic, property prices fell 1% in January, slightly less than the 1.1% fall in December.
Every capital city posted a decline in property values through the month of January, led by Hobart (-1.7%) and Brisbane (-1.4%), while the smallest drops were recorded in Perth (-0.3%) and Darwin (-0.1%).
The most noticeable falls have been seen across the premium end of the housing market, where the country’s most expensive properties have led both the recent upswing as well as the current downturn.
Sydney’s median home price value below $1 million for the first time since March 2021, falling -1.2% in January, an improvement on December’s -1.4% decline.
Since their respective peaks, Sydney (-13.8%), Brisbane (-10.8% ) and Hobart (-10.8%) have so far registered the largest declines which are at or near record levels.
Source: CoreLogic
CoreLogic Research Director, Tim Lawless said the record declines in home values followed a record upswing, both in magnitude and speed.
“The national home value index was up a stunning 28.6% in the space of just 19 months,” Mr Lawless said.
“Despite the recent sharp drop in values, every capital city and rest-of-state region is still recording home values above pre-pandemic levels, although Melbourne’s index would only need to fall a further -0.4% before equaling the March 2020 reading.”
Regional housing values also continued to record a milder decline than their capital city counterparts, falling 0.8% last month.
Mr Lawless said regional areas have performed better than the city throughout the last housing cycle.
“Despite easing rates of internal migration and a partial erosion of the pre-pandemic affordability advantage, regional housing values are holding up better than capital city markets,” he said.
"This will be an interesting trend to watch over the longer term, but at the moment it seems regional housing markets have seen a structural shift in the underlying demand profile.
“With more Australians willing to base themselves outside of the capital cities and remote working remaining a viable option across some sectors of the labour force, it’s unlikely we’ll see a mass exodus from regional markets.”
Capital city dwelling sales over the past three months were -29.4% lower compared to the same period in 2022 and -11.5% below the previous five-year average.
Sydney (-40.6%), Melbourne (-39.8%) and Brisbane (-36.5%) have had the largest quarterly drop in sales relative to the same period last year.
Mr Lawless said it’s unlikely listing and purchasing activity will return to average levels until consumer sentiment starts to improve.
“There is a strong relationship between consumer attitudes and the number of homes sales,” he said.
“With sentiment remaining around recessionary lows, it’s harder for consumers to make high commitment decisions such as buying or selling a home.
“Until Australians have a higher level of confidence with regards to their household finances and the outlook for the economy, it's likely they will continue to delay major financial decisions.”
Rental growth picked up again in January as record-low vacancy rates and the surge in overseas migrants continues to put rental markets under extreme pressure.
Mr Lawless said tenants are now chasing more affordable options.
“After recording substantially larger increases through the worst of the pandemic, the rate of growth in house rents is generally easing in most regions, reflecting a transition of demand towards more affordable, higher density types of rental stock,” he said.
“In contrast, unit rents have seen a surge in rental growth over the past year.
“This can be attributed to a combination of affordability pressures driving more rental demand towards cheaper rental options, and a possible reversal in rental preferences as tenants once again seek out housing options closer to centres of amenity such as the CBD and transport hubs.”
Once interest rates move through a peak, it’s likely that housing values will stabilise.
Mr Lawless said there may be a few months’ lag before declines flatten out, and the market would need some form of stimulus before a new growth cycle commenced.
There’s also some downside risk from the large number of fixed-rate mortgages due to expire later this year.
He said two-thirds of fixed-rate home loans, which comprise a substantially larger portion of the loan book than historically normal, will expire in 2023, with many moving from interest rates around 2% to a rate closer to 6%.
“It’s likely mortgage arrears will rise from last year’s record lows, but the risk of a material increase in mortgage arrears or defaults should be minimised as long as labour markets remain tight,” Mr Lawless said.
“Although labour markets are expected to loosen throughout 2023, it’s unlikely the unemployment rate will rise above long-term average levels.”
Finally, low stock levels will also be a factor that helps keep price falls contained Mr Lawless said.
“Such low advertised supply has arguably helped to keep a lid on value declines, but a lift in supply without a commensurate rise in demand could prolong the downturn,” he said.
With a lower volume of transactions and the general property market continuing to cool down compared to the heights of last year, now is the perfect time to take a closer look at your business expenses and find ways to cut your costs.
For real estate agents, there are a number of business expenses that are vital, not only to continue doing your job well, but to also save time which is equally important. The key to cost cutting is to first identify what your main costs are, and then try to improve or consolidate where you can or cut them out altogether.
Here are some key areas to focus on when cutting costs.
There’s no doubt that technology has dramatically changed the game for most real estate agents over the past few decades. In todays market, technology tools can help make you more efficient as an agent, save you time and broaden your reach further than ever before.
In the PropTech era in which we find ourselves, new technology is evolving faster than ever before and new products are being released on a frequent basis. For agency's it’s important to continually assess the tools that you’re using to make sure you’re getting the most out of them and really maximising your technology stack.
The first step is to check that you’re not doubling up on technology. Many tools can do multiple functions and it’s important to make sure that you’re not paying for the same service twice.
Secondly, all of your systems should be well-integrated. You can easily pay for more tools than you might not otherwise need, simply because your current stack doesn’t integrate well. In many cases, you can find one great piece of software such as VaultRE, or Eagle Software, that can handle all of your needs at a more cost-effective price than paying for a number of different services that don't together in a cohesive way.
By selecting a comprehensive CRM as your starting point, you’ll have the benefit of saving time as you avoid integration issues and data loss across platforms. For a full guide on auditing your tech stack, check out our comprehensive article here.
Finally, you need to identify the best value for money. Oftentimes, platforms have different levels that will offer different features depending on your requirements. You might not need all the tools a platform has to offer, so you shouldn’t have to pay for them.
Automation is one of the seven essential features of any real estate CRM.
If you can save time, you will save money. That applies to a range of different areas of your business, so you should always be on the lookout for more effective ways of doing things and ways you can automate tasks.
If there is the option of replacing a tedious task that is done by a human, with technology, then that is a great starting point to save significant costs and the hassles that go with hiring and managing employees. However, the real estate industry includes a number of roles that thrive with the human touch, so it then becomes important to create ways to help your employees to become more efficient in their day to day tasks.
If you’re trying to cut down on costs, nothing beats great planning. The better you plan your overall business from the top down, the more effective and cost-efficient you can be.
That starts with your overall business plan and goals, down to the way you plan your day. You should be regularly doing planning sessions where you set both high-level long-term goals and short-term goals and work out how you’re going to achieve them. Learn you can effectively plan ahead and create realistic goals for yourself and your agency by reading our recent planning article.
Detailed planning and strategising makes you more goal focussed and efficient as a business and in the process will save you and your business both time and money.
The rollercoaster ride for property has seen values fall 5.3% over the course of the year - marking the largest decline since 2008.
According to CoreLogic, prices across the country fell another 1.1% in December, which was slightly more than the prior month. Values dropped 1.4% in Sydney, 1.5% in Brisbane, 1.2% in Canberra and Melbourne, while Hobart recorded the sharpest decline of 1.9%. Only Perth recorded a slight gain of 0.1% for the month.
Source: CoreLogic
Annual falls were the most significant in Sydney (-12.1%) and Melbourne (-8.1%) where conditions peaked early in the year. Hobart (-6.9%), the ACT (-3.3%), and Brisbane (-1.1%) also recorded an annual drop in housing values, while Adelaide (10.1%), Darwin (4.3%) and Perth (3.6%) saw a slight increase in prices.
CoreLogic’s research director, Tim Lawless, said home prices were initially rising in 2022 before the RBA started raising interest rates.
“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows,” Mr Lawless said.
“Since then, CoreLogic’s national index has fallen 8.2%, following a dramatic 28.9% rise in values through the upswing.
“The more expensive end of the market tends to lead the cycles, both through the upswing and the downturn. Importantly, recent months have seen some cities recording less of a performance gap between the broad value-based cohorts.
“Sydney is a good example, where upper quartile house values actually fell at a slower pace than values across the lower quartile and broad middle of the market through the final quarter of the year.”
While capital city markets have been experiencing sharp declines, regional values have remained relativity solid according to Mr Lawless, showing a 0.1% increase.
“Annual falls across Regional NSW (-2.7%) and Regional Victoria (-1.3%) offset annual gains across the remaining regional markets,” he said.
“Regional South Australia has been the stand out for growth conditions over the past year, with values up 17.1% through 2022.
“The well-known Barossa wine region led the capital gains with a 23.0% rise in values over the calendar year.”
Despite the slowdown in property prices, values still remain 11.7% higher than pre-COVID levels in the capital cities and 32.2% higher in regional Australia.
“Melbourne is the only capital city where the current downwards trend is getting close to wiping out the entirety of COVID gains, with dwelling values only 1.5% above March 2020 levels,” Mr Lawless said.
“The relatively small difference between March 2020 and December 2022 levels can be attributed to a number of factors, including a larger drop in values during the early phase of COVID, a milder upswing through the growth cycle and the -8.3% drop since values peaked in February.”
At the other end of the scale is Adelaide, where housing values remain 42.8% above pre-COVID levels. Adelaide dwelling values recorded a 44.7% gain through the upswing, and have held relatively firm since interest rates started to rise, down only -1.3% from the recent peak.
Across the country, levels of supply are still remaining low which is contributing to prices holding up relatively well.
Advertised supply levels ended 2022, 7.8% lower than last year and 19% below the previous five-year average.
The lower than normal flow of fresh listings added to the market over the past few months has been a key factor keeping overall inventory levels low.
“The trend in housing inventory showed a conspicuous lack of seasonality through spring and the first month of summer, with advertised supply holding reasonably firm post-winter,” Mr Lawless said.
“Vendors have been reluctant to test the market through the downturn, with the number of new listings over the past four weeks almost -31% lower than a year ago when capital city homes were selling in around 20 days.
“Today, the median time on market has increased to 31 days, leading to a blow out in vendor discounting rates from just 3.1% a year ago to 4.2% at the end of 2022.”
Source: CoreLogic
National rents increased a further 0.6% in December to be 2.0% higher through the December quarter and up 10.2% over the calendar year. Rents rose across every region and housing type across the country over the past year, ranging from a 4.0% rise in house rents across the ACT to a 15.5% increase in Sydney unit rents.
“As renters face worsening affordability pressures, it’s logical to expect more rental demand to transition towards higher density options, where rents are generally more affordable, or for rental households to maximise the number of tenants in a rental dwelling,” Mr Lawless said.
Mr Lawless said he expects house prices to continue to decline in early 2023 as the RBA pushes forward with further interest rate hikes, before starting to stabilise later in the year.
“Interest rates, or more specifically, mortgage rates, will be one of the main factors influencing housing market outcomes,” he said.
“The timing and magnitude of a peak in the cash rate remains highly uncertain, however at least one more 25 basis point lift seems all but certain.”
The other key concern in 2023 remains the fixed rate mortgage cliff that will see a large portion of borrowers with fixed rate loans rolling off to higher variable rates.
“As progressively more fixed rate borrowers become exposed to higher mortgage repayments, alongside variable rate borrowers, it is reasonable to expect mortgage arrears will gradually trend higher, albeit from record lows in 2022,” Mr Lawless said.
According to Mr Lawless, the next growth phase for property markets will need to be triggered by some type of catalyst.
“Historically, a new phase of growth in housing values has been associated with a catalyst or combination of stimulatory events such as falling interest rates, easing credit policies, or favourable government policy outcomes,” he said.
“Considering how important housing is to the household sector and broader economy, it’s possible any combination of these outcomes could come to fruition later in the year.”
As we settle into 2023, it’s vital that you act quickly and start thinking about the year, and look to find ways that you and your business can continue to improve.
Here are four things you should be doing to better prepare for the new year and set yourself up for success.
You’re not going to be able to improve unless you take the time to understand your past efforts. At the turn of the new year, one of the most important tasks you can do as a real estate agent or business owner is to review your year and analyse the areas that went well, but also the areas that need improvement.
A great start is to begin looking at where most of your leads are coming from, and then look to find ways to do more of those activities. You can also review how your team has performed, how efficiently your time has been spent, and also if your technology tools have been making your life and business better.
If you don’t have good data on things like your source of leads or where your time is going, you know that your first job this year is to start tracking these metrics so you can have a baseline to work with and improve upon.
You’re going to find it very difficult to continue to grow and succeed in business if you’re not setting goals. Goals give your business focus and direction and are crucial in measuring your success.
Start the year by sitting down with your team to discuss and start setting goals. Keep in mind that while it’s great to have big goals around profits and money, it’s more important to set progress goals that will guide you to your larger scale growth goals.
You want to target things that are in your control so that you know if you achieve them, you will be well on your way to hitting your financial goals as well.
A great example would be how many prospecting phone calls you and your team make every week. You might know that if you make 100 calls per week, you will get 10 leads, which culminate in one listing. Use your analytical data to work backwards and try and hit your financial targets with process-driven goals.
Most successful people are very stringent with their daily routines. They often do the exact same things every day at the same time which this allows them to be laser-focused in what they are doing.
If you haven’t established a routine for your week, then it’s likely that you’re losing a lot of time simply by lack of structure. Start now by planning out your calendar in advance and don’t forget to book in breaks and things like family time.
You can work backwards from your list of process goals to outline how many hours each week you need for various tasks that will allow you to maximise your time and grow your revenues.
If you’re going to grow and reach the elite levels of real estate, you’re not going to be able to do it alone. The earlier you can build a team and incorporate technology into your business the faster you're going to be able to grow.
The first place to start is usually by adding well-integrated technology tools like a quality CRM that allows you to reach more people and maximise your time.
After that, it’s time to start thinking about adding team members. You can start with a virtual assistant and then look to expand with people who can help with the backend and admin worth, before trying to add more sales associates.
Your goal when building processes is to try to remove yourself from as much of the day-to-day work as you can. So you can put all your time and attention into the activities that generate the most revenue for your business.
The rate of property price falls are starting to slow down across the country despite interest rates continuing to increase.
According to CoreLogic, national property prices slipped 1.4% in September, a slight reprieve from the 1.6% fall in August.
Sydney continues to be the hardest-hit capital market, with values falling 1.8% in September, followed by Brisbane at 1.7%. Hobart prices dropped 1.4% while Melbourne fell 1.1% and Canberra 1.6%.
Notably, both Perth and Adelaide markets, which has been holding up well, have now also started to trend lower, dropping 0.4%, and 0.2% respectively.
Source: CoreLogic
CoreLogic's research director, Tim Lawless said it is too early to suggest the market has moved through the worst of the downturn.
"It's possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now 'priced in' further rate hikes." Mr Lawless said.
"However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again."
Mr Lawless said the slowdown in the rate of decline came alongside an improvement in other indicators. "Auction clearance rates also trended upwards, albeit subtly, in September and consumer sentiment nudged a little higher as well on the back of strong labour market conditions," he said.
"We've also seen the flow of fresh listings continue to slide through the first month of Spring, which is uncommon for this time of year."
After rising 25.5% over the past few years, housing values across the capital cities are now 5.5% below the recent peak.
Regional markets which recorded stronger growth through the upswing (41.6%) are now seeing values drop also, down -3.6% through to the end of September.
Most cities continue to see a substantial buffer between current housing values and where they were at the onset on COVID-19 in March 2020.
At the combined capital city level, housing values would need to fall a further 13.5% before wiping out the gains of the recent growth cycle.
Mr Lawless said there are still very different market conditions across different areas of the country.
"We are still seeing some resilience to value falls around the more affordable areas of Adelaide and Perth, as well as some regional markets associated with agriculture, mining, and tourism," he said.
The largest falls have been concentrated in areas of Sydney's Northern beaches, including Warringah, Pittwater, and Manly, where housing values are down at least 14.5% since moving through a peak in early 2022, as well as flood-affected areas across Richmond - Tweed.
"These areas saw housing values rise between 38% and 62% through the growth cycle, so most home owners are still well ahead in terms of equity in their home," Mr Lawless said.
Mr Lawless said one key reason for the slowing falls in property prices is because listings haven't continued to surge.
The number of new listings added to capital city housing markets over the four weeks ending September 25th was 12% lower than the same period a year ago, and now 10% below the previous five-year average.
Darwin and Canberra are the only exceptions, with both cities recording higher listings over the past four weeks.
"It seems prospective vendors are prepared to wait out the housing downturn, rather than try to sell under more challenging market conditions," Mr Lawless said.
"We haven't seen any evidence of distressed sales or panicked selling through the downturn to date; in fact, it has been the opposite, with the trend in newly listed properties continuing to diminish at a time when freshly advertised stock levels would normally be moving through a seasonal ramp up."
While the flow of new listings is seasonally low, total advertised inventory is holding firm or rising in most regions. Across the combined capitals, total advertised stock levels are tracking 7% higher than the same time last year, but are still 15% below the previous five-year average.
Higher than average stock levels in some cities is more a reflection of less demand, than too much supply being added to the market, according to Mr Lawless.
Source: CoreLogic
Meanwhile, despite the tight vacancy rates around the country, the national rental index increased by only 0.6% in September, the lowest monthly rise in rents since December 2021.
According to Mr Lawless, the slowdown in rental growth is a little surprising given rental vacancy rates remain so low and overseas migration is ramping up, although there has been a subtle uptick in vacancy rates across some regions.
"A gradual slowdown in rental growth in the face of such low vacancy rates could be an early sign that renters are reaching their affordability ceiling," he said.
Since the onset of COVID, capital city rents have risen 16.5% and regional rents are up 25.1%.
"It's likely renters will be progressively seeking rental options across the medium to high density sector, where renting is cheaper, or maximising the number of people in the tenancy in an effort to spread higher rental costs across a larger household."
Further evidence of a shift of rental demand towards higher density options can be seen in the higher growth rate of uni rents over house rents.
"A material rise in rental supply seems a long way off, considering private sector investment activity is trending lower and a larger than normal portion of for sale listings are investor-owned properties," Mr Lawless said.
Mr Lawless said going forward, the most important factor influencing housing market will be the trajectory of interest rates, which remains highly uncertain.
"The cash rate has surged 225 basis points higher through the tightening cycle to-date; interest rates have not risen at this fast a pace since 1994, when households were arguably less sensitive to a sharp rise in the cost of debt," he said.
"In the September quarter in '94, the ratio of housing debt to household disposable income was just 46.8. The impact of a higher cost of debt is far more meaningful now, with a housing debt to household income ratio of 143.7 recorded in March 2022."
Financial markets are now pricing in a peak in the cash rate around 4.1% between June and August of next year, while private sector economists are generally less bearish, with Bloomberg recently reporting a median forecast of 3.35% as the peak cash rate in the first quarter of next year.
Once interest rates stabilise, housing prices are likely to find a floor. Considering most economists are forecasting rates to peak through the first quarter of next year, the coming months are likely to feature further declines in home values.
"We will be watching for any signs of market distress as the dual impact of higher interest rates and high inflation impact household budgets," Mr Lawless said.
"To date, the flow of new 'for sale' listings has actually trended lower as vendors retreat to the sidelines, a good indicator that home owner are weathering the downturn."
