After seeing some of the strongest price growth so far this year, both Perth and Adelaide have now joined the other major capital cities with declining prices.

The latest data from CoreLogic shows that property values across the country fell 1.8% last month, led by a 2.3% decline in Sydney prices.

Brisbane prices dropped 1.8%, Hobart and Canberra fell 1.7% while Melbourne was 1.2% lower. Darwin was the only capital city market to record price growth last month.

Change in Dwelling Values Index Results as at 31 August 2022

Source: CoreLogic

CoreLogic’s research director, Tim Lawless, said Brisbane’s market had finally started to slow down after almost two years of growth.

“It was only two months ago that the Brisbane housing market peaked after recording a 42.7% boom in values,” Mr Lawless said.

“Over the past two months, the market has reversed sharply with values down -1.8% in August after a - 0.8% drop in July.”

According to CoreLogic, it’s not just the capital cities that are experiencing declining prices. Regional markets are also starting to turn down after what has been a record-setting few years of price growth.

Regional home values were down -1.5% in August compared with a -1.6% fall in values across the combined capitals. Between March 2020 and January 2022 regional dwelling values surged more than 40% compared with a 25.5% rise for the combined capitals.

“The largest falls in regional home values are emanating from the commutable lifestyle hubs where housing values had surged prior to the recent rate hikes,” Mr Lawless said.

“Over the past three months, values are down -8.0% across the Richmond-Tweed, -4.8% across the Southern Highlands-Shoalhaven market and -4.5% across Queensland’s Sunshine Coast.“

The annual trend in housing values is rapidly levelling out. After moving through a peak annual growth rate of 21.3% in November last year, the annual growth rate across the combined capitals has eased back to just 2.2%. Values across Sydney (-2.5%) and Melbourne (-2.1%) are now below the level recorded this time last year.

Despite the recent weakness, housing values across most regions remain well above pre-COVID levels. Home values in all capital cities and rest-of-state regions, bar Melbourne, remain 15% or above the levels recorded in March 2020, implying most home owners have a significant equity buffer before their home is likely to be worth less than what they paid.

“A 15% peak to trough decline would roughly take CoreLogic’s combined capitals index back to March 2021 levels,” Mr Lawless said.

“Additionally, many home owners would have had at least a 10% deposit and paid down a portion of their principal, the risk of widespread negative equity remains low.”

Mr Lawless said he expects the downturn will continue to play out through the remainder of the year, and possibly into 2023.

“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” he said.

“From current levels, interest rates are likely to increase by at least another 75 basis points and there is a good chance advertised stock levels will accumulate through the spring selling season, providing more choice for buyers and adding further downwards pressure on housing values.”

Listings rise in Spring

According to Mr Lawless, higher advertised stock levels are mostly the result of less housing demand rather than a rise in the number of new listings being added to the market. Nationally, CoreLogic estimates the number of home sales over the three months to August was -14.8% below the same period a year ago, but larger declines were evident across some cities including Sydney (-35.4%), Canberra (-18.9%) and Melbourne (- 16.5%).

“Between winter and spring we typically see a 22% rise in the number of new capital city listings based on the pre-COVID five-year average,” Mr Lawless said.

The flow of new listings this spring season may not be quite as active with the housing downturn dissuading some prospective vendors, but we are likely to see more listings added to the market than in winter.

“At the same time we are expecting to see less buying activity as higher interest rates and low sentiment continue to weigh on demand. Should this scenario play out, the net result will be an accumulation of advertised supply that could further weigh down values.”

Rent growth slows

Rental rates increased a further 0.8% in August according to CoreLogic’s national rental index, down from 1.0%.

The slowdown in rental appreciation comes after annual rental growth reached double digits (10.0%) for the first time since at least 2006 when CoreLogic rental statistics commence. The slowdown was most evident across regional Australia, where the annual rate of rental growth eased from 12.5% in November last year to 10.1% over the 12 months ending August. Growth in capital city rental trends look to be easing a little as well, with the combined capitals recording a 10.0% rent rise over the past year, while the monthly trend eases from a recent peak of 1.1% in May to 1.0% in August.

“This trend is reversing as tenants become more willing to rent in higher density situations, especially in Sydney and Melbourne where unit rents are now rising at a much faster pace than house rents,” Mr Lawless said.

“Potentially we are seeing the first signs of smaller rental households that formed earlier in the pandemic reverting back to larger households or utilising higher density rental options to combat worsening rental affordability.”

Source: CoreLogic

Interest rates are key

The outlook for the housing market remains intertwined with the trajectory of interest rates. Forecasts for the terminal cash rate generally range from the mid-2% to the mid-3% range, although financial markets are pricing in a peak cash rate of just over 4% by August next year. Mr Lawless said the range of forecasts for the cash rate highlights the sheer uncertainty associated with inflation, wages growth and monetary policy.

“As borrowing power is eroded by higher interest rates and rising household expenses due to inflation, it’s reasonable to expect a further decline in consumer confidence and lower housing demand,” Mr Lawless said.

Mr Lawless said that while interest rates are hurting property prices, it is also helping with affordability in many areas.

“The wash up is that lower housing prices and higher incomes should make home ownership more achievable for non-home owners, but headwinds remain in being able to save for a deposit and demonstrate the ability to service a loan amid such a high cost of living,” he said.

“With spring upon us, advertised stock levels are expected to rise. Inventory was already higher than average across some markets at the end of winter (Sydney/Melbourne/Hobart) and, although the flow of new listings may not be as high as previous years, we could see advertised supply accumulating through spring due to a lack of housing demand.

“Amid higher advertised stock levels, vendors will be competing across a larger pool of available supply for fewer buyers. While this is positive news for buyers, sellers will need to be realistic in their pricing expectations and ensure they have a quality marketing campaign in place.”

Although housing values are on track to record a significant drop, the risk of widespread negative equity remains low, considering the substantial rise in housing values between September 2020 and April 2022. Nationally home values rose by 28.6%; so even a 20% decline in housing values would result in housing values remaining above their pre-COVID levels.

 

 

Complete Guide to Real Estate Websites

Property prices are continuing to soften with both Sydney and Melbourne leading the falls across the country.

According to the latest data from CoreLogic, national property values fell 1.3% in July, with Sydney down 2.2% and Melbourne's values dropping by 1.5%.

The previously rampant Brisbane market also dipped into negative territory for the first time in nearly two years, falling -0.8%, while Canberra (-1.1%) and Hobart (-1.5%) were also down over the month.

Perth's growth in values has seen a sharp reduction, but it still managed to achieve a small 0.2% gain, while Adelaide (+0.4%) and Darwin (+0.5%) also showed positive growth.

Change in Dwellings - Index results as at July 31

Source: CoreLogic

CoreLogic's Research Director, Tim Lawless, said rising interest rates are likely to cause price to continue to soften.

"The rate of growth in housing values was slowing well before interest rates started to rise, however, it's abundantly clear markets have weakened quite sharply since the first rate rise on May 5," Mr Lawless said.

"Although the housing market is only three months into a decline, the national Home Value Index shows that the rate of decline is comparable with the onset of the global financial crisis (GFC) in 2008, and the sharp downswing of the early 1980s."

"In Sydney, where the downturn has been particularly accelerated, we are seeing the sharpest value falls in almost 40 years."

Regional markets have also weakened, with the combined regional index recording the first monthly decline (-0.8%) since August 2020. Dwelling values were down across Regional New South Wales (-1.1%), Regional Victoria (-0.7%), Regional Queensland (-0.7%) and Regional Tasmania (-0.6%), while values continued to trend higher in Regional SA (1.1%) and Regional WA (0.1%).

Overall, regional markets are still outperforming their capital city counterparts, but this month's figures show major regional centres are not immune to falling home values.

"Dwelling values across CoreLogic's combined regionals index were up 41.1% from the pandemic trough to the June peak, compared with a 25.5% rise across the combined capitals index," Mr Lawless said.

"The stronger growth reflects a significant demographic shift towards commutable regional markets, which is likely to have some permanency as more workers take advantage of formalised hybrid employment arrangements."

Most of the regional centres adjacent to Sydney, Melbourne and Brisbane (including Geelong, Ballarat, Illawarra, Newcastle and Lake Macquarie, the Southern Highlands & Shoalhaven, the Gold Coast and Sunshine Coast) recorded a decline in home values over the three months to July, marking the end of nearly two years of significant capital gains.

After seeing a slower rate of growth during the past few years, unit values are now holding up strongly compared to houses, with values down -1.0% compared to -1.5% for houses.

"This trend is most apparent across the three largest capitals as well as Canberra, where housing affordability challenges may be deflecting more demand towards the medium to high density sector," Mr Lawless said.

"Additionally, firmer interest from investors should favour the unit market over houses where demand has historically been more concentrated."

Listings on the Rise

Listings continue to trend higher across much of the country, however, there is a growing divergence between the major capital cities and the smaller locations.

In Sydney and Melbourne, total listings are already 8 to 10% above five-year averages, however Brisbane, Adelaide and Perth are recording advertised supply levels that are more than -30% below the five-year average, suggesting a faster absorption through the growth cycle to-date.

Notably, CoreLogic's estimate of sales activity over the three months to July was -16% lower relative to the same period in 2021.

The national figures are heavily impacted by an estimated -39.8% drop in sales across Sydney and a -26.3% fall in Melbourne sales, relative to the same period a year ago. Stronger markets such as Adelaide and Perth have recorded a rise in activity, with the estimated volume of sales up 21.6% and 7.2% respectively.

"It's important to remember the context of these statistics," Mr Lawless said.

"While national home sales are falling from record highs, they are still 9.2% above the previous five-year average for this time of year.

"There is a good chance the number of properties sold in the second half of this year and into 2023 will continue to trend lower as higher interest rates, a more cautious lending environment and a reduction in household confidence continues to weigh on housing demand."

Source: CoreLogic

Rents Still Pushing Higher

Rents continued to trend higher through July, rising 0.9% nationally over the month to be 2.8% higher over the rolling quarter and 9.8% higher over the past 12 months.

The trend in rising rents is evident across each of the capital city and broad rest of state markets, led by Brisbane with a 4.2% rental rise over the three months to July, to a 0.3% rise across regional NT.

Mr Lawless said rental markets are extremely tight, with vacancy rates around 1% or lower across many parts of Australia.

"The number of rental listings available nationally has dropped by a third compared to the five-year average, with no signs of a lift in rental supply," he said.

“On top of already tight rental supply, it’s likely demand will continue to increase as overseas arrival numbers climb."

“Such widespread and rapid rental growth is likely to remain one of the key domestic factors pushing up inflation, along with construction, food, transport and energy costs.”

While some of these can be attributed to global supply chain issues, the rental situation is a domestic one, caused by a combination of tight supply and amplified demand, according to Mr Lawless.

“Logically, we will probably see a reversal of the pandemic trend towards smaller rental households as tenants look to maximise their occupancy and spread rental costs across a larger household.

“To this end, rental values are rising fastest in the more affordable unit sector as tenants seek out cheaper rental options.”

Annual Change in Rents, Houses vs Units

Source: CoreLogic

Looking Forward

The outlook for national property markets remains uncertain as the RBA continues to move forward with higher interest rates to combat inflation.

“As borrowing power is eroded by higher interest rates, and rising household expenses due to inflation, it’s reasonable to expect a further loss of momentum in housing demand,” Mr Lawless said.

Mr Lawless said this interest rate hiking cycle may be short and sharp, with financial markets and some economic forecasters now factoring in interest rate cuts through the second half of next year.

“When interest rates start to stabilise, or potentially reduce next year, this could be the cue for housing values to find a floor,” he said.

“Similar to the trajectory of the upswing, this downswing phase could be a short but sharp one, depending on how high and fast interest rate settings go.”

The spring selling season will test the depth of housing demand where historically the flow of new listings has surged through spring and early summer, typically reaching a peak in late November Mr Lawless said.

“The rise in freshly advertised stock may not be met with a commensurate lift in buyer demand, resulting in higher levels of housing inventory.

“By late spring or early summer, we could be seeing advertised stock levels trend higher than normal,” he said.

“Vendors are likely to be more competitive across a smaller pool of active buyers, which would drive clearance rates lower across auction markets, and could result in longer selling times and larger discounting rates for private treaty sales.”

 

10 Habits of Highly Successful Real Estate Agents

Each year, we all become more reliant on technology than we ever have before, and that certainly includes the real estate industry.

Industries that have traditionally always been ‘people’ focused, centring around building relationships, can sometimes be overlooked when it comes to adopting technology but that would be a huge mistake. Technology has the ability to make us better at our jobs and more efficient.

Technology can help streamline existing processes and reduce the inefficiencies within the real estate industry – here are some of the areas that agents or agencies can adopt to improve how they perform within an increasingly competitive industry.

Removing Repetitive Tasks

While a lot of what an agent does on a daily basis involves building relationships and working with people, there are still a lot of small repetitive tasks that can be eliminated.

Things like tracking potential clients with a CRM, or getting rid of paperwork with smart apps are just some of the examples of how technology is already improving the lives of many agents.

Having access to the data you need, when you need it, will help real estate agents make smarter, more strategic decisions within their business everyday.

For more information on the top five tools you should be looking for in your real estate CRM, please watch this on-demand webinar.

Any task that is repetitive and does not require a person to physically do can potentially be removed with automation and technology. That frees agents up to focus on the big picture items that have the most impact and generate the most revenue. There’s also the potential to continue to streamline the entire sales process, which could see things like settlement times significantly reduced.

New Marketing Avenues

While traditionally buyers have always needed to view properties in person through home opens, over the last few years, this has changed.

With the advent of technology like virtual reality and 3d tours, it’s possible to get a real feel for a property without ever needing to visit. This is especially important for investors who would be willing to purchase a property without ever setting foot in it. As the quality of this technology continues to improve, there will likely be more avenues to get people to view a property.

Better Valuations

While an agent on the ground is still very good at estimating what a property might be worth, the advent of technology such as AI is really helping to generate very accurate prices for properties.

As the ability to access data only increases over time, so will the accuracy of how a property might sell. Agents need to understand how to market a property based on the level of interest it is likely to attract and using tools that can assist them will help going forward.  You can also choose to integrate your CRM with data providers such as RP Data or PriceFinder, to get accurate valuation estimates without leaving a single platform.

More Effective Marketing

We all know just how good the likes of Facebook and Google are at finding potential customers for advertisers. Their whole business is built around using data and matching would-be buyers and sellers to all sorts of products and services.  This approach is incredibly targeted and has changed the way marketing is done within a generation.

As machine learning and AI continue to evolve, these platforms and others will continue to be able to provide incredibly targeted ads to customers. There will also be the ability to better build your brand through using the various social media platforms and their targeting algorithms.

Similarly, enhanced marketing tools that integrate with your real estate CRM, can help you generate higher quality leads at a much lower cost.  This on-demand webinar will give you many more tips on how to generate more leads for your real estate business.

Greater Efficiencies

With cost-effective technology increasingly available, it’s critical that you keep on top of the latest trends and most effective platforms to market your properties or you’ll be a step behind the competition.   

Want to learn more?  Book a chat or demo with one of our tech stack consultants, we would love to help!

Book a Demo

New listings are the lifeblood of a real estate agent and when they start to dry up, it can make for a tough time.

Fortunately, there are a number of things agents can do to make sure their pipeline is always full and there are always new listings on the horizon.

Here are three things you may need to improve on if you find you aren’t winning listings on a regular basis.

Lack of prospecting

Most agents understand that closing a transaction is the very end result after a long process, which begins from the first time you come in contact with a would-be vendor.

If you aren’t winning listings at the moment, it’s most likely that if you look back six weeks ago, your prospecting wasn’t at the level that it needed to be. A lack of prospecting back then will mean fewer listing presentations, fewer listings and ultimately fewer sales.

To ensure your pipeline remains full, you need to be consistent in your prospecting every single week to make sure you don’t run into dry spells down the line.

Whatever marketing strategy you are currently pursuing, consistency is the key, while always looking to do more of what is working and less of what’s not.

Real estate agents tend to be in either boom or bust mode where they either have too much work to handle or a lack of listings. The top performers always ensure they have a steady stream of new business as they focus on prospecting every single day and put systems in place to manage their pipeline. Consistent prospecting is key.

Not building relationships

It is well known that real estate is a relationship business, however, it’s important to understand that in order to win a listing, you will need to work very hard to build a relationship with a vendor well before a listing presentation.

This ultimately comes down to your marketing process and what you are doing to increase the number of touchpoints with potential sellers.

Top agents work hard to get their name out there as much as possible and then continually follow up with both buyers and sellers. This continuous contact helps build relationships well in advance of a vendor ever wanting to list their home. So when the time comes to list, the agent that has put in all that groundwork is likely to have a good chance to win the listing.

Focus more on giving value to people and building relationships and less on trying to win new business.

Short term thinking

In some ways, the agents who need the business the least are likely to be the ones that ultimately win the listing.

While success does breed success, it’s important to have a mindset that is focused on helping vendors and doing the best you can for them.

While it might be tempting to make promises of a high sales price to a vendor, this will often not serve you as an agent or the client. It’s far more important to have a longer-term perspective and try to help the vendor solve their problem and do what’s right for them.

If you’re thinking longer term this will help you win business down the track. Imagine if you told a vendor that their property was worth a certain figure, only for it to sell at a significant discount with little interest. That vendor is highly unlikely to recommend you to their friends or family and that will mean your listings and sales will suffer in the long run.

By thinking long term and doing what’s best for the vendor, you’ll be far better off and so will your clients.

10 Habits of Highly Successful Real Estate Agents

PropTech Group CEO Joe Hanna gives an overview on The PropTech Group and describes our approach to technology and how we help real estate agents and agencies.

In real estate, your name is your brand and unless your brand presents itself as trustworthy, it’s going to be difficult to continue to grow your business.

In years gone by real estate agents have had image issues with trust, which stemmed from a small minority of agents using dubious tactics to win listings and equally questionable sales tactics.

More recently, the industry has changed a great deal, and with data on property prices readily available to both buyers and sellers, the way real estate is conducted is more transparent and fairer than ever before.

With more data and technology at the fingertips of both agents and clients, the agent themselves becomes the differentiating factor within competition. For this reason, respect and trust within agents is more important than ever. Furthermore, it is often the most important factor a vendor contemplates when deciding on an agent.

Here are some things you can do to improve your trust with clients.

1. Honesty and Integrity

Being completely honest with a vendor is one of the most important elements in building trust.

Vendors want to know how much their property is actually worth and what the current market is like for their property. While it might be great in the short term to win a listing by telling a vendor that you can achieve a record price for their property, that will likely only lead to both parties being disappointed with the end outcome.

By being honest and having integrity on all matters, you’re going to be building a reputation for yourself that will resonate within the industry. In the short term, it might cost you a listing, but in the long term, honesty will build trust and set you up for a long career.

2. Communication

Vendors need to know what’s happening throughout the entire process of selling their property. Most really do appreciate all the small details and it’s important that you keep an open line of communication with them at all times. They certainly shouldn’t have to wait more than 24 hours for you to be calling them back.

While different vendors will prefer different forms of communication, be sure to keep them in the loop. That way they feel a part of the process and you are also building your relationship along the way.

3. Do What You Say You’ll Do

Actions speak louder than words, and given the previous reputation of real estate agents, it’s imperative that promises are kept.

Nothing can hurt trust between two parties more than saying you’ll do something and not doing it. Not following through on your word can often be interpreted as a false promise or lying, and in business this can be a deal-breaker.

If you make a promise to a client, ensure you deliver. If you can’t, get on the front foot immediately and let them know why, and what you’re going to do about it.

A vendor doesn’t expect perfection, but they do expect you to be proactive and to stick to your word.

4. Act Promptly

We all know that real estate agents are busy and are often on call seven days a week. Regardless, it’s still important that you always act promptly when someone reaches out to you. Even if you can’t resolve the issue that is being brought to you at that time, acknowledge the vendor and their problem, and provide them with a timeline of when you can get back to them with more capacity for problem solving, or perhaps even come back with a solution.

Simply getting back to someone's SMS, email or phone call gives the impression that you genuinely care and are proactive. From a vendor's point of view, they want an agent who is there ready to rally as many buyers as they can for their property.

5. Listen

With so much focus on making sales and winning listings, it can be easy to forget that you are dealing with real people who have genuine problems and are often going through big life changes.

Listen to what your clients are telling you and then do your best to solve the problem for them. Just the act of listening to someone immediately builds rapport and trust because so few people genuinely listen to others in a meaningful way.

For fast-talking, busy agents it can be tempting to throw down your sales pitch, but you’re far better off learning to take a step back and working on your listening skills. By listening to your vendors instead of talking at them, you will be able to better understand their needs and then fulfil those needs.

By building and maintaining honesty and integrity with your vendors, you are much more likely to create positive experiences which will improve your reputation as an agent.

10 Habits of Highly Successful Real Estate Agents

PropTech Group COO Bill Nikolouzakis gives an overview on The PropTech Group and describes our approach to technology and how we help real estate agents and agencies.

When analysing the success of real estate agents, people usually think of the agents who sell the highest-priced homes, or earn the highest commissions over the course of the year.

While a sizeable commission is an important end goal for many agents, there is a far more dynamic range of elements to assess when judging your level of success.

An important consideration to remember is that all agents are at different stages in their journey and career. A rookie agent shouldn’t be judging their success by comparing themselves to the top earners who have been in the industry for decades. Fortunately, there are a number of things you can look at to determine if you’ve had a successful year.

How Many Calls Did You Make?

In real estate, success doesn’t happen overnight. In fact, it takes a significant amount of time to market, sell and settle on just one property. There’s a lot of time in the day, which should be filled with doing the simple things that will ultimately drive more business.

One of the most important metrics for most agents is the number of phone calls made. This metric is so important because phone calls to prospective vendors is a tried and true way of generating new business.

Each year, you should have a goal in mind for how many people you will reach out to, this can be broken down into a monthly or even weekly basis to be more manageable. Your success should be linked simply to how many of those calls you actually made. From there, you will able to establish conversion rate to learn how effective your phone calls are.

If you’ve exceeded your goals, you will likely have a solid pipeline of work ahead to set yourself up for success.

When starting out as a new agent, it’s important to prospect every single day and continue to drive that pipeline. You aren’t expected to be the top performed agent in your first year. But it is possible to make the most calls and that should be your goal for next year.

Did you Grow Your Network?

An integral part of real estate is networking. Every week, you should be going out and actively looking to expand your network to help drive more business.

This can be as simple as sitting down for a coffee with potential referral partners or even going to property-related events with the goal of building up new relationships.

Once those relationships have been established, you also have to continue to develop and nurture them. You can do this by looking to assist your network in any way you can. After all, creating a relationship only to let it dissolve by ignoring is counterproductive and a waste of time, energy and resources.

It takes time to grow a business network, and it is never too late to start. Set the goal of building your network by a few people each week and by the end of the year, you might have created over 100 new quality business contacts.

In many ways, the network you have in place is far more valuable than your other resources as it has the potential to sustain and grow your business for many years to come. It could be the most important indicator of success in the future.

Reviews/Customer Satisfaction

A recent survey from REALTOR Magazine found that around 30% of sales volume comes from past client referrals, and 30% are from repeat business with past clients.

If you are looking after the needs of the vendors well, it is going to see your business continue to grow. This is also very true of buyers and potential buyers as well. As an agent, ensuring you make a good impression and genuinely help and solve problems for people is vital, as it solidifies your relationships with vendors. Oftentimes, a personal touch or going the extra mile can be the difference between making and breaking a deal.

If you’ve only sold a few properties over the course of a year, but you’ve achieved outstanding results for your clients, that’s more important than going through the motions on a larger volume of transactions.

Link your success to the level of customer satisfaction. You can obtain this from client surveys that you should be regularly conducting and also from ratings and reviews.

Marketing Efforts

Building momentum as an agent takes time, but it all starts with small steps. Over the past 12 months, have you kept up with all you personal marketing efforts that you set out to achieve?

Did you grow that social media presence like you had hoped? Have you been sending regular email newsletters? Have you been doing regular letter drops? Have you been attending property-related events and networking effectively with potential buyers?

Whatever form of marketing you choose to do, it’s important that you have stuck to your plan. If you are unsure how to market yourself, read through our guide on How to Market Yourself as a Real Estate Agent.

Success in real estate is about turning up every single day and doing the small things. You will ultimately be successful if you break down those goals and focus on smaller daily activities. Then in time, if you do those daily activities, the transactions and commissions will come.

New call-to-action

Technology, Tech Stacks, and Real Estate - The Basics

Technology has always been a strong partner to agents and professionals in real estate, but the industry as a whole tends to be slow to the punch when it comes to adopting change. And that’s not just talking about a hesitance to implement untested solutions, but also a trend of holding onto aging platforms. As soon as software stops being a support to your business and becomes a headache to be wrangled you should start seriously thinking about doing a tech stack audit, but what does that mean?

When we say ‘tech stack audit’ we’re talking about an evaluation of the software solutions, tools, apps, and platforms utilised by an agency or franchise group to carry out their business operations. That includes day-to-day support and customer relationship management software, tools to monitor performance metrics, internal and client communications, and marketing functions.

PropTech Group’s CRO Bill Nikolouzakis advises that technology is the means to the end, and not the end itself.

"Agents should look to building a tech stack that is bespoke to their business and reduces the amount of time spent on mundane tasks, freeing them up to do what’s really important: helping clients."

Good tech should be the foundation of a modern agency. The right solutions will free up time across the board, from agents and administrative staff all the way up to owners and principles. Take customer relationship management (CRM) software as an example: if a businesses CRM is a bad fit because it lacks key functionality, or isn’t appropriate to the size and needs of the business, doesn’t allow for easy access to data or interpretation of performance metrics for reporting then it stops being support and becomes a hurdle to overcome.

Comfort with technology will naturally vary across a business so a single user struggle may not be the make or break in deciding if a piece of tech is good or bad, but if frustration is widespread then it’s past time to take a good look at what you’re getting for your money.

Bill Nikolouzakis believes that you should select the technology that is most suited to the requirements of the people in your business.

"If you have a small team that all perform multiple tasks, then starting with a CRM system like Eagle Software would be an example of a good fit. If you’re a larger business that already has extensive processes and systems in place, then a more customisable solution like VaultRE could be the better option to support you."

If the general sentiment is that the software creates more issues than it solves, that’s a good sign that you need to evaluate what you’re really getting out of it. Software needs to earn it’s place in your tech stack; otherwise you end up with a bloated mess that wastes time, money, and the energy of your people. There isn’t a one-size-fits-all answer when it comes to technology in real estate, even within a franchise group individual agencies will have specific needs - and as an industry there are unique goals, purposes and challenges that IT infrastructure must address.

Defining what your challenges are, and what kind of software you need to address them, is a good first step to dip your toes in the water of performing a tech stack. Are they being met efficiently, are you having to use a patchwork of so-so software to cover all your bases, do your people like the software you’re using?

That last point is more important than you might think; users who don’t like the software won’t be motivated to put in the effort to learn the ins and outs of it, or may use it improperly for the sake of speeding up the process and spending as little time working with it as possible.

Why Now?

Doing a proper tech stack audit is a big investment, and it can be a daunting task.

It takes time and resources, and given the heat and speed of the current Australian property market it’s understandable to be unmotivated to shift your focus inward and put in the hard yards. But that’s also why now is the right, and crucial, time to do it. The industry is booming and there’s no sign of it slowing down soon, and putting the time in now will pay you back with interest in the future. Reviewing your tech will save time across the board for agents, property managers, administrators, all the way up to principles and owners. It’ll save you money by consolidating your software and sorting the wheat from the chaff, and help you maintain a single source of truth for all of your operational data so you can make confident, informed decisions.

As a business changes it’s software should too. Solutions that used to be cornerstones will be outgrown, and functional overlap from adding in tech piecemeal rather than planning out a stack all work together in creating an ecosystem that can drain resources rather than streamline operations.

PropTech Group has a strong ethos of integration and user-friendliness, as Bill Nikolouzakis says:

"Building a deeply integrated solution, one where an agent can run their entire real estate practice from one place, is absolutely essential. If you have multiple software solutions with multiple data entry points and logins agents just won’t use them."

How Do I Get Started?

So you want to audit your technology, but where to begin? It’s an intimidating process to start, particularly for older businesses that have had more time to accumulate software and may be wary of bringing in unfamiliar tech. The best place to start is by creating a comprehensive list of every piece of software that your business uses, or is subscribed to.

And that’s not hyperbole, committing to the audit means going into exhaustive detail on every front of your infrastructure. Talk to your team in every department; what do the agents use, what do the property managers use, what do your administrators use - what do they enjoy using, what do they dislike? There’s going to be overlap, but you don’t want anything to slip through the cracks.

Make sure that you look through your invoices with a fine-toothed comb and capture all of the subscription-based software so nothing gets overlooked, and tally up the expenses. That number will come in handy later when you’re making choices about implementing new software: having access to it and a firm understanding of where the money goes and why you’re spending it (whether the cost is outweighed by the time it saves, or if it generates enough new leads to have a good return on investment, if the user experience or support experience is positive enough that your people are raving about it) will help inform what you replace, what you keep, and what you discard.

Once you’ve created your list and have a surface-level understanding of what your team likes and dislikes it’s on to evaluating each piece of software. This is going to take time, and it will be well worth the effort. Asking yourself, and your team, the following questions for each piece of software or technology tool you use will give you a good idea of what you need and what you don’t right off the bat.

So now you’ve got an exhaustive list of all of your software, what it costs, the office sentiment towards them, and visibility onto the areas of strength and weakness in your tech stack. Where do you go with this information? Property technology is a deep pool to dive into without guidance, but all of that effort has put you in a good position to bring in an expert to take you through the next phase with confidence.

Bill Nikolouzakis believes strongly in the importance of solutions that empower each individual client according to their needs, saying:

"At PropTech Group we’ve thought this through deeply, and decided to structure our business by having a team of advisors whose only goal is to help our clients decide on the tech solution that’s best for them. Whether it’s one, two, or all of products depending on their requirements, their goals, and the solutions they already have in place."

Making Informed Choices

Identifying the obvious points of improvement is a task you can do on your own, and getting that holistic view of your tech stack will help you in making informed decisions and advocating for what you want and what you need. But completing the audit and shaking up the stack will be a lot easier if you have some expert advice on hand.

It can be easy to lose the forest the forest for the trees, so bringing in a third party with experience in IT and real estate solutions will be worthwhile to help you finalise what programs are necessary, what better options exists, and if you have multiple pieces of software that can be consolidated by switching to a different solution.

Given the current explosion of innovation in the property technology sector agencies are spoiled for choice when it comes to options to add in to their business, so dedicating some time to doing a sweep of demonstrations and consultations with prospective software representatives will give you a better handle on what offerings are part of the new standard, what software is the best fit in providing you with value aligned to the needs and challenges you’ve identified throughout this process, and what price points are to be expected.

So you’re doing some demonstrations or consultations, how can you make the most of the conversation? Here’s some good starting topics to discuss with a consistent or representative of a software solution that you’re thinking of implementing:

You should also be referring back to the lists you’ve made of all your software, the price, the value, and the use. Knowing what you need, what you want, what you’re willing to compromise on, and what you’re willing to pay more for proportionally is going to guide the final phase of your audit: implementation.

As times and needs change your tech stack should be agile enough to evolve with you, and a big part of that is going to be finding solutions that aren’t stagnant. Jumping between solutions frequently will lead to burnout and a lack of motivation for you and your team to put in the time to become experts in the software, so the level of support and development practices of a prospective tech provider should be taken into consideration when moving into testing and implementation.

Do they push out updates quickly, do they have accessible support? Do they have a stable client base? Do they have integrations with other platforms and software so you can minimise the number of portals your team needs to access? All important, and all best discussed with experts.

Looking to the future

Auditing your tech stack isn’t something that can be blitzed through overnight, and you shouldn’t try to. It’s an investment, and it might be a slow burn. But once you’ve done the hard work on the first run through it’ll make subsequent tech health-checks a natural part of your operations. And you should keep a finger on the pulse of your tech stack. The knowledge that a deep-dive gives you will provide a transparent view on the role that technology plays in the day-to-day and long term processes in your business, so in the future your audits won’t be an involved process but reactive and agile.

Identify, evaluate, bring in outside expertise. A final word from Bill Nikolouzakis:

"the best way to go about the final phase of choosing solutions and moving on to implementation is getting that expertise and advice on what’s current best practice in the industry. Agents often don’t know about all of the solutions in the market or their associated costs, and building the best and most affordable tech stack can be a massive competitive advantage."

When you partner with PropTech Group, you’ll have our industry-leading products on your side to help your business grow.  Register for a chat or demonstration here, we would love to help!

Real estate is an industry in perpetual motion, with agents at the wheel and technology the heavy machine. It’s a space that’s been traditionally slow to the mark for adoption of new solutions without outside pressures; pressures like a pandemic, for example. There was no choice for agents or customers in assimilating into the new technology dependent normal. Stay at home orders, restrictions of movement, limitations on how people can be in a space. COVID has irrevocably changed not only the way that people buy, sell and rent homes, but the way that they want to engage in property. Online inspections, electronic document signing, automatic instant communication and digital portals: these have become must-haves rather than optional selling points.

Impact of COVID-19

Property technology and the demand for the industry to modernise has accelerated beyond all expectations in the past 2 years, and while the momentum may slow as we come out of lockdown it won’t disappear. Particularly not while millennials are poised to take over from the baby boomers as the lion's share of buyers and sellers, and they will come with the expectation of engaging with real estate the same way they engage with all other industries - digitally.

“If one good thing came out of lockdowns in Australia for real estate it’s the embracing of technology. Consumers have stepped up to assist agents to transact and carry out everything from remote routine inspections for rentals to online contracts and virtual tours, and agents have changed the way they work as well to meet the new needs of their clients. As Australia moves through this new transitional stage coming out of lockdown, the best of these measures will remain to continue to support agents with more tools, levels of service, and automations.”

Bill Nikolouzakis, CRO & COO of PropTech Group

Emergence of New Technologies

Real estate has always moved at a breakneck pace. Even at the height of lockdown there wasn’t a missed step, instead demand and prices for property soared beyond all expectations. Agents and agencies were hammered from all sides as the mass exodus from city centers left landlords scrambling for tenants and vendors fielding sight-unseen offers far above asking in the scrum to secure a home.

Technology rose to be the crutch that at first propped up the industry as we all acclimated, and then found it’s stride as providers continued to innovate and expand their offerings to meet the new needs of property professionals at every level. Tech stacks were a reality for real estate before the pandemic, became a point of hyperfocus during the pandemic, and will continue to grow and evolve as we come out of it. It’s not unusual for a tech stack in a mature company or agency to gravitate towards a patchwork of software that’s been acquired over time as new needs have surfaced; it’ll do the job, but it’s not efficient in the long term. Technology should be not only tailored to what you need in the moment, but chosen carefully to ensure that your selection is efficient and cohesive.

As we come out of COVID, many agents and agencies will be facing a tech stack peppered with stop-gap solutions that were implemented to meet the challenges of the pandemic, but may not be the right fit going forward. How can you tell what needs to stay, and what can go? Looking at trends and the desires of consumers and agents can guide you through the process. Remote inspections, AI and automation, digital signing. These are tools of convenience for the consumer and the agent, and aren’t going to be cast aside even when we get back to business as usual - or as usual as it can be after a worldwide pandemic. The digital generation in particular grew up in a world of accessibility, and they will demand it from every industry that they interact with including our own.

“Technology in today’s real estate landscape is a vital aspect of agent and agency success. Through it agents can streamline and automate manual tasks, allowing them to spend more time on the most important part of their job - the customers. Good software connects all of the information they need at the touch of a button whether they’re in the office, at home, or on the road.”

Mark Levin, Group Head of Sales at PropTech Group

Increased Buyer Confidence Despite Global Uncertainty

US based property company Zillow released statistics showing that listings utilising virtual inspections tripled between 2019 - 2020, and 72% of Zillow agents responded that they would continue to offer virtual inspections after the pandemic. Zillow house listings that had a 3D tour available in May of 2020 were also saved 32% more often than listings that didn’t have one; even though this data does concern an American company, the statistics are worth exploring.

That same company also conducted surveys on buyer confidence when buying homes sight unseen, with 23% of respondents being comfortable with entirely virtual purchases, and 42% of respondents being comfortable making an initial offer after a virtual inspection. There’s a divide along those responses along generational lines, with the digital natives having higher confidence when using property technology to buy their homes.

The exception is in using technology in the buying process for virtual inspections and digital floor plans; even the baby boomers and silent generation report confidence and a desire to utilise those features. Again, we are looking at American statistics but given the global nature of the COVID pandemic there is transference here - Australian real estate is no stranger to the effects of lockdowns and digitisation, or the shift in age as baby boomers move to retirement and a younger audience comes to the fore of property.

Automation as an Asset

In an industry that thrives on human interaction the thought of AI and automation may be a troubling one - but AI in real estate cannot and will not replace the agent. What it can do is automate menial tasks and administrative busywork, and it’s on the rise. Good CRMs and support software are leaning more and more on automation and workflow triggers; why manually enter data, maintain databases, and create individual communications when you can have a workflow that does it for you?

Through automation, agents can strip back the level of personal responsibility and effort that goes into the early stages that go into buying and selling property. You can send out automated messages to inform vendors and leads about offers, changes in price, sales, relevant new listings, sending and receiving contracts and collecting digital signatures.

During the eye of the storm in COVID this was vital to keeping on top of the deluge of enquiries and offers on listings. Without automated responses agents would have had to triage, determining what interested parties were interested enough to warrant attention. Workflows and intricate trigger sets can create communications that are indistinguishable from having another person on the other end of the line, cultivating that human connection between prospects and agents.

Long Term Implementation

There is a big asterisk that comes with AI and automation: automation is a complex proposition, and it requires a level of trust from the agent in the software. Technology that adds automation as a gimmick or an afterthought will hurt more than it helps, and once trust in the software has been broken it isn’t easily won back. Performing a tech audit is the best way to protect your business, evaluating and assessing your existing software as well as any potential additions.

Working in tandem with your automation should be your marketing and digital branding. Having a cohesive, attractive online presence in a world that runs remotely was a key aspect of real estate during the pandemic for obvious reasons. Without access to walk-in clients or paper drops there was no choice but to go entirely digital for agencies, and those agents and agencies that embraced it were the ones who found the most success. Agent and agency websites, online brochures and listings, market update mail outs and branded communications - all of these were valuable tools during lockdown, and should continue to be a point of focus going forward.

Future of Real Estate

Everyday life has become a liminal space for our industry, the in-between of lockdown and a post-COVID future. As we wait for the end of 2021 and the beginning of 2022 there’s time for you to turn your focus inward, to look at what technology served you well and what technology will become a burden. Performing a tech audit and facing the possibility of ripping your support software root and stem, or even just moving laterally to a new system, can be a massive sink of money and time that can’t be afforded in the usual hustle and bustle. But in these unusual times we’re presented with unusual opportunities. Without being in an office, without needing to commute back and forth between inspections, there’s plenty of breathing room to not only investigate your current solutions but to learn new software. Kate Fairmaid, Director at Origin Projects puts it elegantly:

“As real estate salespeople, it’s rare that we have additional time on our hands. We’re always chasing a deal or our next listing. As difficult as lockdown can be, it’s provided us with valuable time to sit down and focus on our business. I would encourage anyone in lockdown to take this time and use it wisely, because once lockdown is lifted you may never have another opportunity like it.”

How to Turn Your Website Into a Lead Generation Machine
PropTech Group
© Copyright 2022 PropTech Group. All rights reserved.