After seeing home prices across the country fall 9.1%, there are now signs that the housing downturn could be over.
According to CoreLogic, home prices rose 0.5% in April, posting the second consecutive monthly increase, following a 0.6% rise in March.
Sydney is leasing the rebound in property prices, increasing 1.3% in April with dwelling values rising each month since February. Sydney values are now 3.0% higher than the recent trough recorded in January.
Brisbane prices increased 0.3%, Melbourne 0.1%, Adelaide 0.2% and Perth 0.6%. While Darwin was the only capital city market to record a decline, falling -1.2% throughout the month.
Source: CoreLogic
CoreLogic’s Research Director, Tim Lawless said it is becoming increasingly clear the housing market has moved through an inflection point.
“Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift,” Mr Lawless said.
“Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average.”
Mr Lawless said rising immigration has been behind the rebound in demand.
“A significant lift in net overseas migration has run headlong into a lack of housing supply,” he said.
“While overseas migration would normally have a more direct correlation with rental demand, with vacancy rates holding around 1% in most cities, it’s reasonable to assume more people are fast tracking a purchasing decision simply because they can’t find rental accommodation.
“Many prospective vendors have stayed on the sidelines through the downturn, keeping inventory at below average levels and providing sellers with some leverage at the negotiation table.”
He said although housing conditions are looking more positive, values across most regions remain well below their recent cyclical highs.
Hobart, where values are yet to improve, is now recording the largest drop from the recent market peak, down -13%. Sydney dwelling values had recorded a -13.8% drop from the market peak to recent trough, however a 3% rise in values over the past three months leaves the market -11.2% below the recent high. Brisbane has recorded the third largest decline, with values holding -10.7% below their recent peak.
One of the main factors propping up the housing market has been the tight level of stock.
Mr Lawless said with the flow of new listings holding lower than normal, total advertised inventory was tracking -21.8% below the previous five-year average for this time of the year.
Advertised supply was well below average across every capital city over the past month, apart from Hobart where listing numbers have been rising, albeit from a low base.
“The flow of new listings is highly seasonal, typically trending lower through winter before rising into spring and early summer,” Mr Lawless said.
“At the moment it looks like this seasonal trend is holding true, with the flow of new listings once again falling into winter. This will be an important trend to watch.
“As market conditions improve we could see prospective vendors becoming more willing to test the market and beat the spring rush when competition among vendors is likely to be more apparent.”
CoreLogic’s rental index recorded a further 1.1% rise across the combined capital cities in April, while regional rents were up a smaller 0.5%.
According to Mr Lawless, there are several factors contributing to the higher growth rates across the unit sector which has been surgeon compared to houses.
“It’s likely rental affordability is playing a role; in early 2022 unit rents were around $70 a week cheaper than house rents, however, with unit rents rising much faster than house rents, that gap has narrowed to just $20 a week in April,” he said.
“There is also the additional rental demand from overseas migration, especially students, which tends to be more pronounced in inner city areas as well as precincts close to universities and transport hubs that are typically associated with higher density styles of rental accommodation.
“Another factor playing out is a lack of new unit supply. Medium to high density dwelling approvals have mostly held below average since 2018, setting the scene for a chronic undersupply across the medium to high density sector a few years from now.”
Mr Lawless said it looks like the Australian housing market has moved through what has been a relatively short but sharp downturn.
“Typically, we wouldn’t see housing values start a new growth cycle until monetary policy started to ease, credit policies loosened or some level of fiscal support was introduced. The shift towards more positive conditions has come about in the absence of these factors,” Mr Lawless said.
“The key drivers of this positive inflection seem to be the larger than expected rise in net overseas migration which has created additional housing demand at a time of extremely tight rental conditions and well below average levels of advertised supply.”
He said while the bottom of the downturn looks quite convincing, we aren’t expecting housing values to rise materially until interest rates reduce, credit policies ease or housing focused stimulus is introduced, or potentially a combination of these factors.
“This scenario, where interest rates fell and credit policy eased, was exactly what occurred in June/July of 2019 following the Federal election; a drop in interest rates that was shortly followed by an easing in APRA’s serviceability assessment rules,” he said.
“This saw housing values trend higher before being interrupted by the onset of the global pandemic.”
The turnaround in home prices has continued with the latest data from CoreLogic showing a 0.6% uptick over the month of March.
Once again, the larger capital cities have led the turnaround, with Sydney recording a 1.4% jump in values. Melbourne was also higher, increasing 0.6% while Perth (0.5%) and Brisbane (0.1%) were the only other capital city markets to record a rise.
The smaller cities all struggled last month with Hobart recording a 0.9% decline in prices, while Canberra dropped 0.5% and Darwin 0.4%.
CoreLogic’s Research Director, Tim Lawless, said the rise was due to a combination of low advertised stock levels, extremely tight rental conditions and unprecedented demand from overseas migrants.
“Although interest rates are high and there is an expectation the economy will slow through the year, it’s clear other factors are now placing upwards pressure on home prices,” Mr Lawless said.
“Advertised supply has been below average since September last year, with capital city listing numbers ending March almost -20% below the previous five-year average. Purchasing activity has also fallen but not as much as available supply; capital city sales activity was estimated to be roughly -7% below the previous five-year average through the March quarter.”
Source: CoreLogic
Mr Lawless said the rental crisis was now also starting to push would-be renters to buy which was putting upward pressure on prices.
“With rental markets this tight, it’s likely we are seeing some spillover from renting into purchasing, although, with mortgage rates so high, not everyone who wants to buy will be able to qualify for a loan. Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”
Mr Lawless said the lift in housing values has been most evident across the upper quartile of Sydney’s housing market, which were up 2% in March and the upper quartile of the Sydney unit market was 1.4% higher over the month.
“Sydney upper quartile house values fell by -17.4% from their peak in January 2022 to a recent low in January 2023, the largest drop from the market peak of any capital city market segment,” he said.
“We may be seeing some opportunistic buyers coming back into the market where prices have fallen the most.”
According to the data, regional housing markets have mostly shown firmer housing conditions as well, with the combined regionals index rising 0.2% over the month.
Housing values across Regional WA and Regional SA remain at cyclical highs despite 10 rate hikes. SA’s Fleurieu-Kangaroo Island SA3 sub-region led capital gains over the month with a 2.6% rise in dwelling values followed by Dubbo, NSW (2.5%), Wellington, Victoria (2.4%) and Mid West, WA (2.1%).
Housing values across every capital city and broad rest-of-state region remain higher compared to March 2020. Melbourne values are the closest to pre-COVID levels, with only a 0.6% buffer (up from a 0.03% buffer a month ago). At the other extreme is Adelaide where housing values remain a stunning 41.2% above the levels recorded at the onset of COVID, and Regional SA where values remain at a record high, 49.2% above March 2020 levels.
The flow of new listings has held at below-average levels since September last year, while the five largest capitals are also recording a total listing count lower than this time last year.
New listings are likely to trend lower in the cooler months, Mr Lawless said, which is normal for this time of the year, before ramping up into spring.
“Given that new listing counts have trended below average since spring last year, it’s reasonable to assume there is some pent-up supply that has accumulated behind the scenes. Whether the flow of new listings starts to pick up with improved housing confidence will be a trend to watch,” Mr Lawless said.
Meanwhile, rents across all areas of the country continue to move higher. Capital city house rents are up 24.8% since the onset of the pandemic in March 2020, while unit rents are up a smaller 19.5%, although they are quickly catching up.
“As rental affordability becomes more pressing we are likely to see group households reforming, reversing the trend towards smaller households seen through the pandemic,” Mr Lawless said.
“Additionally, tenants are likely to be maximising their tenancy, sacrificing the spare room or home office to spread rental costs across a larger number of tenants.
“CoreLogic data has also shown a continued lift in rental hold periods, suggesting tenants may have a preference for holding onto their existing lease, rather than braving the search for a new rental.”
Notably, rents fell for Darwin houses (-1.5%) and units (-0.4%) as well as ACT houses (-1.3%) over the past three months. After historically being one of the most expensive rental markets in the country, the quarterly decline now has Canberra recording an annual reduction in house rents, down -0.8% over the past 12 months.
Mr Lawless said, although the recent trend in housing markets is looking increasingly positive, he is still cautious about calling a trough in the cycle.
He said there are still a number of headwinds for property owners to contend with including the full impact of higher interest rates is yet to flow through to borrowers as well as the looming fixed interest rate cliff that will see hundreds of thousands of fixed rate loans roll off to much higher variable rates. Also, credit conditions remain tight while sentiment is still weak at the moment.
However, with inflation winding down and the unprecedented level of immigration that is taking place, there is reason to think that prices might stabilise going forward.
Property prices bounced back in February, however, there could be more downside ahead according to experts.
The latest data from CoreLogic showed property prices experienced the smallest monthly fall since May 2022, with national property prices down only 0.14% in February.
Sydney lead the rebound with a 0.3% increase in median price, however, all other capital cities recorded falling values, with Hobart suffering the most significant drop, tumbling 1.4%. Melbourne and Brisbane both declined 0.4%, Canberra was down 0.5%, Darwin 0.4%, Adelaide 0.2% and Perth 0.1%.
CoreLogic’s research director, Tim Lawless, said the stabilisation in housing values over the month was helped by consistently low advertised supply levels and a rise in auction clearance rates.
"The February housing market performance suggested some renewed strength in market conditions, while the flow of new listings has been at below-average levels since September last year, which has helped to support a reduction in the pace of value falls," Mr Lawless said.
"But, it’s probably too early to call a trough in the cycle considering there are several factors which could trigger a ‘re-acceleration’ of housing value declines over the course of the year."
Mr Lawless said the past four weeks saw the flow of new capital city listings track 17.0% lower than a year ago and 11.9% below the previous five-year average, which has been a trend that has been occurring since September last year.
Auction clearance rates also bounced back last month, reaching the high 60% range through the second half of the month, while Sydney clearance rates rose to above 70% for the first time since February 2022.
The upper end of the market in the capital cities drove this month’s stabilising trend, increasing by 0.1% in February. While still falling, declines across the lower end of the market also stabilised, down 0.1%.
Over the month, there was a seasonal rise in weekly listing volumes, with roughly 11,250 more new listings advertised compared to January, bringing the number of new listings to 38,118.
Despite the jump, this is still 12.6% below the previous five-year average for this time of year, and the total volume of listings counted nationally was approximately 143,500, which is 26.3% lower than the previous five-year average.
Against relatively low advertised stock levels, the estimated volume of sales recorded a strong seasonal bounce back in February.
Mr Lawless said while the monthly volume of sales is subject to revision, this lift in sales backs up the theory that purchasing demand may have been stronger than supply throughout the month.
Source: CoreLogic
According to Mr Lawless the highest rental growth is now occurring in the unit sector across the three largest capitals, with Sydney unit rents jumping 16.7% over the past year.
According to Mr Lawless, rising immigration has been a major reason behind the rise in rents and plunging rental vacancy rates.
"Several factors may be contributing to the surge in unit rents, including rental affordability pressures, a transition of demand towards higher density rental options, and a strong rebound in foreign student and international migrant arrivals, particularly in inner city precincts and areas within close proximity to universities and transport hubs,” he said.
Mr Lawless warned that despite the recent trend towards stabilisation, housing risks remain skewed to the downside.
He said that it is too early to call a trough in the cycle as several factors could trigger a ‘re-acceleration’ of housing value declines over the course of the year, including the expected rate hikes, a further decline in borrowing capacity, and challenges to serviceability due to an ongoing increase in interest rates, rising unemployment, and a higher cost of living.
"On the back of the latest increase in the cash rate, there are still more rate hikes expected over the course of the year, and a further decline in borrowing capacity is on the cards, which could reaccelerate housing market declines," he said.
"Low advertised stock levels are likely to persist as homeowners resist selling in a declining market.
“However, there may be a small portion of prospective vendors who become more motivated or are forced to sell amid growing challenges to serviceability."
Mr Lawless said longer term, the market is poised for recovery and despite the headwinds accumulating for the housing market in 2023, there is no denying the fundamental under-supply of housing stock.
If you are going to reach the elite level in real estate, you're going to need systems in place that will allow you to leverage every part of your job. If there are any weak links in the chain, it's very likely that you are not going to be performing as well as you could be.
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An outdated CRM is a common way that many real estate agents could be getting held back, without realising it. Here are just a few of the ways that your current CRM might be slowing you down.
If your current CRM isn't intuitive, or lacks automation features, you're likely spending more time than you need to on simple administrative tasks. For example, if you are manually inputting client data or sorting through leads, you're wasting valuable time that could be spent building relationships, prospecting, and ultimately securing new listings. Your CRM should be doing the heavy lifting for you when it comes to tedious, bulky tasks. A CRM isn't designed to replace agents, but to give them more time in their day to focus on human tasks and building connections in the field.
A quality CRM should serve you, not frustrate you. Outdated CRMs can be clunky, and take more time to load or save data than it might to do things manually. This is a huge red flag when it comes to your CRM. If you are constantly frustrated at your tech because it's not working properly, and you're spending more time on the phone to support teams than you are actually working, then it's time to consider a new CRM.
If your CRM isn't automating tasks like follow-up emails or lead scoring, you're missing out on valuable opportunities. Automating these tasks not only saves you time but also ensures that you're being proactive in your approach.
You can configure your CRM to follow up with leads, or to trigger a series of automated emails that will help you to nurture leads over time. Using automation helps to create a proactive approach, and can make all the difference in the world when it comes to closing deals and will allow you to reach more people than ever before.
If you're using an older CRM, it may not be able to keep up with your growing business needs. As you add more clients and leads to your database, your CRM needs to be able to handle that growth. An outdated or low quality CRM may not have the capacity to handle larger volumes of data, or it may not be able to integrate with the newer tools and technologies that can help you grow your business. This could limit your ability to take on new clients or expand your business.
Take note of how often your CRM is issuing updates and bug fixes. Perhaps your CRM was best-in-business five years ago, but has not made any changes since that time. The tech industry changes quickly, as do the needs of real estate agents. In order for you to grow, it's important that your CRM provider also sees growth and innovation as a priority.
There are a number of important factors to consider when it comes to picking the right CRM, including functionality, customisability, and the ability to integrate with the rest of your technology stack. One factor that real estate agents often neglect is the customer support. If you're having issues with your CRM, you need to know that you can easily get the help that you need, when you need it. Having access to helpful staff in a timely manner is invaluable when it comes to the technology that runs the back end of your business. Look for a CRM provider that offers comprehensive customer support, including phone and email support, and bonus points for online tutorials, and a user community that can help answer your questions.
Finding the right CRM for your needs will not only help your business flourish, but can also help you cut costs by removing cluttered technology that no longer serves you.
When you’re trying to find the right CRM for your business, start by evaluating your current needs. What are the problems you're having with your current CRM? What features would you like to see in a new CRM?
Once you have a clear idea of what you're looking for, start researching your options. There are a lot of CRM providers out there, so it's important to do your due diligence. Look for providers that offer free trials or demos so you can test out the product before committing.
It's also important to remember that your needs will change over time. What worked for you a few years ago may not work for you now. It's a good idea to reevaluate your CRM needs every few years to make sure you're still using the best product for your business. Don't be afraid to switch providers if you find that your current CRM isn't meeting your needs anymore.
An outdated CRM can hold you back in a number of ways and ultimately hurt your bottom line. By finding a CRM that suits you and your needs, you can free up your time and focus on what really matters – building relationships and generating listings.
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.
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.”
The auction process is a fantastic way to sell property as it is both incredibly transparent and also allows for strong results from vendors.
As a real estate agent, it's important to understand how to get the most out of an auction campaign, and what some of the best tactics are.
In some ways, the main job of the real estate agent is to bring in as many potential bidders as you possibly can. For your vendor to get the very best result, you should be looking to have at least two active bidders so they can potentially drive the price higher. To do this, an agent must cast their net far and wise to attract as many people to the property as possible, in the hopes they'll be prepared to bid on auction day.
Whenever you are preparing to launch a new campaign, the first thing you should be looking to do is to bring in as many potential buyers as possible. Find people who have been to open homes who are looking for similar types of properties.
Use your CRM to automate emails and text messages, firstly to reach out to them to show them the property. Then continue to follow up with all the various people to keep them informed throughout the process, and don't forget to remind them about open homes and of course the say of the auction itself.
You can also utilise social media to create targeted ads. Products like PropTech Group's Social Eazie make this possible, and easy to set up, you can easily target potential buyers in your local area within minimal work.
Well before you start the auction campaign, you should have a clear plan put in place that culminates with having the auction on the right day and at the right time as well as in the correct location.
While most auctions will occur at the property, it's important to work backwards to determine the right day, and even the best time of day. You can often consult with the auctioneer on this part of the process, as they will understand the market and also how the different time slots will suit your particular property.
As an agent, you should be an expert in the location where you're selling the property as part of your personal brand. You should understand the buyers and the sellers, and what they're both wanting at that point in time.
You should also understand what the current market is like and which side is more in control of the market. The more expertise you can bring, the better you can work for your vendor while also assisting buyers to make them as comfortable as possible. Expertise is also one of the key factors in building trust with clients.
Remember that most people are first-time bidders at auction and this can be a very daunting process. Many may have never seen an auction take place, so be sure to help your buyers and give them the information the might need to move through the auction process.
It's important that you work with an experienced auctioneer who has a track record of getting strong results in your area. Auctioneers are masters at understanding the crows and how the auction is playing out.
They know how to adjust the bid increments and when, and they should also have the seller's best interest at heart. They can also be a valuable partner in planning out the action campaign.
When auction day arrives, it's important that as an agent, you're bringing positivity and energy. An auction can take a life of its own and the day itself is usually filled with excitement and anticipation.
As the selling agent, this is exactly what you want. You want buyers to be excited and eager to place bids. The more hype you can generate around the property on the day, the better the result.
Property prices across the country fell another 1.2% last month, marking six months of consecutive declines for homeowners.
This month it was Brisbane that experienced the largest decline, with values down 2%, followed by Sydney at 1.3% and Hobart with a 1.1% fall. Melbourne and Darwin both saw a fall of 0.8% while values in Canberra dropped 1%. Falls were less severe in Adelaide and Perth with just a 0.3% and 0.9% drop respectively.
CoreLogic's Research Director, Tim Lawless said it is probably still too early to claim the worst of the decline phase is over.
"Despite the easing in the pace of decline, with Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched," Mr Lawless.
"To date, the housing downturn has remained orderly, at least in the context of the significant upswing in values."
"This is supported by a below-average flow of new listings that is keeping overall inventory levels contained.
There's also tight labour market conditions, an accrual of borrower savings and a larger than normal cohort of fixed interest rate borrowers, who have so far been insulated from the rapid rise in interest rates."
Following a 25.5% rise through the recent upswing, housing values have fallen -6.5% across the major capital cities. Sydney home values are down -10.2% since peaking in January (after a 27.7% rise) and Melbourne values down -6.4% since February (after rising 17.3%).
House values have continued to fall at a faster rate than unit values across most regions with capital city house values down -1.2% in October compared with a -0.7% decline in unit values.
Mr Lawless said the smaller decline in values across the unit sector can be attributed to the more affordable price points across the medium to high density sector.
"The gap between median house and unit values increased to record levels through the COVID upswing," he said.
"With borrowing capacity being hit hard as interest rates rise, it's likely more housing demand has been diverted towards more affordable sectors of the market."
Source: CoreLogic
On the demand side, the estimated number of home sales has held reasonably firm through the first two months of spring. Capital city home sales were -16.6% lower than a year ago and 3.8% above the previous five-year average for this time of the year.
"The number of home sales is well down from the highs of late last year, however the fact that sales activity is still above the five-year average over the past three months reflects a base level of demand for housing," Mr Lawless said.
"Housing finance data shows subsequent buyers, such as upgraders, down sizers or movers, have been the most resilient sector of the market since interest rates started to rise.
"As interest rates rise further, it's likely sales activity will also trend lower as borrowing capacity is reduced."
The flow of new listings started to trend higher in October, but the traditional spring selling season remains well below levels at the same time last year and relative to the previous five-year average. Over the four weeks ending October 30th, the number of newly listed capital city dwellings was tracking -25.2% below a year ago and almost -19% below the previous five-year average. The trend in total advertised listings is holding relatively firm, tracking -5.0% below levels a year ago and -18.2% below the previous five-year average.
Meanwhile, rental growth continues to slow down, with national rents rising another 0.6% in October, led by 1.1% rise in unit rents while house rents increased by 0.5%.
Mr Lawless said a gradual slowdown in rental growth in the face of low vacancy rates could be an early sign that renters are reaching an affordability ceiling.
"Since the onset of COVID, capital city rents have risen 17.7% and regional rents are up 25.5%" he said.
"Although rents are likely to continue to rise, 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."
Mr Lawless said housing values are likely to continue trending lower until interest rates find a ceiling.
"The bad news for homeowners is most economists have recently revised their cash rate forecasts upwards due to higher than expected inflation outcomes," he said.
"Although housing risks remain skewed to the downside, there are a few tailwinds that should help to keep this downturn orderly and stave off a material rise in distressed listings.
Factors include tight inventory, strong employment and overseas migration, should limit any extreme falls in house prices.
As the property market begins to slow, building relationships and keeping your ‘finger on the pulse’ of market trends will be key to gaining client trust and driving business growth.
While property technology and applications offer real estate agents and property professionals a treasure trove of insights, often time pressures limit how the technology is used, leading to real estate agents underutilising the data at their fingertips.
Here, we explore new ways property professionals can do more with data to benefit clients, sales, and business overall.
Grappling with multiple applications and CRM platforms to access useful data has long been a sore point for property professionals. It’s time to break down the silos and create solutions that give agents and property professionals the tools to seamlessly and strategically use data to create opportunities and drive growth.
A new partnership between Australian owned data provider, National Property Group and PropTech Group is taking data insights to the next level.
The integration will deliver National Property Group’s data services into PropTech Group’s CRMs Eagle Software and VaultRE, the websites provided by PropTech Group subsidiary Website Blue, and the vendor proposals created in PropTech Group’s Designly, giving real estate agents access to market data for vendor proposal creation, their sales and PM CRMs, and automatic valuation models – all with one log in.
With a focus on addressing the core business needs of real estate agents and property professionals, the new National Property Group and PropTech Group data integration simplifies the functions of ‘finding, listing, selling and nurturing’ into one application.
Having access to a wealth of data insights in one application, that previously required one or more application logins, provides significant business benefits. Time efficiencies and productivity will be improved, proposals and AVMs will be presented with enhanced customer targeting and strategic insight, and customer conversations will be backed by meaningful, reliable data insights.
Being able to identify data trends such as recent sales, tenure and hot spots within the CRM data creates better prospecting conversions. National Property Group’s heat map searches integrated directly into the VaultRE platform provides simple visual representations of where opportunities lie for real estate agents.
When listing, property professionals build trust and confidence by having in-depth knowledge and understanding of current market conditions. Having detailed access within the VaultRE platform of property data and market activity, improves agent conversations by giving them the insights to react and answer any enquiries. Agents can generate key reports directly from VaultRE to improve the customer experience. Moving into ‘sell’ mode, the VaultRE and National Property Group integration is vital in communicating current market information that gives sellers and buyers confidence to make decisions.
Real estate has long been a competitive industry. For National Property Group customers, the partnership with PropTech Group delivers a best-in-class experience for their digital marketing presence by providing a seamless update to “Website Blue” for all digital requirements, in addition to website management with the leading real estate web provider, and simple listing upload to key listing portal providers.
Leading real estate experts speak to ‘touch points’ in driving business success. There are the usual standard touch points such as email, text, and newsletter distribution etc, but the most important touch points are conversations that add value. To make customer conversations valuable they need to be relevant, local, and current.
The advantage of the VaultRE and National Property Group integration is that VaultRE presents the customer who is due the touchpoint and National Property Group provides the rich information that adds value to the conversation. Utilising one platform, agents are empowered to serve and resend more information within the one platform rather than several, making it easy and consistent which improves productivity and ultimately leads to more listings and sales.
Real estate is a long game and keeping track of reports over time can be difficult. National Property Group and PropTech Group’s integration helps solve reporting inefficiencies by seamlessly recording reports in an agent’s VaultRE file cabinet, ensuring consistent conversations over time that build trust.
Data used strategically and effectively can be the most valuable asset property professionals hold. For real estate agencies, accessing, deciphering and utilising data is the single most important function that will be the key to winning more business.
Let me give you a typical example: the agent is speaking with a client around the market, the client is not ready, but requests a report as an update. The agent obliges and jumps into their data platform, runs the report, and sends it as a PDF via an email. If we are lucky, they may record the interaction, but due time and other pressures they don’t, and so much valuable data is lost.
Now let’s look at VaultRE and National Property Group integration scenario: the agent makes the call within VaultRE, the conversation results in a report request, they generate the report directly from VaultRE they send within the platform and all that golden information is captured - waiting to be used for the next touchpoint, improving customer experience, building trust so that they list with the agent.
For this reason, the National Property Group and PropTech Group integration project creates an environment that:
The real estate industry has come a very long way in a short space of time as technology has changed and enhanced the way agents and businesses go about their day.
Technology has been able to assist agents and free up their time so they can get more done and focus on higher-value activities. It's also allowed them to have more reach than ever before and get themselves and their listings in front of more people, more often.
This has had the effect of transforming a single agent or a small team into a very powerful commodity that can handle hundreds of deals every single year. Watch this short video as PropTech Group CEO, Joe Hanna, explains how PropTech Groups helps those in the real estate agency through new technology.
PropTech is the merging of technology with the property industry. Today, there are a myriad of technological tools that work to assist agents, property managers, conveyancers, valuers and mortgage brokers, just to name a few. PropTech effectively looks to use technology to help solve real-world problems that people in the industry face. When those problems can be solved with technology, it saves time and money, and importantly makes agents more efficient and better at what they do.
Good technology acts as a way to free up agents, so they can focus on things like building real-world relationships, negotiating deals, and handling many of the in-person conversations that technology can't replace.
Up until very recently, the real estate industry hadn't seen any big changes in the way it operated for decades. Listings were posted on agency windows or in the newspaper, people were communicated with over the phone or in person. Data was hard to come by or non-existent. Records were kept on paper, or on a PC at best.
As technology improved, many aspects of real estate changed for the better. Data became widely available. The ability to communicate improved dramatically. Suddenly, you could reach more people and manage your connections through things like CRMs. Everything moved online and now even the sales process is done with technology.
By using technology, agents are able to spend more time doing what they do best - which is forming real-life connections and helping people navigate what is normally the largest financial transaction of their lives. Real-life connections with people and being able to negotiate complex deals are some things that technology can assist with, but can never replace. Technology acts as a way to free up time, become more productive, and help you reach more people, so that you can do your job better.
One way that technology has really revolutionised the way all agents operate is through automation. Automation can be as simple as sending a bulk email or SMS, or a more complex task like identifying would-be vendors from your database. Whatever it is, by using automation, you can reach more people faster and more effectively.
Another area where automation takes another big leap forward is through artificial intelligence. AI allows you to manage all the data that has been collected, sift through it to find important information. For example, being able to better identify a vendor that is getting really to sell their property based on their habits and interactions with your communications. It could be the difference between winning a listing, versus the listing not even making it to your radar.
Data is also a big game changer in recent times. These days, there is so much access to data that if you're not utilising it, you are being left behind. There is so much data on homes, market conditions, vendors and would-be buyers, that you need to be making the most of all the tools that utilise this data to stay competitive.
In years gone by, agents were trying to get in front of as many people as they could and somehow keep track of all the contacts they came in touch with. This proved to be a difficult task and many vendors got lost in the process. Today, mobile apps and 24/7 cloud access make it easier than ever to access your database wherever you are, at any time.
Finally, one of the most powerful game-changers in real estate has been the ability to customise marketing pipelines into different segments. This way, you can put your time and energy into marketing, and allow the leads and contacts to be filtered through various pipelines. This means that your leads are getting information that's relevant to them and suited their stage of the buying and/or selling journey. That way, you're able to offer more value, creating a better reputation for yourself and your business.
PropTech has revolutionised the real estate industry in ground breaking ways. As technology continues to improve, it's vital that agents and agencies continue to stay on top of the latest tools and trends to make sure they not only stay competitive, but actually create a competitive advantage.
