After a solid five years of growth, change in the property market was inevitable. In 2019, most major capital cities are experiencing the natural property cycle slowdown, which happens every few years.
There are some exceptions. Canberra and Hobart are on the up, experiencing increases as investors seek value for money. In Perth, where the market has been dire for several years, homeowners should finally experience an increase in prices in 2019. In New Zealand, property owners in Hamilton and Christchurch are also seeing prices climb.
Having been in this industry for over 40 years, I’ve witnessed the dizzying highs and the sobering lows of the property cycle several times over. To put things in perspective, house prices in Australia have quadrupled over the last 25 years. Even with the GFC the trend has always been positive.
The current downturn might seem exceptional but those of us who’ve been around for a while understand we’re experiencing a standard ‘settling’ after a boom period. Prices will stabilise over the coming months then begin to rise again.
A property slowdown shouldn’t be reason to panic but if you’re new to the industry this one might have come as a shock. Here’s my advice to get you through leaner times.
Don’t lose heart in a downturn. Keep helping customers; good times will come again.
Two years ago, properties were almost selling themselves. Buyers bid enthusiastically at auction and even made purchases without crossing the threshold of a home.
Now, with lending tightening and prices dropping, it’s a buyers’ market. Those looking to purchase are taking their time and proceeding with caution. They want the best value for money and they’ll cross every ‘t’ and dot every ‘i’ before they put in an offer.
Buyers haven’t gone away but yes, they’ve changed. For you as a sales agent or real estate agency principal, this unfortunately means some extra work. You might find each sale takes more of your time than it did in 2016 and 2017. An auction campaign could run for six or eight weeks instead of four weeks while buyers secure finance. Negotiations could take longer and you might need to host more open homes to generate and build the right amount of demand.
By being patient and working a little longer and harder (not so much that you burn out), you’ll reap the rewards. Just remember to schedule some time off once the property settles.
To charge higher fees and continue to profit during a downturn, you need to be an expert in your field. You might wish to do some extra training in negotiation, property valuations or marketing to stand out from the competition.
Right now, sellers need a reliable and trusted adviser to help them navigate these troubled property waters (and they’re willing to pay for more experienced hands). Keep them happy by building on your current experience and delivering results your customers will want to shout from the rooftops.
Minimise operating costs
While you can’t predict your income, it’s possible to limit your outgoings. You know my mantra: It’s not what you earn, it’s what you keep that counts. Hopefully, this won’t mean letting staff members go but you might find you can streamline operations and reduce your expenses.
For a low monthly subscription cost, a few additional software automations could free up someone on your admin team to focus on lead generation and improved customer support.
Boost your marketing
Although this might seem counter intuitive, when all around you are losing their heads, it’s time to step into the limelight. No matter what the climate is, there will always be people who need to buy and sell property. As the saying goes, “What you seek is seeking you”. With the right marketing, you’ll be easier to find.
Word-of-mouth referral is key for agents so as well as working on articles, market updates, promotional videos and mail cards, be sure to keep in touch with your clients on a personal level. Set up an automated email requesting an online review and remind your clients how much you appreciate referrals.
And remember; partner marketing is one of the best ways to grow your client base and it can be extremely cost effective. On your quiet days, reach out to businesses with the same target audience as you and start a dialogue on how you can share clients. This includes mortgage brokers, buyers’ agents, financial planners and property stylists.
Keep your chin up
When the going gets tough… you get the drift!
Real estate isn’t for everyone. It’s during times like these that real estate industry survivors, those who are skilled and determined, emerge. It’s also the time when agents who can’t cope quit the industry. Just remember that, with the right attitude and a strategic approach, you’ll adapt to the ‘new normal’ and still achieve excellent results for your clients.