Real estate becoming the Hunger Games

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GONE are the days when selling property was a cake walk, it has become survival of the fittest for real estate agents, who are increasingly fighting for dominance in a slowing market with a diminishing pool of sellers and buyers, according to the profession’s peak body.

The REIA said the market is experiencing a rationalisation of agents due to tighter lending criteria which is seeing longer listing times and stagnant prices particularly on the east coast.

“Selling real estate is not a walk in the park. Gone are the days of the boom market where agents were able to quickly sell properties with limited marketing,” president Malcolm Gunning declared.

“We are already seeing that the current conditions are putting a strain on low-cost models which rose to prominence at the height of the market,” he added.

One brand struggling locally is Purplebricks. Recently Fairfax reported that the UK-listed fixed-fee agency is expected to suffer losses of $40 million to $50 million and that agents who signed up with the brand are jumping ship.

“The credit squeeze is seeing less money and properties on the market for longer, particularly in Sydney,” he added.

According to Corelogic’s latest housing market update in June 2018, homes in Sydney were selling in 43 days on average compared with 31 days at the same time last year.

Sydney auction volumes are also by 45% compared to a year ago. Similarly Melbourne auction volumes are down by around 30% over the same period, according to AMP Capital chief economist Shane Oliver.

Gunning said in a slower and more volatile market, skilled professionals with experience and technology will be most effective and sought by vendors as trusted advisers.

“This will encourage an environment where those agents that are better qualified, more skilled, from respected established agencies with strong local community involvement, will begin to dominate,” he concluded.

Australian Property Journal