White Paper February
What happened to the markets in February?
February is always an absorbing month. Heaps of predictions for what the rest of the new year will bring! And it was no different this time around. Seems that, over the Christmas holidays, people’s thoughts turn to the year ahead. Too much time to think? Because there were so many wild predictions coming from many ‘so called’ experts.
“House prices to drop by 50 per cent” was one memorable claim by a self proclaimed expert! ‘Property must follow the share market’ – meaning that a downturn in the residential market has begun.
On top of that, in Australia, changes to negative gearing for property were announced as ALP policy; forgetting what damage such a similar implemented policy did in the 1980s!
So how did Ray White go in February? At just on $3.2billion, we were within 2 percent of last year’s result. Most markets closely matched last year, but Victoria was a standout with a huge record February result. South Australia’s performance was also admirable. New Zealand’s result closely resembled the Australian pattern.
Last month we talked about the success of our Gold Coast auction programme when Ray White presented 200 properties over a few days with a 70 percent clearance rate. An often heard comment from buyers was that there is a new commitment to invest within Australia because of the low Australian dollar. People are buying their second homes now within the country rather than the trend, increasingly observable, of what was happening in 2015.
One negative factor, however, is the property markets in the mineral resources area across Australia. The boom conditions with sharply increasing prices have been reversed completely. Many investors, lured into those markets by so called ‘property gurus’ have been badly hurt.
Stock levels in the commercial market are slowly rebuilding up to 2015 levels. With nearly $200m of commercial property leased or sold during the month, our team is seeing continued purchaser confidence. A highlight of February was a 26-property auction event held by the Gold Coast Commercial team, with a $6.2m development site being sold by MIke Willems under the hammer following competitive bidding.
February saw our partners at Loan Market achieve more than $1 billion in lodgements and $600 million in settlements. Victoria was the leading state with more than $200 million in settled loans.
February also saw the prestigious Better Business Awards kick off for 2016. Loan Market Queensland’s Phil Rogers was honoured as the inaugural Regional Broker of the Year. In Victoria, Loan Market Geelong City took out Best Regional Office, Josh Gilbert was named Rising Star and Marios Rokka was crowned Best Finance Broker. Award ceremonies will continue in March with NSW, South Australia and Western Australia to come.
So it’s on to March – traditionally the industry’s best month of the year. Stock levels have picked up nicely. There’s a perception that the market is well balanced.
What’s new at Ray White?
A huge event for Ray White which began in February was ‘Raise your Hand’ – a liftout publication in all the News Limited national Sunday newspapers. It showcased a huge Australia-wide integrated marketing campaign. Almost 400 individual properties were showcased in the document, but the number of properties that will be taken to auction will be in excess of 1,000. The use of the new augmented reality app brought all properties to life! This campaign has been carefully integrated with a corresponding digital exposure.
This campaign broadens the opportunity for everyone to participate. Sure, local buyers dominate, but some of the best purchasers come from other markets. The use of Ray White’s new online auction technology is having an amazing impact.
During the month, the RateMyAgent website produced, for the first time, its list of most referred agents. It was a thrill for Ray White to perform so powerfully with Ray White Glen Waverley (Vic) the most preferred agency in Australia. This corresponds with the Group’s commitment to customer excellence with our customer satisfaction programme designed to provide an intelligent and tailored experience to each of our customers. It’s proving to be a great asset with members of our sales team to show proof of individual performance.
Our Projects team in Sydney will launch three new premium residential developments this month- The Miller in North Sydney with 183 apartments, Quartet in Lane Cove with 237 apartments and Union Place in Jannali with 88 apartments; all being delivered by exceptional development companies and meeting new benchmarks for finishes and amenity.
Ray White Marine’s introduction of the successful property auction model to the boating industry is continuing to be embraced following on from circa $10 million under the hammer sales over summer.
February was the month when our corporate teams met. Over 160 delegates participated in the conference: “The Power of the Customer”, focusing on our performance standards, has never been more important. We are thrilled at the commitment shown by those attending the conference.
As always, we welcome our new offices: Blacktown City (NSW), Kallangur (Qld), and Howlong (Vic).