White Paper – May 2018
All the evidence now points to the fact that Australia and New Zealand’s housing market eased back further in May with many commentators saying the rate of decline in prices is actually accelerating. But as a group, we sold more than $4.1 billion of property across Australasia, which is just six per cent shy of the boom time peak last May.
We know buyer sentiment has firmly switched from fear of missing out to a fear of wondering if there’s further price falls. A number of things have led to these falls – including changing the lenders lack of appetite for interest only loans and tightening lending criteria in the wake of the banking royal commission. Now more than ever our systems, processes and structure is all important to support our vendors.
Congratulations to everyone in the New Zealand network for producing an all-time PB with $1 billion in unconditional sales in May. The New Zealand’s government’s ban on foreigners buying existing homes in an attempt to cool its red-hot housing market appears to have actually spurred on a spree of home buying in pockets of the island nation instead. I expect New Zealand will also have a strong June also but it will be interesting to see what the new fiscal year brings.
Ray White Remuera was also acknowledged as the number one Ray White office in New Zealand for the fourth year running.
Anton Huang from Ray White Howick was acknowledged as the leading salesperson.
John Quiambao from Ray White Remuera received the number two award.
Steve Koerber of Ray White Remuera was number three for the group in residential sales.
And congratulations too to our Rural network which has recorded four consecutive months of its highest ever sales results, totalling nearly $600 million in sales in the first four months of 2018.
There has been a lot focus put on our customer’s behaviour changing and now is the time for all sales agents to commit to processes and rigorous structure as we know these are proven recipes in all markets.
In Australia, the auction clearance rate is now hovering under 60 per cent which is a five year low as there has been a definite shift away from auctions generally across the broader market. To us that highlighted that many agents lost their fundamental auction skills during the boom cycle.
In fact, Ray White’s auction numbers are actually slightly up year on year but the total number of auctions in the market are down, along with the clearance rate.
Our Sydney Metro CEO Andrew Crauford said the preparation involved in running an auction campaign is one of Ray White’s core strengths and we’ll continue to teach our agents how to create competition in all markets across Australasia.
The increase in days on market is also directly tied to subdued demand. He says there is reduced buyer urgency in the market right now as all the evidence points to the fact that the market peaked eight months ago but sellers and buyers have to weight up their own personal circumstances about the best time to buy or sell.
We believe that auctions still achieve the best result through transparent competition. Why would you take away the one piece of the property puzzle that drives urgency?
Our stock levels shifted higher again in May now as some buyers may be waiting to see what will be available after winter, and maybe people are wondering if prices will keep coming down.
Here in Brisbane’s leafy western suburbs, it is great to see our Ray White Sherwood principals Cameron Crouch and Aimee Carding open their new business in Graceville.
More than 50 of our principals from every state in Australia and a number from New Zealand also gathered in Sydney during May to speak about the future of real estate. Keynote speaker Belinda Brosnan spoke about how leaders should adapt with change and then they focused on client service and creating customers for life through our after sales programs and advocates. The sessions were led by Mark McLeod into the roles and relationships between the business owner and the salesperson. The feedback from the day has been positive with a lot of ongoing interaction. There was some real energy from the participants around this group gathering frequently and hopefully adding more of our leaders over time.
As a group our Net Promoter Score remains high at 84 and the network sent more than 10000 surveys to our buyers and sellers in May which is great to see as we maintain our focus on a high standard of customer service.
And congratulations to all in the Loan Market network who set a new record in May with $1.42 billion in applications and $998 million in approvals. The group’s $865 million in settlements was also very pleasing. May was an extremely positive result and leaves Loan Market well placed for coming months with such strong pipeline numbers.
Until next month. I’m Dan White.