ANOTHER BRICK HITS THE WALL!

ANOTHER BRICK HITS THE WALL!

The brick has finally dropped!! The “Governor of Moolah” announced (after he had not decided to raise interest rates last week), that the process applied to collect property market data is “hopeless”. Hallelujah !! Praise the “Governor of Moolah”, I have been saying for four years that the process applied to monitor the real estate market is pathetically incorrect. The current process of monitoring results, which then allows consumers to formulate an uneducated opinion of the market (which has been identified), is based totally on “unclearance rates”. There is no follow-up on those properties that are passed in, yet, the property market today is measured basically, on clearance results !! Agents also sell by private treaty and expressions of interest and quiet listings that never hit the market, which strangely are never entered nor, recorded into overall current market climate. Two weeks ago, clearance rates hit thirty two percent !! What most did not realise, is that just thirty two percent of the market was recorded and the other sixty eight percent of the property market then drifted off to the land of the never never.

Now we see the “collectors of misinformation” embroiled in heated debate, resembling a modern day version of “who is on first !!” The Commonwealth Bank of Australia, revealed that it actually produces not one, but two reports, which today, are in total conflict with one another. Their public data revealed that the housing market is stronger than the private data which they offered to our “Governor of Moolah”. It is not just “which bank” is now in a state of confusion. Alas, in total disagreement with one another are the Australian Bureau of Statistics, Australian Property Monitors, Residex and the Real Estate Institute of Australia, given that the data they each supply contradicts one other. Also, this has now been going on for years !!How interesting, that as soon as our Governor comes out and announces that the systems are flawed, those who collate and offer their opinion on the state of play, (the majority have no idea, as they have no actual contact with our industry), bunker down in damage control. The reality is that they run their businesses on shoe string budgets, hence no follow-up on passed in properties, nor do they offer the facility to actually monitor private treaty, expressions of interest, and those off-market sales.

There is an answer !! This system can be fixed, although quite a few will have their noses out of joint. My solution is that the Real Estate Institute for each state collects, then distributes this information. This would mean that all real estate agencies would have to become members of their respective Institutes (which is long overdue), to pull our industry into line. Thus, greater control within the industry as all would then be accountable, as they are then bound by its Code of Conduct. The member agencies would then have to fill out monthly returns which would include every property they sold, together with rental market information. This is the only way that the property market can be accurately reported, as it demands information that is based on exchanged properties. Not (as now) when a $7,000,000 sale with a twelve month settlement that is no use to the statistics, emerges in June 2005. The market demands this information in July 2004, not twelve months later. In a perfect world, (which we certainly don’t have), it would reveal that the property market is not as ailing as some are led to believe. A major overhaul of data collection is now required. Purchasers at the moment are obviously not that strong on public auctions (look at the clearance rates). We are now seeing a movement of agents changing direction, adopting a selling method of private treaty and expressions of interest. These methods of selling properties are not monitored so, yet again, the public will perceive that the property market has come to an abrupt halt.

To make matters worse, the “Governor of Moolah”, probably choked on his corn flakes, when the Australian Bureau of Statistics announced that housing finance approvals rose in April by 0.7 per cent. Up again on the 2.7 per cent increase in March. Just last week, the Governor said, “I am happy with the way the market is softening, and would like to see it fall further”. This further identifies that too many are looking at the ‘Unclearance Rates’, as a measured guideline for the property industry. My money is now on a rate increase of 0.25 percent, in the near future as the “Governor of Moolah”, will argue that he has been profoundly misled with industry data.

Yes, the market has changed in 2004. Thanks to those Articles of Mass Destruction in the newspapers. The only difference I see is that there is now a change in the methodology of selling. We are using Internet marketing and all our new properties are on e-mail alerts. The good news is that already, quite a few have offer and acceptance as we are using our database. Again, this sales information will not be collected. It can be collected on settlement, which in some instances is six months down the track. We have put most of our public auction campaigns to bed during the Winter hibernation. That certainly does not mean that the same can be said for the purchasers who now have to second guess agents on how much interest is on a property.This method of sale is not transparent to purchasers, whereas a public auction is there for all to see.

We just happen to really enjoy this method of marketing. One thing we do know is ………… who is on first !! Cheers and clink ^__^

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