IT’S STILL ALIVE, EVEN THOUGH IT HIT FIVE!

IT’S STILL ALIVE, EVEN THOUGH IT HIT FIVE!

In the good times the real estate industry wants to advertise, and in the bad times they have to !! In last week’s edition we identified that clearance rates in Mosman, Cremorne, Neutral Bay and Cammeray were at just five per cent, yes !! You read correctly. Last weekend the Sydney clearance rates were 37.4 per cent which is a long way south from the peaks of 2002 where it was 80 per cent. Which explains why the agents are moving swiftly to private treaty and expressions of interest for the June/July market. The purchasers are still there, but at the minute they don’t like public auctions, which in real terms identifies that the market accelerator is slowing down, but should not be construed as having stopped. This is actually a very interesting time for the real estate industry and as to which direction it will now pursue, given that colour newspaper advertising will be the hardest hit. The agents who have been investing heavily in Internet development will be pursuing this form of marketing. It is no surprise that these businesses are in the box seat (if they have been collecting and saving data), as this is the most cost effective colour advertising medium after classifieds.

Whilst we all now know that any property data releases are somewhat sceptical, the attention is now on home lending figures, which our very own ‘Governor of Moolah’, stills believes, the current “levels are far to high”. If the real estate industry is still active (and it certainly is), these are the best figures to confirm the current activity. We do know that the March quarter identified that there were 38.2 per cent fewer house sales, and 41.4 per cent fewer unit sales as compared with the same quarter last year, this was actually the lowest trading quarter since March 1993. The present levels of household debt released by the Reserve Bank of Australia, identified household debt sitting at $670 billion and housing debt was at $570 billion, which is more than double the levels five years ago.

Not all eyes are on the home lending figures, we also monitor the web-sites to see what properties are moving and we moved a few this week, 5 Shellbank Parade, sold it is confidential (it sold in the price quote range) which is a positive top end sale for the market. There were three parties in the negotiation process, and it sold before the closing date. 41 Dalton Road, sold for $1,050,000, 34 Lang Street $880,000, and 10/3 Yeo Street $480,000. We also have another five properties under negotiation, so we still remain up-beat about our market. If the properties are valued correctly they are finding new owners, which contradicts those agents who are plucking figures from thin air, about how much the market has dropped. We do know that our property markets are no longer showing capital appreciation annually at ten per cent, which identifies that prices have not dropped, they have just remained the same since last year.

Once again this week we looked at a property, where another agent was fifty per cent higher in his opinion of value. These agencies use the POA (Price on Application) on their web-sites after the property fails to sell, so they can avoid the under-quote and over-quote legislation. It is interesting to see that a large percentage of the property voyeurs are waking up to this, POA can also mean, ‘Price Obesity Agency’ !!

With the exception of quite a few real estate agencies, the business world is still performing well, and the future still looks promising. The bricks and mortar market does not have a finish line. It just has different paces which sees it move in weird and wonderful ways (not for everyone). The main difference is simply attending to what we do right as a business, the one word that has been missing for a few years now in our industry is a word called service !! The agency who serves – deserves !! Cheers and clink ^__^

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