STAND AND DELIVER OR FROZE AND CLOSE!!

STAND AND DELIVER OR FROZE AND CLOSE!!

At the end of each quarter, we compare it with the same quarter last year, to see how we are tracking. Given the reduced volumes of properties (more particularly houses) and the pending closures of real estate agencies, it is truth serum time. For the September quarter 2004 in houses, the number sold by RWM compared to September quarter 2005, identified a 70.00 per cent increase, with the total value of houses sold increasing by 93.921 per cent, and sales staff numbers remaining the same. In the September 2004 quarter, our average sale price for a home was $2,374,000 compared to September quarter 2005 when it jumped to $2,708,000. What this clearly proves is that the average price in Mosman for a house is much higher than most are led to believe. For apartments, the number sold dropped by 5.55 per cent, with the total value of sold apartments increasing by 22.454 per cent. In the September quarter 2004 our average price for an apartment was $619,777 compared to September quarter 2005 where it jumped to $803,558. When we reported back for duty in January 2005 our subscriber sales were $277,065,000 and this week they climbed to $372,285,000 which clearly identifies that the electronic side of the business continues to out perform other agencies. This week we sold eight properties to a value of $16,475,000, with eight of our last ten sales going to subscribers.

No longer available are 29 Reginald Street (sold at auction), 42 Medusa Street (sold week one), 17 Illiliwa Street (sold week one), 24 Kardinia Road, 2/38 Botanic Road, 62/16 Bardwell Road, 1/38 Parriwi Road and 75 Hale Road. With more than a few noticing a very strong house market, this should not be confused with the apartment market. The apartment market is active and responding well, however it does not have as much sting as the house market demonstrates at the moment. Investors are back looking however, at this juncture, they are still evaluating their options. This could change very quickly as this week’s announcement by the Housing Industry Association is that “Sydney will run out of vacant rental property within eighteen months”. They attribute this prediction to the decline in investors and the slow approval processes of new developments. We have been calling this one for months now and we currently have just nine managements available for rental. Rents will jump dramatically, which explains why we placed a buy recommendation on apartments some months ago. It will only be a matter of time before the investor “pack mentality” rubs off and like the housing market the lower end of the market is set for a run similar to the current state of the house market. It will be just a matter of weeks, not months for our prediction to come to fruition. The rental market needs investors to relieve the pressure of restricted properties available. At the moment rental demand well and truly exceeds supply, and weekly rental prices are being increased.

For quite sometime, it has been argued that internet enquiries are stronger from www.domain.com.au over the www.realestate.com.au mainly due to the strong readership of The Sydney Morning Herald by Mosman residents. These two portals dominate the real estate industry, so it came as a surprise this week when realestate announced it is now pursuing the offline market by introducing a Northern Suburbs property guide launching on October 27 and November 24. With a 37,000 circulation delivered door to door on the Lower North Shore (22 suburbs in total), and it is free, which is something that we as a business do not come across very often. The powers that be at realestate claim that in similar campaigns around Sydney it led to approximately a thirty per cent increase for online traffic. Not sure what Cumberland Newspaper Group think of the move, however it just highlights that the Mosman market continues to remain in the spot light with the constant battle for those ‘rivers of gold’. The quite achiever at the moment is the move by www.google.com.au into our property market where it links properties direct from the domain and realestate portals – tsk tsk!! Whilst this adds traffic to those respective sites, it also is providing google with market awareness as it allows visitors a much quicker search time. It also means that if it gains greater momentum, it in turn will become a competitor. All realestate and domain need to do is provide a street search facility on their respective home pages and they have matched the google approach. With agents still unaware of optimizing methods, many properties fall off the radar with the google search method, so it will take time for the service to become a comprehensive search facility.

The property markets have eight weeks left in the tank before the market winds down for 2005. So from that perspective it is “make or break” time for many agencies given the reduced number of properties available for sale. We will witness intense marketing campaigns over the coming weeks so again it will be an intriguing market for the voyeurs. From mid December the markets move to 100% online marketing which could be a clue why realestate is so anxious to increase its market share. Whatever the outcome, the businesses that have strong online strategies will continue to out-perform which is exactly what is happening right now. Cheers ^_-^

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