THE BIG CHILL!!

THE BIG CHILL!!

There are a number of market scenarios being bandied about at the moment and whichever way one looks for houses it is not that appealing. Overall the market is facing the greatest shortage of houses since the recession years of the early 1990’s. With many now opting to launch in Spring/Summer, it could well be a very lean Winter due entirely to a lack of interest by vendors. Cast your mind back to 1995. Since then the market has been very generous and with the announcement that Sydney would host the 2000 Olympics, responded accordingly. For the very first time since 1995, this Winter could possibly go down on record as the quietest, given the reluctance to trade places.

Should this happen (and it is a very strong possibility) we will see a shift from traditional offline (newspaper) advertising to the cost effective online advertising. We are of the opinion that over Winter, we will see online campaigns target database marketing over the much more expensive offline alternatives. Usually when this happens, vendors adopt a mindset of ‘see what happens over the Winter months’ with quiet marketing, then a full blown campaign in Summer. Should this happen, real estate agents who are not running hi-tech online strategies, will face their hardest challenge in years.

But it’s not all doom and gloom. We had another impressive week with subscriber sales climbing to $456,806,000. We are closing in fast on the magic $500,000,000 in online sales. This week we exchanged $14,645,000 in property and no longer available are 11 Cardinal Street Mosman, 11 Superba Parade Mosman, Ellamatta Road Mosman and 8/8 King George Street Lavender Bay (in conjunction with Richardson & Wrench Double Bay). Unfortunately, we are not replenishing our stock of listings – which explains the concern in the marketplace.

The movement of shoppers online continues to out-perform in the market if what Google is achieving is any indicator (and we are of the opinion that it is the best indicator). In 2006 Google’s share of Internet searches grew from 36.4 per cent in 2005 to 42.7 per cent in 2006. Yahoo went from 30.6 per cent in 2005 to 28.0 per cent in 2006, MSN in 2005 had 16.5 per cent and in 2006 fell to 13.2 per cent (Source: ComScore Media Metrix).

Google is now the No.4 Internet brand (in millions of visitors). Number 1 is Yahoo 105.0 followed by Microsoft at 99.3 then MSN on 95.1, Google on 93.2 and AOL at 75.3 (Source: Nielsen/NetRatings March 2006). The number of online visitors continues to increase which all but confirms why businesses spend more time developing new technologies. One brand that we are watching closely is www.zillow.com which allows consumers to map the neighbuorhoods of interest as it can show exact sales data on a particular street in America. This is not yet available in Australia. However, it will only be a matter of time, as GoogleEarth can provide the technology. Property portals will undergo dramatic changes in coming years as the competition hots up in an attempt to dominate the Australian online property markets.

Watch the stock levels in coming weeks to see if our predictions prove correct. Just how transparent the market will be over May/June/July and August remains to be seen. One thing we do know these days is that in real estate, a touch of the chameleon is necessary to compete in an arena where the goal posts are constantly moving. Although nobody wants to hear the fulltime whistle – let’s just say that it will be a very interesting second half. Cheers ^__^

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