Realmark Coastal climbs 10 spots by doing more with less

The rankings data revealed that the agency’s efficiency rating increased from 20.75 last year to 22 this year.

The efficiency rate is calculated by dividing the total number of settlements by the number of sales-focused staff, including sales support.

The number of sales agents grew from 23 to 27 this year, while sales support staff rose from 13 to 16.

Meanwhile, its total settlement values increased by 27.5 per cent year-on-year to $783.2 million from 961 settlements.

Mr Hughes spoke to REB about how embedding systems and processes drove efficiencies, why medium-sized offices should consider amalgamating, and the agency’s plans for 2023.

Realmark Coastal has secured a top 10 ranking this year. How did you do it?

I think we’ve mastered the basics and championed them extremely well. I’m very excited about this ranking because we’re up against agencies with multi-office networks and over 100 salespeople, whereas we’ve got 27. What I take from these rankings is that they consider the efficiency factor. Our agents are more efficient and successful because their turnover, listings, and sales are larger. They produce more results efficiently before they reach capacity due to our systems and processes. Rather than having to invent it themselves, our agents can duplicate our processes. Our highest profile team inside the company writes $4.5 million in gross commission income while others write $2 million.  

What’s the climate like for other sales offices in Western Australia?

I think the margins, size, efficiencies, and economies of scale in Western Australian offices are going to continue to be squeezed, particularly in medium-sized offices. Unless you’re a big office with economies of scale (or a very small office), it’s going to be very hard to do things. I would advise mid-sized offices to perhaps amalgamate. I think two medium-sized offices would make very minimal net profit but it might be a different story if they work together as one office. At the end of the day, businesses need to stay afloat to keep people in jobs. I see merit in having those discussions with other agencies and amalgamating in some capacity in the future.

What has demand for property been like in your area?

I feel it’s more of a seller’s market than a buyer’s market because of the tight supply. For example, we recently had 7,200 homes for sale in Western Australia, whereas traditionally, we have had between 12,000 to 13,000 homes. But we are seeing some strong buyer activity and a buoyant market. We’ve got a localised and eastern state buyer pool and an international buyer pool because of the affordability and the jobs in mining. We operate in markets all over Perth in the price range of between $300,000 to $500,000 at the lower end through to the top end at around $5 million to $6 million in the waterfront.

What challenges have you faced as interest rates rise and cost-of-living pressures mount for households?

We haven’t seen it dampen the market. We’re still seeing strong activity at open homes. While interest rates have gone up, a lot of households accumulated substantial amounts of savings during COVID-19 while many accessed stimulus packages. The younger generation who may never have seen high interest rates may be gobsmacked that they are rising now. However, the seasoned home owner and buyer in Western Australia have seen interest rates rise to 18 per cent before so they know that 5 or 6 per cent is still relatively cheap money. I think the underlying fundamentals are still strong. We’ve got higher buyer demand and lower supply than normal. I see lots of positives in Western Australia.

Have you recruited staff in the past year?

We’re always looking for good people. We recently recruited a head of business development in our property management department as well as another property manager. We’ve also recruited sales associate James Thompson who specialises in residential property sales in the city of South Perth and surrounds. We’ve increased our administration staff as our volumes increased to support our sales team.

Have you faced any challenges in recruiting staff?

Every market presents its own challenges. When you’re in a boom market like we’re in now, recruiting staff is challenging, especially when trying to match the salary expectations of the applicants. But I think we’re well-equipped. Businesses need to continually examine their offering because if you don’t offer the value employees expect, they’ll leave or get poached by other companies.

What are your plans for 2023?

We will continue growing our footprint over the greater Perth region. We were traditionally a coastal agency with coastal properties and agents, but we’ve expanded further inland, south and north. I think we’ll continue growing in an efficient way with backend support.

To see the full list of the Top 50 Sales Offices for 2023, click here.