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If there is one resounding issue that agents are facing in the market right now, it is the volume of stock. There is none – or at least a worryingly low supply. When properties sell, there is little coming down the funnel to replace them. Governments could be doing a lot more to help.
The liquidity of stock right now has very little to do with inflation and international issues, and more to do with poor government policy over previous decades.
Local, state and federal government needs to find more effective ways to help home buyers, sellers, investors, landlords and tenants alike.
I applauded the WA government when it announced its policy to help developers get homes to the markets sooner. The SA government recently announced it would abolish stamp duty for eligible first home buyers building or buying a new home.
Even better, the federal government said it will create a $2 billion Social Housing Accelerator, which is meant to deliver money within two weeks for projects to speed up the construction of thousands of homes, but outcomes will rely heavily on whether things can be achieved in a viable time frame – and whether they are blocked by obstructive forces.
The optimist in me hopes that they can!
What is the construction industry’s take on this? Have they been consulted on their ability to deliver, given materials and labour constraints and backlog of work? And given those issues, nobody in the construction game is likely to agree to a fixed price contract, are they?
Agents need to have their focus fully on getting stock right now or they won’t survive in the long or even medium term.
How do they do this?
Their emphasis must be on building relational capital, which is the number and quality of relationships you have established in your market.
Establishing and maintaining relationships should be the primary focus.
They must ensure their reputation is unchallengeable and promoted in a healthy fashion.
They should be getting in front of as many people as they possibly can.
Their levels of effort and enthusiasm need to be superhuman, undeniable, observable and honest.
And they must treat buyers better than ever before because how you treat buyers today will be remembered. Treating them exceptionally well is critical because they will be your future – as sellers to bring you a listing or as repeat buyers.
If you don’t do these unfailingly as an agent, rest assured there is another agent out there who will and get the business.
Those agents who went hard right through the end of last year and kept picking up the pace through the start of this year are the ones most on track now – and if not, are in a better place to turn business around now. But even these agents have to step up to it by relentlessly focusing on reigniting old contacts, by chasing super hard on past and present buyers and sellers, and doing a critical check of their databases.
There may be another interest rate increase or two ahead, but perhaps the uncertainty of interest rates is beginning to wane. As home owners begin to gain confidence, they – as sellers – enter the consideration phase, which leads into decision making. With more certainty, more confidence, more decisions, more activity and finally, listing, rising stock volumes.
However, whilst a sense of optimism seems to be on the horizon, conditions might still squeeze real estate agents for the coming months, which means that taking control of effort and outcomes is paramount.
Agents can recapture a sense of control by focusing on the points mentioned earlier. Just increasing the conversations with people in their markets can yield results; those results will be dictated by the volume of effective contacts.
There’s still a ways to go, but we do live in one of the most robust and economically safe countries in the world.
We are feeling acute pressures as a result of lack of foresight. Let’s hope what they – governments, relevant bodies and aligned industries – are looking at now will happen sooner rather than later.
Joel Davoren is the managing director of RE/MAX Australia
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