Login
iscover
Nine in 10 real estate agencies believe their revenue will grow over the coming 12 months, according to the latest from NAB.
The 2024 financial year was a challenging time for real estate business across the country, with steep interest rate rises and brutal living costs deterring many Australians from making significant property moves.
Despite the challenges, NAB’s Next Gen Real Estate report, which sought to unpack the data and trends shaping tomorrow’s real estate businesses, found that 80 per cent of real estate agencies saw revenue growth over the past 12 months – and the outlook for FY2025 is equally optimistic.
Donald Jamieson, head of professional services at NAB, attributed the resilience of Australia’s property sector to the “evergreen human need for a place to live”.
“While we can talk about interest rates and inflation, people still have to move house. People still have families and need to upgrade their home, or get a job in a different town, and need to sell and buy,” said Jamieson.
“There are a lot of factors going on in the market all the time, but I think that positive outlook remains and I don’t see that changing anytime soon.”
With many market watchers predicting a rate cut in coming months, there is the possibility that a new wave of optimism will be injected into the property market.
“The market is increasingly thinking we’re at peak rates,” explained NAB head of property services Mark Browning.
“Some are wanting to get in and not sit on the sidelines, with a view that property prices could increase later this year as momentum builds with rates easing.”
One factor that will prove integral to agencies’ resilience over the years to come is the strength of their rent rolls.
Jamieson stated: “The rent roll is the underpinning or the vanilla part of the business. It has cash coming in on a regular basis and takes the volatility out from the sales side.”
“There are agencies I’ve seen in the past year that have just focused on their sales and sold off their rent roll because they were in a really strong sales cycle. That cycle turned and those agencies didn’t survive, because they had no revenue source,” said Jamieson.
“The rent roll gives you an asset over the longer term that you own, that you can sell and that you can borrow against. If we’re looking at lending into the sector, that’s what we’re looking at lending against,” he concluded.
