It’s easy for some agents to lose perspective and prematurely scribe the market’s obituary. In particular, those who joined the industry in the last three years – who might not have experienced the ups and downs of the real estate cycle – can struggle. Often it’s these agents who exit the industry when the market softens.
Yes, conditions have cooled. However let’s not forget that we are transitioning from not just a once-in-a-generation market, but potentially a once-in-a-lifetime market. Did we really expect the boom market to sustain such a steep growth trajectory?
Tackling the market imbalance
The exponential rise of Sydney property prices added fuel to talk of a ‘bubble’, but thankfully the market has started to level off. The recently introduced macro-prudential measures may have put the cat amongst the pigeons but, despite the initial sense of confusion and uncertainty, they are needed. The market was outperforming even the most optimistic forecasts with property prices increasing at an alarming and potentially unsustainable rate.
Encouraged by record-low interest rates, investors were acquiring a massively disproportionate amount of property, leaving scores of owner-occupiers on the sidelines. It’s a relief to see lending institutions now taking a more responsible approach. They have a greater focus on stimulating owner-occupier lending and ensuring investors aren’t exposed to unnecessary risk. These measures may not be universally popular, but they are necessary. After all, irresponsible lending was one of the main catalysts of the Global Financial Crisis.
“My advice for agents is to remain calm, maintain focus and make delivering exemplary service a priority.”
Back to basics
Inevitably, the cooling market does make properties slightly harder to sell. For agents, the key – as it always has been – is to get back to basics. This means providing clients with honest advice to help align their expectations with current market reality. There is the opportunity for all agents to exhibit exemplary service, demonstrate their skills and show value. As the market flattens, stronger agents will enjoy greater success. To differentiate themselves from competitors, agents should focus on taking a proactive approach to sales, concentrating on working their databases more arduously and becoming less reliant on web portals.
Despite the fact that lenders have raised interest rates and become more prudent, now is still a great time to be in the property game. My advice for agents is to remain calm, maintain focus and make delivering exemplary service a priority.