As one of the judges of the Realestate.com.au agent of the year award for 2008, I attended the presentation function in Melbourne last night. The REA Manager of emerging Business, Shaun DiGregorio, introduced the winners of each state and outlined why they won the award.  The final Agent of The Year  winner was Martin Ollard from Black & Young Real Estate Burleigh Heads in Queensland. Martin and his wife Debra  were very pleased with the prize of a $10,000 trip to the National Associaton of Realtors convention in Orlando Florida in November of this year.

What was interesting about this years award (the third year of the award), was the increasing professionalism of the winners. Martin was nominated by a client who was looking for a property on the Gold Coast with specific requirements. Martin went out and knocked on every door in the area required and could not find a property that totally matched the clients needs.  He then reviewed what was for sale, found a property with a good location and then developed a strategy to demolish and build exactly to the clients specifications.  This included preliminary estimates from a builder.  The clients loved the proposal and bought the property.  This does show hard working professionalism to fulfill the needs of the buyer and the seller.

This award has increased in popularity each year and is unique in that the customer has to take the time to register and write the details.  Many agents actively solicit responses from their customers for this competition, however for the customer to take the time is a whole other issue. Martin should now leverage heavily off this award, as should any award winner, to gain improved profile.  Well done Martin.

Shaun DiGregorio (REA) Martin Ollard (REA agent of the year)

State Nominees REA agent of the year award.

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The Federal Government has kept its election promises and rewarded the working families that largely delivered them out of the wilderness and into government. The centrepiece of the budget, tax cuts, was set last year as part of the election. Wheres it can be said that the budget overall is an “honest effort” on the part of Swan, it probably misses a huge opportunity to be tougher however Swan has delivered a real “crowd pleaser” and used the surplus politically strategically. Some of the income testing add-backs in FBT, negative gearing and salary sacrifices which come into effect in 2009 and will have little impact on the investment property market.  The budget commits $2.2 billion to help home buyers and property investors in some way.

Promises to tackle the housing affordability crisis have been partly addressed. The effective increase in income to a family on a combined family of $70,000, with children, will be around 4%.  This will improve one component of the affordability index for this market segment.

The new National Rental Affordability Scheme will receive $623 million, which the government estimates will create up to 50,000 new rental properties. This is an ambitious statement which will see the accountants and investment advisors looking at the detail and working their excel spreadsheets until late in the night to come up with a financial model for investors that may assist to attract some back into the market.

In an attempt to lower the cost of building new homes, $512 million has been allocated over five years for the Housing Affordability Fund. Depending on how, when and where this is directed it may help to reduce housing costs which are increasing with inflation and impacted on by the labour shortage. 

A “First Home Saver Accounts” will be established with an allocation of $1.2 billion over four years to assist first home buyers. This is a real winner as it will assist with a culture change particularly amongst the young who will be educated to save rather than spend.

There will also be funding of $100 million over the next four years for the construction of 600 new homes for homeless people across the nation.

On a personal note with Real Estate professionals, the increase in luxury vehicle tax will certainly boost the second hand luxury car market and question carefully which new car to buy next.

It is difficult to see how the budget is going to control inflation over the medium term.  The world is paying Australia a windfall for our coal and iron ore, largely by China, which will see an estimated additional $60 billion received. This has also been recognised with Queensland gaining an increase in export infrastructure funding. The receipt of this  will impact on spending and the labour market.  Comments that unemployment will increase are also hard to understand as everything points to the opposite and indeed inflation generating pressure on the labour market may result in further increases in wages. 

Overall the budget has exceeded expectations with a balance of benefits and spending cuts that will have a short-term impact on inflation which should keep interest rate rises at bay for a period.  Assistance for home buyers has been minimal however at least recognised and when combined with tax cuts should assist part of the community to enter the housing market. The main issue is that the budget will produce some optimism and in these uncertain times a positive outlook along with good fiscal and monetary policy management is what is needed. 

The four budget papers include an enormous amount of detail. I will provide further comment after it is assessed further.

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At the Raine & Horne Queensland Chairmans Awards function at the Gold Coast International Hotel last night, Tony Atkinson announced his retirement from the role as Chairman of Raine & Horne Queensland.  In attendance with Tony was wife Cynthia and 2oo guests. 

Long time franchisee, Dennis Wey, made the announcement and spoke about Tonys commitment to people and the industry. Tony announced that Raine & Horne Holdings had purchased the master franchise and that Angus Raine, great grandson of the founder of Raine & Horne, will take over the Chairmans role.  Queensland CEO Stephen Sharry will continue in his role.

Tony Atkinson has had over 41 years in the industry, 26 years with Raine & Horne, the brand he introduced and established into Queensland.  The opening function speech 26 years ago was given by Frank Moore, now Sir Frank Moore.  Sir Frank was in Hong Kong however recorded a video message for the group.  He outlined how Tonys vision for the Expo site helped get the project across the line and subsequently Expo was held establishing Brisbane on the world stage.

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Google just released the SDK for its new mobile phone platform, Android. Here’s a short video that demonstrates some of the features:

Joel Burslem from Inman commented: “Still looks a little rough around the edges - the UI feels a little unpolished; but this thing definitely looks promising for real estate technology developers. I especially liked the integration with Google Maps and StreetView. One could envision a mobile real estate search tool that could pull up listings, display them on a map and give you a virtual preview of the neighborhood, and then give you instant directions on how to get there.”

One thing’s for sure, with the iPhone SDK coming in February as well, the next frontier for Real Estate 2.0 is surely going to be mobile.

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In a recent post Peter Ricci included the following graphic comparison of the top real estate portals.  The figures come out of Nielsens and only compare the top sites however they give a very good comparison of the major portals and their position in each state.

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OVERSEAS INVESTORS

Interesting article by Tony Koch in the Courier Mail on Thursday stating that over $1b in Queensland property has been purchased by Overseas Investors in the last year.

Buyers from Britain led the purchase pack last year, spending $252 million, followed by New Zealand ($141.9 million), Japan ($86.1 million), The Netherlands ($75.5 million) and the US ($54.8million).

Indicates that the Realestate.com.au drive internationally will help to market Australian property abroad as will the new Raine & Horne offices in the UK and Dubai.

http://www.news.com.au/business/story/0,23636,22567106-37037,00.html

INTEREST RATES BLUES

This week presented a bit of a mixed bag with the NAB monthly business survey showing conditions slipped again with the worst result since February 2007. The results could be based on increasing inflation, some global turbulence, tightening wages market and the upcoming election. Pundits are placing the liklehood of an interest rate increase by the end of 2007 at 45%.

theage.com.au/news/business/rate-rise-market-woes-batter-conditions/ 2007/10/09/1191695908896.html

ADELAIDE UP, SOUTH AUSTRALIA DOWN

Where Adelaide has achieved an 11.5% increase, overall South Australia have recorded a slump of 3% in the quarterly median house price and the Real Estate Institute of South Australia has blamed drought conditions as contributing.

The Adelaide increase of 11.5% is nearly double the 6% increase of the previous year.

http://www.news.com.au/adelaidenow/story/0,22606,22538552-5006301,00.html

http://abc.net.au/news/stories/2007/10/10/2055398.htm?section=business

CONSUMERS OWN WORST ENEMY

For the 11th time in the past year consumer spending increased in August. Household goods showed consumers were buying more electrical goods like DVD players, plasma screen televisions and gaming machines.

Food spending jumped by one per cent in August, on a seasonally-adjusted basis, while spending on household goods was up by 2.4 per cent. But department store sales were down by 4.2 per cent.

If both property owners and those that aspire to own property do not curb spending and start saving, inflation will increase, interest rates will be increased and the dream of property ownership will move further away.

theage.com.au/news/Business/Consumers-spend-more-despite-rate-rise/ 2007/10/03/1191091164490.html

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Discounters out….. 

United States real estate discounter Foxtons’, a subsidiary of the UK based firm of the same name, is facing bankruptcy and lawsuits of over US$40m. The demise should remind industry professionals that there is no replacement for professionalism and customer service. In a market where Real Estate sales ranks have increased and many homes sell by simply listing them on the internet and putting up a sign, discounters perpetuate the proposition that there is little value a Real Estate professional can bring to a transaction, thus the less they should be paid.

Competent professionals cannot work for peanuts; Real Estate Agencies need adequate revenues to stay in business. When you give away your commission you also give away your ability to get the property sold at the best possible price in all but the easiest of markets.

The Bankruptcy filing on Friday evening came a little more than a week after the company announced it couldn’t survive and laid off 350 of its 380 employees.

The announcement by Foxtons created waves in the US real estate market. The company made its name by taking direct aim at traditional real estate agencies by offering commissions that were lower than what competitors charged. Once the housing market slowed, though, the company’s losses mounted.

Foxtons had 4,400 listings in New Jersey and New York. The company wants to sell the listings, along with customer databases and any equipment, furniture and vehicles that aren’t leased. It believes those assets can generate $2.6 million, according to court documents.

This should be a wake up call for Australian Real Estate professionals. The service that is provided by the Real Estate industry has long been underestimated and undervalued by the general community.  The process of listing, marketing and negotiating the sale of a property either by private treaty or auction, is a complex and sensitive process that requires skill and knowledge.  Add to this the raft of legislative control, introduced in the name of consumer protection, that only adds to the complexity of the process and not the outcome, and you have a very difficult space in which to work.

And finally, Discounters not only undervalue the industry and themselves, they also undervalue their clients.  If a Real Estate agent cannot negotiate their own commission, how can they possibly negotiate the highest price for their clients?

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Yesterday’s mail delivery to Raine & Horne Queensland’s head office at Nudgee Road Hendra included a surprise envelope.  It was addressed to ;

Any Estate Agents
Anywhere in Australia
Queensland preferred
Australia

Australia Post staff hand wrote in red;
“Try Raine & Horne
8, 469 Nudgee Rd
Hendra Q 4011″

Australia Post got it right…………………………………………..

The letter, from England, requests a bungalow not too close to schools and clubs but in a village with a doctor and a pub.  What more could you ask for? 

I guess the word has got our that Raine & Horne will find the perfect property for you regardless of whether it is residential, commercial or rural, in Brisbane, on the coast or in the bush…….. we will refer the writer to www.rhq.com.au as well.

Good one…..

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Another week another real estate web site.  This week  www.propertytoretire.com.au advised that they are launching their website aimed at Baby Boomers.  The number of real estate sales and rental website portals is becoming confusing and dysfunctional.  Smaller specialist portals cannot be profitable as most do not have a viable business model.  Even the web 2.0 US sites such as Zillow.com do not know how they are going to make a profit.

The new LJ Hooker site was launched last week with a very neat property compare function although the rest is a bit clunky particularly the mapping.

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One of the greatest fallacies perpetrated throughout the housing affordability debate is that the release of land, house/land packages and units should be aimed at first home buyers.  The release of land/houses/units is about balancing the supply demand imbalance holistically for everyone.  If we have balance between supply and demand then prices will stabilise and affordability will be a cyclical issue and not structural. continue reading »

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