Raine & Horne held a summit of its top residential offices and Franchisees at Tranquil Park Maleny in Queensland on Sunday and Monday the 26th and 27th of October. Sixteen Franchisees and five staff were in attendance and the debate and participation was lively and constructive.  The aim of the Summit was to discuss the current real estate property market in Queensland and to review the most important issues that face a real estate agent and Raine & Horne as a group.

Paul Newall, Raine & Horne Financial Services, gave a very good and uptodate presentation on the state of the economy and gave a very positive forecast for the medium term. Paul relied on a range of statistics and quoted the ANZ Bank Chief Economist heavily.  Paul also reviewed the current state of the banks and their lending policies at present including the failure rate of buyer loans where the real estate office do not have some control.  Paul cited six loans that have been retrieved in the last month and the over $300,000 that has been paid back to paricipating offices.

Kevin Turner helped to set the scene with a presentation on the various stages of a business and some strategies to wedge complacency and decline into that all important dynamic growth phase.

Day one saw the group identify all the challenges and areas that could be addressed.  The process was collective and ended up with 67 challenges on the list.  Over night that list was distilled into 50 issues.  Day two, Monday, saw the list readdressed and validated.  Further amalgamation or groupings occured and a final priortised list of around 20 challenges were addressed.  Of the list 5 top groups were identified and basic strategy developed.  The five issues were around Profile and marketing, Organisational and office culture, Website development, Management training and group buying power.

The general consensus was that the market will improve over the next twelve months and this is the time to gain market share.  The methods to do this should be in a special management training program as well the Executive Series at Marcoola on the 16th - 18th of November 2008 additionally greater emphasis on the value of the brand and compliance with the values of the group. Communication within the group was discussed as was the need to push the referral base potential of this market.  Robert Bevan will be the keynote speaker at Marcoola and will be addressing many benchmarks that relate to the current market and how to survive the worst.  It was agreed that even though there was light at the end of the tunnel, there is still a lot of tunnel to go. 

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Even though there are signs that the Australian property market is improving, there is starting to appear grossly conflicting forecasts from reasonably reputable sources.

Last night the ABC 7.30 report included an excellent review of the current thinking titled “House price uncertainty for Australians”. It is worth clicking on the link and select the story from the right hand window.

The Australian Property Monitors (APM) spokesperson stated that they anticipated a blanket fall in house prices across the nation of up to 10%. The Housing Industry Association (HIA) is forecasting that properties will remain flat for a period with no appreciable drop in prices.  The HIA estimate is based on the current housing demand of about 190,000 properties and the current building program of 150,000 houses/units under construction for the year.  This is a gap of 40,000 and is driving up rents in most markets with vacancy rates of less than 1% in some areas.  Additionally the current migrant intake is the largest for many years.

A representative for Reed Construction Data referred to the huge number of construction deferrals which are up 543% in the last quarter and heavily impacts on NSW and Qld.  Developers currently need 75% presale on unit developments before commencement, which is difficult in the current market.

Another issue that has not been taken into account within the current demographic and demand analysis is the number of vacant residential properties. The last census identified 830,000 vacant properties across Australia.  Michael Matusik is quoted and covers this in an article by Bob Wilson on hotspotting.  It will be interesting to see if Government can incentivate the owners of this significant resource to bring them onto the market for sale or rent. 

Paul Newall of Raine and Horne Financial Services (RHFS) has completed a review of the current market using information and forecast from the banks and lending institution.  Paul’s information points to a flat market for the next six months and then a gradual increase in sales volumes culminating in the mother of all property booms over the following three years.  Time will tell!!!

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On Monday night I attended the launch of the REIQ book “Deeds, Dreams and Dedication”.  The book was written by Gary McKay and celebrates the 90th anniversary of the REIQ. Gary is a well known author with many titles including “All Guts and Glory” and “Delta Four”.

The MC for the evening at Customs House was REIQ CEO Dan Molloy.  Chairman Peter McGrath introduced the Governor, Penny Wensley, who launched the book in fine style.  Her Excellency had obviously read the book and quoted from many of the anecdotes and the more humorous stories throughout the book.

The author spoke about the enjoyment he got from researching the REIQ and writing the many stories.  The REIQ Journals were a great source of information.  Many REIQ life members attended and it was good to catch up with early Raine & Horne colleagues including Ken Jackson.  Previous CEO Don McKenzie was there and received a thanks for commencing the project some years ago.

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PRESS RELEASE 14-10-2008 

The CEO of Raine & Horne Queensland Stephen Sharry said `We are delighted with the inclusion of further assistance for first home buyers in the federal governments financial strategy announced today, especially in light of the fact that the benefit will be available immediately”.

This announcement by the Government will further strengthen the market, with Queensland poised to gain even more, following the relief offered earlier this year with the increase in the stamp duty threshold to $500,000.
 The Queensland real estate property sales market has steadied somewhat in recent months and this is seen as further fuel to increase the popularity of the state as being one of Australia’s most affordable areas in which to buy property and raise a family” Mr Sharry added.
The review of the First Home Owners Grant will see the original benefit for established homes doubled from $7,000 to $14,000 and tripled if the buyer proceeds with a newly constructed home. Newly constructed properties must however meet certain energy efficiency and sustainability standards.

Mr Sharry concluded “Our group welcomes this move to help young families into a home and the lowering of interest rates this week also, will see those with a mortgage better placed to be able to service their repayments”
    

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