Just as the Baby Boomer Generation is beginning to retire and create a new real estate market in ‘sea change’ and ‘tree change’ properties, the youngest emerging generation is beginning to make its impression on the real estate marketplace as investors and as agents. Generation Y – those born between 1980 and 1994 – are entering the workforce and stamping their personality all over it.  In real estate terms, we will see a growing number of these ‘new gen’ agents starting to influence how properties are marketed and help shape the real estate industry from the inside.   Generation Y represents 20.5% (just over 4M) of the total Australian population.  It is estimated that this generation already represents 8% of the total number of real estate agents in
Australia and when you consider that the youngest Generation Y is only 13 years old and the oldest is 27, their influence is only just beginning. Generation Y is on target to dominate in the next 2 decades.  So how will they influence the real estate industry?  To fully appreciate that, we have to look at the common traits of a Generation Y person.  The Gen Y’s are consumed by entertainment, savvy about technology, ambitious, hardworking, accomplished multi-taskers, highly transitional and reward driven.  Basically, they want more and they want it faster.  As you might expect, they develop a strong need for independence at an early age which has been driven by the fact that many come from single parent families.They are also shaping up as the highest achievers of any generation we’ve seen so far and represent enormous market potential for those in the housing, retail and entertainment development industry who understand their needs and desires. They love to shop, they are accustomed to abundance, and they tend to buy disposable items rather than those that can be repaired. Given their purchasing power and willingness to spend, Generation Y will heavily influence our marketplace for the next 20 years. The young agents from this generation who are already working in real estate can be found predominantly in the capital city markets.  Unlike their older counterparts they are willing to develop ‘a business within a business’ with their own assistants and PA’s.   Smart agents understand that to market to this generation, they must be flexible, fast, accurate, knowledgeable and be prepared to provide services the client cares about and make it fun.The housing needs of Generation Y are proving to be far different than those of their parents. Unlike many baby boomers, who tended to marry and have children in their 20’s, Gen Y’s are indicating they want to postpone marriage and parenthood far longer than their parents. Because their social interaction centers on night life, rather than entertaining at home, they are satisfied with small housing units or houses on small easy care blocks of land.

For those who do choose to buy property, glass, metal, aluminum, bold colors, lofts, lots of light, and open floor plans are very popular.   High-speed Internet access is critical. This group prefers living close to work, recreation, shopping and entertainment, and places a high value on living in areas they perceive as offering a good quality of life. Because they are environmentally conscious, they will seek out ‘environmentally friendly’ developers.  

Since Generation Y’s are the most sophisticated media generation ever, creating their own web sites and making their own CDs and DVDs, real estate agents need to ensure they’re proficient in the use of developing technologies.

They are called Generation Y but they could be referred to as Internet Empowered Consumers (IEC), who don’t want to be “sold”.

Generation Y are tomorrow’s home buyers.  Real estate professionals who realise this and do not rely on the same communication channels used to reach their parents will be the winners. 

Tips on reaching IEC’s or Generation WISE

Let them have control.  They want control and have the power to get it.  The internet has not only allowed the tech savvy to gather a mountain of information without the salesperson but it has allowed them to do it with anonymity.

Respect their privacy.  Explain that their privacy will be respected and then do nothing to abuse this promise.

Give them some space. 19 out of 20 online enquires are ‘soft’ and for information only.  Be prepared to nurture the relationship for long term results.  

Email Kevin at kevin@realestatetalk.com.au

www.realestatetalk.com.au

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Last week the Inman real estate conference was held in the
USA.    Inman is at the cutting edge of world wide real estate trends and this year the conference identified a turning point in the relationship between the real estate agent and the buyer and seller. Stephen Sharry, Raine & Horne Queensland CEO, attended the conference and has already begun briefing his agents in Queensland about the “Ignorance Premium”. In the past agents were the gatekeepers of the information and buyers and sellers had to rely on the information supplied to them by the agent so as to make decisions about the value of property they wanted to buy or sell.  This information included recent sale prices, buyer and seller activity, market movement, days on market (the amount of time it takes to sell a property), competition levels and even the description of properties both on the market and those that had been sold.  Now with the advent of various databases that can be accessed through the purchase of individual property and suburb reports, pay by the minute access and even full subscription that was once the exclusive domain of the agent, buyers and sellers can now be more educated about the market than their agent.  Smart agents realise this dynamic shift has already happened and have moved from being the gatekeeper of the information with all the power to being the facilitator of the transaction and have developed strong negotiating skills so as to be able to offer a tangible benefit to the buyer and/or the seller and not rely on the power provided by better access to the facts/information.  The “Ignorance Premium” can best be described as the amount of leverage gained through the knowledge or information gap between the agent and the buyer/seller.  The gap has emerged because of the access buyers and sellers now have to information and the focus they have on a small market segment (price range or location) compared to an agents need to be knowledgeable over a much wider price/area base.  The better agents who are able to offer a service that is based on good follow up, outstanding service and a genuine desire to help people achieve their goals through property, will be the ones to survive the information revolution and become the next generation agent. Kevin Turnerwww.realestatetalk.com.aukevin@realestatetalk.com.au

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I recently had an email from Terry and Di who own a lovely property outside
Brisbane.  They want to sell but in their own words …….. they “do not have faith in the local real estate agents who mainly deal with town residential houses or farming properties.  Our property best suits Brisbane, Melbourne or Sydney families looking for a treechange or nice weekender”.  

I believe there is a great danger in moving too far away from ‘local agents’ in a belief that agents in major centers will be able to achieve a better result.  There are some exceptions and some questions you should ask your agent.    If indeed you believe your buyer will come from an area outside where you live, then it is likely your buyer will see the property on the internet so it is important to check that the agent you are using is internet savvy.    Here are some guidelines and questions to help you.  1.   Ask the agents to detail their internet strategy for marketing your property.  This is likely how you will find your ‘southern buyer’.  If the agent is not comfortable with internet marketing, they should not be employed by you.2.   Ask where they think the buyer will come from and how they will reach that person.

3.   Make sure that the agent is using the main internet sites to market your property.  These are www.realestate.com.au, www.domain.com.au and at a major franchise site.

4.   Ensure your copy is targeted at the buyer not at what makes you feel good about the property.   Copy for the internet or press should not be written to make the seller feel good but to attract a buyer.  It is all about features and benefits.

5.   The internet copy should be supported with good quality photographs – and plenty of them – up to 20.  Pay a little extra to have the photos taken professionally.  A good photo is worth 1,000 words but a poor photo is best in the bin – it could turn the buyer away.

6.   Try ‘on line marketing’ for the first 2 weeks of listing to see if you can attract a southern buyer.  Most internet sites have buyers waiting in specific categories and price ranges and they can be reached economically with email brochures.

7.   The most important point you need to know is how the agent will handle enquiry from the internet, via email.  I am alarmed at how many agents still do not understand the importance of this type of enquiry.  We know that 2 out of every 3 email property enquiries will not be answered and 75% of agents will not answer emails in under 24 hours. 

Don’t rule out local agents but make sure they understand how you want your property marketed. 

Kevin Turner - kevin@realestatetalk.com.au 0403 043 100

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I don’t want to make the issue of an interest rate rise this week a political one - nor do I want to make any kind of political statement.   Instead I would like to challenge you to look at the situation in a rational way and stop trying to blame any ‘one off’ movement in rates on any particular policy or political party activity. Instead …… take a close, hard look in the mirror and ask yourself some questions…. Have you been as prudent with your spending in the last few years as you should have been or are you caught up in the belief that this is the lucky country?   Have you been willing to accept responsibility for your actions in terms of household budgeting? Have you shown restraint in your purchasers and fully considered the difference between need and want?   Have you developed a household budget and made savings a priority? The economy is all about us.  Sure governments and the Reserve Bank can influence the market but if we, as consumers, do not accept some responsibility for our own activities and ignore the factors such as household spending and personal saving, both of which have a strong impact on the economy, then we are asking for trouble. 

We need to accept responsibility for our own actions. Credit card spending in the last 3 years rose by 50% ($20b in 2004 to $30b in 2007).  That wasn’t the government – that was us. The size of an average home has risen by 15% in the last 2 years and more than doubled in the last 30 years while the size of the family it houses has halved 27% of homes now have a large screen TV.  Large screen ownership grew by over 50% in 2006 and up to 20% of people say they will buy one in the next year.   82% of family homes in Brisbane have 2 or more cars with 82 cars for every 100 people. There are many more examples of how we are ‘trying to keep up with the Jones’s’ – not living within our means and wanting it all now. This is a good opportunity to stop blaming and start taking responsibility. The Reserve Bank increases its rates for one reason – to slow the economy.  It is a balancing act.  Look upon the increase this week as a health warning.  Just as someone who has a mild heart attack, if they are smart, will look on it as a warning about the need to change lifestyle - we have just been given ANOTHER health warning!  It is time to slow down!  

There is no doubt that we are in for a rough ride no matter who wins the election later in the year.  Maybe we will get another rate rise before Christmas – who knows.   Some people will be able to weather the storm better than others but I guarantee you this…… Those who take stock now and do something about their own situation, will be the smart ones and will be doing everyone a favour.Kevin Turner - kevin@realestatetalk.com.au

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