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The Agency uses downturn to focus on expansion initiatives

The Agency has reported its half-year results, with CEO Geoff Lucas saying the company has managed to keep the fall in transaction volumes to a minimum.

Mr Lucas said that despite the cooling property market The Agency had outperformed, managing to keep their decline in transactions to a fall of just 2 per cent (2847, down from 2910), compared to the 21.6 per cent fall in national transactions volume.

“We’ve been operating in an environment that’s difficult in terms of reduced sales volumes that the entire industry is aware of,” Mr Lucas said.

Despite this, The Agency had managed to increase its market share during the year.

“We’ve actually seen as significant growth in our market share during this period – in fact our market share has grown by 25 per cent,” he said.

The Agency reported a $950,000 loss for the first six months of the year, in line with cooling market conditions, Mr Lucas said.

Gross Commission Income was down 14 per cent to $45.7 million for the half-year, while The Agency has grown its number of agents to 412 over the past 12 months, according to the company’s results presentation.

Instead of any “knee-jerk reactions” to the softening market, The Agency’s executive team had used the period to start acting on its strategic initiatives, Mr Lucas said.

“We saw that, but we also saw an opportunity to continue to invest in the initiatives that we’ve set out in accordance with our strategic plan,” he said.

“And they’re all about gaining market share – we saw it actually as a good environment to continue to make those investments.”

Mr Lucas said that highlights of this strategy had included entering the ACT and Tasmanian markets and expanding its footprint in NSW, Queensland and WA.

Other key moves had included key appointments such as a new General Manager of Sales for Victoria and Tasmania, a new General Manager of Sales for Queensland, a new Head of Brand, a new Chief Marketing Officer and a new Chief Technical Officer.

He said the company remained committed to expanding its market share further (it currently sits at around 1.2 per cent).

“When the founders started this company, they had a midterm target getting to a critical mass of 600 agents,” he said.

“We’ve made pretty good progress toward that and currently have 412 agents, and so it’s a commitment to continue to grow our business and our market share.”

Mr Lucas is anticipating an increase in transaction volumes from July, pending the trajectory of the current interest rate rise cycle.

“It’s driven largely by interest rates, which are then largely driven by international forces,” he said.

“We’re expecting a maximum three interest rate increases each of 25 basis points over the next six months.

“Consumer sentiment currently is very low and so what we would expect to see in about three months, is consumers will see that the RBA is coming to the end of its interest rate increase cycle.

“Once people believe that the terminal rate is approaching, then they will start to have more confidence to transact.”

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Jack Needham

Jack Needham was a Digital Editor at Elite Agent in 2022 & 2023