The ebb and flow of the real estate industry in Australia has been well-documented over the past year, from ongoing discussions around the state of the market to the Royal Commission into Australia’s banking sector.
However, it seems pertinent to reflect on the impact we have seen across the industry when it comes to the inevitable churn rate that occurs in each property cycle.
Survival of the fittest seems the most apt phrase to use when we look at the hit many agencies have taken during this market lull, with many currently consolidating their losses. Now, as we begin to see some small market improvements, it is imperative we look at how we got here, and what we can do to prepare for the next time we have a dip in the property cycle.
Where are we now?
Speaking with agents who have been around long enough to witness and experience numerous downturns, the constant feedback is that the end of 2018 was the worst they had seen.
However, 2019 opened up slightly more fluid, giving some hope to those in the know. Yet others may tell you that the federal election and the continued fallout from the Royal Commission have kept consumer confidence low.
Looking at the goal posts and measures of success, agencies need to ensure they’re using the current environment as a marker for realistic results. When the change finally happens, the benefits will become exponential for a while. It’s hard to believe we are already talking about 2020, but if the New Year ticks over and the market is in better shape than it is now, it’s a collective win for the industry.
The agency churn rate
As in most sales environments, the real estate industry is in a constant state of churn.
Historically, most cycles last three to four years, and during the correction phase, we often see this scare a few out of the industry. The growth years equally have an opposite effect, attracting large numbers to real estate.
For many, this market is a make or break. Some of the best agents cut their teeth, and we see who is made for real estate, while others may be a deer in the headlights.
For those who demonstrate the right behaviour, there is no reason to become one of the casualties. From a business perspective, a company with sufficient structure should never really have major casualties. If they do, you could say there were inefficiencies in the first place.
Regardless of market temperature, successful businesses are continually finding what could be inefficiencies and minimising or halting their potential impact, whether this is in the form of systems, technology, process or people.
“It’s hard to believe we are already talking about 2020, but if the New Year ticks over and the market is in better shape than it is now, it’s a collective win for the industry”
Agent survival 101
Client-centric behaviour is the top trait of any successful agent. It is as simple as that. Those agents who place the client relationship at the centre of their world and have a tangible service-based value proposition will be the ones who can build their business in any market.
Being truthful is paramount. During market highs agents can become glorified order takers. However, it is the market lulls we’re currently experiencing that are a true test.
To survive this test all agents, irrespective of age, need the education to improve, particularly for those entering the industry for the first time. History has shown, however, that unfortunately the barriers to enter real estate in Australia are alarmingly low. This typically means the calibre of people coming into the industry is extremely varied.
Creating change in an industry which has typically resisted change is a difficult task. However, there is no better time than now to lift the bar.
If we disrupt ourselves, especially now, we will see drastic leaps in efficiency, which will only serve to benefit consumers, agents, and inevitably reduce the impact of the industry’s churn rate