I’d have to say that in my 25 years in the real estate business I can’t remember a change in the market as sudden as the one we are currently experiencing – unless you live in Fiji or South Australia! Those two markets are still performing very, very well. But for the rest of us, it’s pretty challenging.
I think there are a few things that are important to keep in mind though -
- We have had a great market for quite some time and I think because it was so strong, the sales numbers at such record levels, the drop seems all the further when in fact it’s not as bad as at other times in the past.
- There are still some very good indicators that will help with recovery – interest rates are still relatively low and forecast to fall over the next 6 months, unemployment is low so job security is generally good, we are in the middle of a resources boom and with China and India on our doorstep this will continue for some time, adding millions and millions of $ to our economy.
- The quiet period that naturally occurs as a market slows and moves from a sellers to a buyers is a relatively short one as there are still sellers that simply must sell and buyers that while they may take a little longer to make a decision, still have to buy, so price expectations adjust and things move on. We are seeing that start to occur. Our own sales figures were up nearly 10% in June over May, so if this continues we may well have at least seen the worst of it.
- The true professionals with the tools, skills, persistance and discipline will continue to do well, while many that got into the industry during the boom and aren’t committed or professional, will leave – so there may be fewer sales but there will also be fewer consultants and offices. We have this regular clean out, and it’s good for the future growth of our industry – a bit like pruning a tree – bit of a shock to start, but ultimately grows back stronger and more healthy.
- A falling share market inevitably drives many investors back into property, especially if they perceive that property prices have fallen and there are ‘good buys’ around.
- The market is cyclic so it will come back and each day that passes is a day closer to that next upward cycle!
There are clearly significant challenges currently but in the end there is still a market, sales are still being made and the only thing we can control is how we approach it.
