Jackson+Rowe has been accepted to an Australian-Wide Referral Network you probably haven’t heard of, Real Estate Results Network.
The membership is made up solely of independent real estate agencies. The quality of the members is borne out by the fact that the sales teams in these agencies have the highest real estate sales productivity as compared to all other groups including the large real estate franchises, in Australia.
One of the benefits of being a member is the quality and detail of the market information the members pass on to the group. The consistent feedback we are getting is that sales prices in most areas are now back to 2015 prices.
That may not mean much but in percentage terms, it’s a drop of about 20% and a lot more than what the newspapers are reporting.
The reason for the discrepancy between the statistics and our experience is because of differences in time. The sales figures being compiled by research companies and then reported in the press are based of sales settlements through to September. The sales actually took place, in the main, anywhere between April and July. By comparison, our estimates are based on what buyers are offering on property right now. I have to say the market in April and the market now are two very different environments.
The best forecaster of where the market is about to head is www.realestate.com.au. They measure the number of people looking at their website compared to the number of properties on the website.
It’s a classic measure of supply and demand.
As the average number of views per property falls, they know the number of properties that are going to be sold will fall. www.realestate.com.au picked the boom in Tasmanian’ property 6 months before it showed in the figures and well before it was recognised by mainstream property researchers. The information they are passing to us right now is demand for Sydney property is down 22% and so prices will fall further. Louis Christopher who runs SQM Research has just released his Housing Boom and Bust report for 2019.
It is great reading if you don’t mind his overall conclusion that real estate values will probably fall by 30% over the next three years from their peak of July 2017. We will then have 4 years of stagnation. Looking on the bright side, he suggests the Reserve Bank might lower interest rates to put a floor under the market. And speaking of looking on the bright side, Eric Idle wrote the song ‘Always look on the bright side of Life’ 40 years ago for the movie, ‘The Life of Brian’. It’s now the most popular song played at funerals in the UK. They love their irony and stoicism. Maybe that attitude will catch on with real estate agents and property owners in Sydney.
After all, even though we have dropped back in value, property is still more than 60% more expensive today as compared to 2008 values. That is well above inflation.
Merry Christmas & Keep Smiling!