I’ve worked in real estate for over twenty years and seen a lot of changes.
When I started, newspaper advertising was still dominant, the shop front display in the agency was a vital piece of marketing, and none of us had smartphones.
Thanks to legislation, training, and technology, there’s been a huge amount of change and improvements to the way agents do their jobs, and these have flowed onto the ways buyers and sellers transact. But there are still some things that remain issues in the industry.
This week we take a look behind the scenes at what I think are the biggest issues in real estate right now.
Honesty and transparency
According to surveys, real estate agents are consistently ranked among the least ethical and honest professions. In fact, less than 1 in 10 people believe real estate agents are trustworthy. Talkback radio presenters, members of parliament and lawyers all rank more highly than we do.
Rather than feeling sorry for us, I tend to agree that honesty, and its close companion, transparency, is a big and ongoing issue in our industry. Maybe it’s due to the competitive nature of winning listings, that some agents will simply say whatever it takes to get a sale.
In reality, it can be far more difficult for an agent to tell buyers and sellers the truth. Particularly if it relates to price expectations around market value that may be higher than a buyer wants to pay, or lower than a vendor is willing to accept.
In a recent talk, John McGrath spoke about how clients are looking for agents who are “more human” and authentic, but who also show “radical integrity”. He argued that managing expectations – for vendors and buyers – is a vital skill that agents need to learn. He also argued that you can do this using data, and by engaging buyers and sellers in the process. I couldn’t agree more, and hope to see more changes in the way agents conduct business in response to this.
The changing way we want to live
Beyond the industry – but affecting the industry greatly – is the changing way we want to live. In our area, we’re truly lucky that there are a wide variety of amazing properties, with huge lifestyle appeal.
But the one thing we don’t have enough of are properties for downsizers across the eastern suburbs. We currently have huge demand from downsizers for the very few properties that really appeal to downsizers.
Many downsizers have come from large homes and are seeking more than just a standard apartment. They are looking for a generous apartment or low maintenance lock-up-and-leave house. Level access, or lift access is a priority, so are several bedrooms, and flexible living space. Add in proximity to shops, services and amenities, and an outdoor entertainment terrace or courtyard. These types of properties are rare, so when they do come up for sale buyers compete head-to-head and this puts upward pressure on prices.
There’s little doubt that Sydney is a tough market to be a first home buyer. In 2021, demand is outstripping supply and FOMO is driving the market in many areas – including our own.
This is contributing to big price rises. While a helping hand exists in the form of the First Home Owners Grant and State Government stamp duty concessions, it’s still difficult for first home buyers to get on the property ladder.
The latest Federal Budget attempted to address this by extending the First Home Loan Deposit Scheme and introducing the Family Home Guarantee for single parents. But it’s unlikely they will help first home buyers get into many markets in Sydney’s East where the median sits well above the price caps for these schemes. First home buyers will be pushed out to areas where their money can go further than it does in suburbs like Potts Point, where the median price for a two-bedroom unit is currently $1.3 million according to realestate.com.au.
And, if you think the problem hasn’t become worse over the last 20 years, think again. Despite record low-interest rates, the average monthly cost of servicing a home loan in Sydney has almost doubled, even allowing for inflation, from $2,409.88 in 2000 to $4,224.75 in 2020.
If you want to make Sydney’s eastern suburbs your home, contact my team for advice.