Thursday, February 25, 2016

Bold ‘bubble bursting’ claims circulate again nationally 
– should we be worried?

This week bold claims and stories have been making headlines once again in the media about the real estate market. We’re hearing statements such as: ‘Australian homes soon going to be worth 30 per cent or 50 per cent less than they are today’ and ‘The bubble is going to burst’.

Many of these stories are based around investors who have purchased in areas where there has been huge ‘artificial’ growth due to a specific event or opportunity. For example, if you purchase a property in a mining town and the mine shuts down, property demand disappears and it can leave property owners in a very vulnerable position.

What’s important is to focus on our local market. While Sydney and Melbourne have been experiencing huge growth in recent years, Adelaide has been consistent with smaller, moderate growth. This is placing us as one of the most attractive property markets in Australia right now. This week Adelaide topped national results again, showing the highest capital city home value changes for the past week and month.

One of the best indicators of consumer confidence in real estate are auction clearance rates. These figures give us an understanding of buyer and seller sentiment as there are no conditions or cooling off period allowed. Buyers have already received financial approval and are ready to purchase at the fall of the hammer.

Low auction clearance rates usually indicate a buyer’s market, while high clearance rates indicate it is a seller’s market, or a hot market.

Adelaide’s auction clearance rate remains extremely strong as we head further into 2016. There were 109 auctions scheduled last weekend and as a city we saw a clearance rate of 75 per cent. Compared to the same time last year, (according to RP Data), the Adelaide clearance rate was sitting at 53.3 per cent, showing us that there is significantly more confidence in our market.

From our own experience on the ground, we have seen some exceptional results at auction. Over the last four weeks, Team Toop had 49 auctions and we experienced an average clearance rate of 89.32 per cent. One weekend achieved a 100 per cent strike rate with all eight properties selling under the hammer!

Our team has been achieving these results across all markets and price ranges. From the top end, with character homes in Toorak Gardens, Joslin and Myrtle Bank to renovator delights in Stepney and Marden to key investment opportunities in Norwood, Parkside and Hilton.

Over the last four weeks our ToopVault buyer bank has increased by 300 members with consistently strong numbers of registrations daily, as buyers want to find out about property before the public market.

So will the bubble burst?

No one knows exactly what the future holds but right now our local market is capturing national attention from buyers and investors. With the right sale strategies some fantastic results for sellers are being achieved!

Wednesday, February 17, 2016

Change is in the air

We have always believed that property investing is just the same as being in business. Property investors receive rental income and incur costs such as borrowing expenses, maintenance, insurance etc. 1.3 million investors across the country are utilising the ability to offset losses incurred from their property portfolio against their tax liability. This has been common practice for many decades, except for a short period when former Treasurer, Paul Keating attempted to remove it 30 years ago.

The Federal Labor Party's proposed changes have firmly placed negative gearing back in the spotlight. The proposal is to remove negative gearing on existing houses, as well as to reduce the capital gains tax discount from 50 per cent to 25 per cent. Proposed changes would apply from July 2017 but not retrospectively and the tax concessions will still be available for newly built homes.

What do we think the impact will be here in SA? 

Given South Australia has a 'calmer' property market compared to the eastern states, we don't foresee a drastic drop in housing prices. Many landlords may hold onto their investment properties to ensure they can take advantage of the 'grandfathered' benefits. 

With a lot more pressure for properties to achieve a positive cash flow, there may be less incentive for property investors to enter the market. The competition we are currently seeing in popular investment areas is likely to reduce and as a result, housing price growth may slow.

With that in mind, we anticipate a change in the buyer profile in the low to mid bracket of the market.

What about the rental market? At a broad level, we don't anticipate significant movements in rental prices.

The biggest impact would likely occur in the popular 'hot spots' for tenants. If investors are not as active, the supply of new investment properties coming onto the rental market will reduce. As tenants struggle to secure properties, we expect to see rental increases in these pockets in the shorter term. This is until tenants become home owners themselves which would assist in neutralising this effect. 

So what properties might investors look to? 

Newly constructed homes as well as cash flow positive homes. We expect to see a shift in investors' strategies to focus on achieving stronger yields (for example units or apartments in inner city locations).

What do we expect to see between now and then? There is the potential to see a rush of investors looking to get into the market between now and 1 July 2017, purchasing those established homes in the popular tenant hot spots. 

Change is in the air and it might be enough to make many investors bite the bullet and act sooner rather than later. 

Suzannah Toop

Monday, February 15, 2016

Innovation & imitation... The difference is as clear as black & white

Now I wouldn't be my father's daughter if I didn't shake things up and speak my mind on topics that as a company we are so passionate about. One of the cornerstones of our business is innovation. We love how technology and new ideas can create huge value to our clients and business.

Innovation seems to be the word of the month of late with 'new' products being launched left right and centre... and while new to some of our competitors, in reality these 'innovations' are very similar to services we have provided for years. Although somewhat flattering, it can also be frustrating when some real estate businesses don't truly understand the 'why' behind the idea and it is customers that are missing out because the original idea has been misunderstood or miscommunicated along the way.

Emulation and looking at other industries and learning from them is hugely beneficial but whether it is innovation or emulation, I believe it is no longer good enough to offer something new or to be different for the sake of marketing or PR spin. Innovation needs to create a significant positive change and ultimately, provide a valuable outcome to your client...otherwise what's the point?

Right now our team at Toop&Toop are experimenting with VR technology, 3D printing and some other very cool technologies. We are super excited about this space and are evaluating and forecasting how people will actually use these products and where this technology can truly provide value to our customers in real estate, while focusing on where we can use innovation to create value for clients now!

Over the last six months, we have introduced and enhanced a huge amount of services to our clients. Last weekend, we launched our new format Toop.TV! Toop.TV was an innovation we created seven years ago when videos were only just emerging.

Today, people want to watch up-to-date content at their convenience. Our new format is punchy, accessible and captures all of the action on the biggest day of the week for Real Estate. We have been overwhelmed with the response from buyers and property enthusiasts - this pilot episode achieved 3,191 views in three days from Facebook alone!!

With statistics like these, I'm sure our competitors will follow, but regardless of how quickly the pace of imitation has become, at TeamToop we are still just as passionate as ever about innovation and our service to clients!

We have a fantastic team culture of constantly striving to find ways to do things better. All we ask is for the industry to remember how important the 'why' is... Why it is an idea worth doing or adopting, why it is valuable to your client and why it will make their lives better when selling, buying, renting or managing their property right now.

Thursday, February 04, 2016

Keeping the personal touch in a world of tech

Research tells us that we now interact with more people in one year than our grandparents would have in their entire lifetime. This is a staggering statistic - and technology is the major cause! Social media is becoming an integral part of our lives and we know more about friends, family and even strangers, than we have ever known before. So it seems at odds that across numerous business sectors, many consumers feel like they are receiving an impersonal service and that they are required to compromise for the sake of technology.

Backed by our 30 year history, striving to improve our customer experience is embedded in how we think at Toop&Toop. We believe that a critical part of achieving this is to be continually learning and hearing what's happening across the country and globe, and then benchmarking our performance, not only in our market, but Australia wide. There was no better example of this than earlier in the week, when 14 of our team attended the Australasian Real Estate Results Awards and national conference in Sydney, attended by 400 independent real estate agents and principals.

Sharing ideas and discussing new innovations were highlights topped off with our very own Tim Thredgold being awarded the Top South Australian Sales Person of the year on the night. Tim was recognised for his performance in the top end of the market and the exceptional level of service he provides to his clients!

Tim and his team are leading the way, showing how an agent can now use the benefits that technology (such as our ToopVault and Virtual Agent system) can provide, without compromising the 'human' element to real estate. We are in a people industry and we understand that people want to deal with people.

Looking to the future of our industry, we feel this balance is absolutely key. We love to innovate and think of new ways to do things, but we believe this should sit behind the scenes to allow more time to be available to our customers.

As a team we will continue to seek out opportunities to learn, benchmark and see  how we can further improve what we offer to our customers. We are very proud of Tim and his team and their ability to embrace technology to deliver great customer service with the personal touch. It's a perfect balance that we will always strive for without compromise.

Suzannah Toop