The biggest challenge the market faced in 2015 was stock. The stock shortage was in part driven by vendors not wanting to be out of the market. We saw vendors buying before they were prepared to sell their existing property, such was the belief that they [vendors] could sell their property fast and achieve a good result.
There was a view held that it was more risky to sell and cash yourself up to buy than it was to acquire a bridging loan and stay in the market.
From the agents’ perspective it became increasingly challenging to demonstrate value, when the media and other commentators were suggesting that anyone could sell property and achieve a great result in the market.
The market is returning to a more traditional footing, which I believe is a positive outcome. There has been market and regulatory turmoil during 2015 generated largely by the unusual market conditions. Not having to deal with the by-products of such a market will improve the competent agent’s value in the eyes of the vendor.
In 2016 agents will need to revisit their strategies to deal with the cooling market, particularly vendor expectations.We cannot look into the future without giving due respect to the threat posed by the disrupters. We saw the impact of airbnb and uber during 2015 on the industries that they attacked. We would be very naive indeed to think we will be exempt, so in my view this threat is not an if but a when.
There is of course no silver bullet to the disrupters’ threat. I do, however, firmly believe that substantially increasing the education and therefore the skills and competencies of the agent provides us with an initial, albeit a fragile, shield. Currently a student can enter the profession with as little as a few days training: I ask rhetorically what value can that person bring to the property transaction and how quickly can they be replaced by an App?
If interest rates remain stable and the market cools I think we will see a greater volume of transactions which agents will no doubt welcome. The wild card is of course interest rates., If there is a cut as some are predicting, then the cooling market we have seen during the later part of 2015 may very well get another kick despite the efforts of APRA to put pressure on the lending criteria of the banks.
There is however one thing that I am certain of: save any major external influence we will not see the market severely correct during 2016 as the “bubblelists” predict.