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After doing pretty well on our 2015 predictions, we’re sticking our necks out again to declare what we think is in store for the real estate industry next year. All signs point towards a very different and more challenging property market in 2016; many agents will be rethinking their approach to marketing to adapt to the new market conditions. 

Portal Price Wars

After initially announcing it would hold prices until January 2016, REA recently declared that its price freeze would be extended until May 2016. That will temporarily please agents, many of whom are still smarting from the introduction of REA’s market-based pricing model in 2014. Both REA and Domain posted massive profits this year, so cue further frustration from agents if prices go up again, particularly if market conditions get tougher. 

International Buyer Exodus

A funny thing happened over the last couple of months; the tidal wave of international buyers who have proved so lucrative in Melbourne’s eastern suburbs quietly receded. It had become the norm in 2015 for auctions in many areas to be dominated by determined, cashed up Chinese investors. We believe that this will change dramatically in 2016, and those agencies who have relied on insatiable Chinese demand will need to rethink their strategies.  

Postal Price Push

Australia Post’s sales collapsed by over $200 million in 2015, and in response the national mail carrier has announced big price increases. From January 4, stamps will increase from 70 cents to $1 each, while the cost of discounted commercial bulk stamps will rise to 79.5 cents each. In addition, there will be extended delivery times to deal with. Agents doing database mailouts will need to factor in these added costs, as well as slower delivery turnarounds. Those who understand the value of direct mail will absorb the added cost or get much more strategic with how they use mailouts; weaker agencies will give up altogether, to their own detriment. 

Multi-Channel Magic

Multi-channel marketing will be the name of the game in 2016. It doesn’t feel like that long ago that many of our clients were gleefully telling us that print was dead – how times have changed! Between prestige magazines, premium brochures and clever direct mail pieces, top agents are rediscovering the magic of print, and understanding how it can be used alongside their digital marketing to generate appraisal opportunities and build brand awareness. Whether it’s a drop card that directs a potential vendor to a website to order a free book on property presentation, or an information-packed suburb report that points to a blog or email newsletter, agents are increasingly trying to ensure that their print and digital marketing pieces work effectively together. 

Buyer Success Strategies

With market conditions set to get tougher next year, strong buyer management and engagement strategies will separate the winners from the losers. Agencies will rediscover the value of buyers and the importance of going the extra mile to assist buyers in finding their perfect home. Those agencies who haven’t been developing and honing their approach over the last couple of years will find themselves playing catch up. 

Back-lit Boards in the Background

We were excited about back-lit boards in 2015, but they haven’t taken off the way that we and many others expected that they would. They’re not going away by any means, but we see these as a niche product with an appeal to particular vendors, while the majority will remain content with standard property boards. Problems like washed out colours, inability to use stickers and the extra cost have have dampened initial enthusiasm. 

Back to Basics

Many agencies will focus on getting back to basics next year. Assisting young, inexperienced agents to sell VPA, prospecting calls, strong communication with the database and a renewed focus on rentals departments will keep people busy.

Speaking of Property Management

Changing markets always generate renewed appreciation of the cash flow generated by rentals departments. We haven’t heard much about property management marketing this year, but as sales get tougher, we’re predicting that estate agents will fall back in love with leasing in 2016.

The Strong get Stronger

The agencies who have been market leaders over the last couple of years will, more often than not, be the ones that thrive as market conditions change. These agencies have often focused not only on listing and selling property, but have used a buoyant market as an opportunity to train and develop new talent, build robust databases, and run strong office and agent marketing campaigns that will keep them top of mind and dominant as conditions change. Those who have been lazy with marketing and lax with selling VPA will quickly find themselves in trouble. 

What do you see shaping up as the major trends in real estate for 2016?