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In a market hindered by rising rates and sceptical consumer sentiment, realism among all transaction stakeholders is key to managing the turbulence, according to one city-based operator.
For Thomas Crawford, an Adelaide-based sales partner at Toop+Toop, the South Australian capital’s inconsistent start to the year was “totally expected”.
Not only that, but the unpredictably whirlwind period is “very typical of real estate”.
In a market where certain properties are doing better than others, Mr Crawford, speaking exclusively to REB, shared his belief that those sales exceeding expectations are in part achieved due to vendor expectations.
“It’s no coincidence that the vendors who provide a realistic sale price are doing much better than those who begin their campaign with an unrealistic figure,” he said.
However, the finalist for sales agent of the year (Metropolitan) at the 2023 REB Awards did not criticise those vendors setting prices more accustomed to different market conditions, acknowledging that the South Australian capital has “just come off the back of a crazy hot market where similar properties were achieving those prices”.
For this reason, he revealed that “it’s easy to see why some vendors do have unrealistic figures in their minds.
But, given the Reserve Bank of Australia’s (RBA) persistent monetary tightening cycle, which has seen the official cash rate hit 3.85 per cent, he concedes the market is not conducive to achieving sales that were commonplace 12 months ago.
That’s why he believes vendor realism is paramount to squeezing the best out of the current market.
“Unfortunately, interest rates have changed our market, but not all vendors have been able to accept this,” he revealed, adding that a key part of shifting their sentiment is through agent guidance and education.
Mr Crawford cited market feedback and auction results as “good tools and strategies to employ in this environment”.
Coming out of the opening quarter of 2023, he explained the biggest driver of activity of late has been a fear of an imminent market slowdown in Adelaide, which recorded a 0.1 per cent dip in CoreLogic’s Home Value Index (HVI) in March before rising 0.2 per cent in April.
Describing people as wanting to “get in now before it’s too late,” Mr Crawford explained consistency would be his primary focus moving into winter, when sales activity typically drops, although recent auction results would suggest otherwise.
“The moment we become complacent is the moment somebody else takes our title as number one in the area,” he said, insisting that “we cannot let our consistency levels drop”.
Predicting the market to “toughen up” to the rising rate environment as the year progresses, Mr Crawford shared his expectation that stressed sales will be the biggest driver of market activity due to a myriad of reasons, including the inability to maintain loan repayments.
From his perspective, this trend is “inevitable”.
But it’s not the only opportunity out there. According to the agent, there will be plenty of opportunities in the back end of 2023 for those agents who make themselves most available.
“The reason is because complacency is most agents’ biggest weakness, whereas the highest performers typically have learnt how not to be complacent.”
“It’s as simple as being the agent who actually does the work, puts in the hours, and does their job properly,” he reflected.
“Opportunity is out there in abundance; you just need to want it more than your competitors.”
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