Changing Market Dynamics: The Impact of Trading Conditions on the Real Estate Industry in 2023
Written by Tim Mullen
Founder & CEO
The best way to summarise the industry’s 2023 trading conditions to date is probably the word ‘interesting’.
It feels very much like we’re still in a state of flux.
We haven’t yet seen a return to a ‘normal’ market for a number of years following the pandemic and the aggressive interest rate increases of the last 12 months.
While vendors enjoyed a strong seller market in 2021 and coming into 2022, it’s been a different story from then on. Sellers have largely sat on the sidelines hoping to achieve a result that was no longer realistic, buyers have grappled with the fact they could no longer afford what they thought they could. Out of all of this, we’re seeing a change in what’s required if you want a property to stand out on the market. The current conditions have prompted vendors to think about how they go to market to get the best possible sale price. It’s no longer just throw up a listing and sell within a week.
It’s now really down to why you vs why someone else. Competition is hot, which means property presentation becomes a much more crucial factor that can influence sale price. From a psychological standpoint, most buyers aren’t creative or visionary. They won’t necessarily walk into a property and see its potential or even visualise how they are going to live in it. Those that can are few and far between. In fact, research shows that buyers are more likely to purchase a property that is appealing to their eyes, with attractive photography, staging, and marketing playing a big role in their decision-making process. According to a selection of agents and stylists, styling a home can add anywhere from 7 - 12% to the sale value, with an article in OpenAgent even saying that it can go up to 20%. Another source referred to data collected from a leading Australian home staging company which illustrated that in the past, for every $1 invested in property staging the property owner received a return of $20 on average.
It’s probably no surprise that we’re seeing a big uptick in the number of both vendors and agents coming to us asking not just how we can help them cover listing costs, but how we can help support campaigns that really showcase properties; from decluttering to cleaning, renovations, staging, styling, professional photography, even virtual tours. With a focus on independent, boutique and fast growing agencies, we’re experiencing more and more come to us to both add a competitive edge to their offering and remove another point of friction for their vendors. Using our systems, they can easily collect the funds they need to complete the service they’re offering including works required to get a property not just on market, but standing out.
We’re also seeing the importance of trust with agents and their vendors. Quite a few other providers in the deferred payment industry have traditionally exploited loopholes in the way they operate and some have only changed because they’ve been forced to, rather than thinking about what’s right for the customer. That’s a point we often hear about why agents want to work with someone who looked to do it the right way from day 1.
At the end of the day, simplicity and convenience are key. An obsession with customer experience and slick processes and technology to support what you’re trying to achieve for them can really make you stand out. That goes for any player in the industry who ultimately wants to do the right thing for their client.