Agents' attrition leads to shift in focus

Stephen Nell, CEO of Ray White NSW, has expressed surprise at comments made by LJ Hooker executive chairman L. Janusz Hooker that it is focusing on property management to ensure a steady income base through the downturn.

“Our network now has 117,000 properties under management … arguably the biggest in the market. Many of our offices have fixed overheads covered by property management income so they can weather these cycles,” Hooker told the Australian Financial Review.

Hooker made the comments in response to estimates by Real Estate Institute of Australia president David Airey that the number of estate agents across Australia had dropped from 60,000 to 50,000 over the past year.

In 2006 a census found there were 72,000 estate agents in Australia.

Nell tells Property Observer Ray White has always understood property management to be a critical part of the business and has never shifted away from it.

But, he adds: “It’s critical not to drop the ball in the sales arena. Properties need to be sold, and people are still in the market to buy them.”

Nell says Ray White sales staff numbers in NSW, where the company has a significant market share, have held firm. “In last two years we have had no change in number of sales people,” he says.

“We have in excess of a thousand sales people and we are growing,” Nell says, adding that Ray White is currently processing applications from 27 businesses looking to join its network.

In making his estimate, Airey noted a new trend of business closures exceeding the number of new REIA members.

“There’s been a huge reduction over the past year,” he said.

According to Australian Property Monitors, since June 2010 the value of property sold has fallen by up to 27% monthly, compared with the corresponding month in 2009.

By contrast, the value of real estate sold climbed steeply through 2009, according to APM, reaching a record of $27 billion in 2010.