The Data is in and its not pretty says REAPs founder Chris Mercer, and all owners of Real Estate Agencies need to invest the time to look at the data no matter how bad, make sure they understand the data and what it means to their business. 

Chris Mercer, told The Real Estate Conversation, “All current reports and commentaries about the CoVid property surge in Australia agree that it is over, and that rental vacancies are at historic lows. The market sales and rental statistics suppliers confirm all the above, and this reinforced the REAP20 Profit indexes 2022 Financial year insight that sales volumes would drop and the property management division would lift with the global and local factors being encountered.”

Chris Mercer, states,”This change needs to be met now, and decisions need to be made, decisions that will determine the competitive landscape in Australia and who will grow, stall or vanish.”

Chris Mercer has been a key figure in Real Estate agency profitability for some 25 years and says the famous French philosopher Pascal quote that best resonates with him more than ever is, "man has learned one thing from experience, that man does not learn from experience", and for every business owner running a real estate business in Australia, I hope this is not the case.

So what have we learned?

The REAP20 Index result for June 2022 confirm a triple threat to established business owners bottom lines,

1. YoY Revenue will in most cases be lower for Calendar Year 2023, at least 20% down, if not higher.
2. Salaries are rising for fixed income roles, while Agents payout %'s are higher than ever.
3. All Overheads are experiencing inflationary pressures.

One of the above issues is troublesome, but the combination of all three factors can quickly have a compounding impact on even the most well credentialled business operations.

Looking ahead the team at REAP expect the index to continue to see revenues drop based on the September 2022 quarters results being posted, leaving less profit for businesses to pay the overheads in place.

So what are the decisions that business owners cannot avoid? 

There are three;

1. Cut overheads and waste now, or keep the status quo and fund them from owners Commission Revenue? Vanish?
2. Act in a 'survival mode' by downsizing your sales division a little until market rebounds and sell a bit more. Treading Water?
3. Growth mode and look to seize on the opportunities that will present themselves grow through recruitment and acquisition? Grow!

Mercer says, “its vital that agency practitioners are not frightened of the data and that they must eagerly embrace the facts, and make informed decisions to sustained growth and profitability.

History proves it is in these changing markets that the current market players make their moves and those that get it right come out with the advantage of the next market lift and those that hesitate can be left behind

You can only cut costs to make a profit, but you can't cut your way to growth, you must invest in your business, he continued. 

Chris will share the latest REAP20 data in a free webinar which reveal the state of the real estate agency sector and the insights he and the REAP team have gleamed.

Please join the Live and free Webinar to be hosted by REAPs founder Chris Mercer.

When: Tuesday 15 November 10:30 am to 11.15am AEDT 

How to Register: Registration link here

Will you sink, swim or tread water in 2023?