Are we always children?

Where is your inner six year old when you need them?
Author: Sue Barrett on 21 December 2009 Print

Sue Barrett is a Thought Leader on 21st century sales training, sales coaching, sales leadership, sales capability and sales culture. She practices as a coach, advisor, speaker, facilitator, consultant and writer and works across all market segments with her skilful team at BARRETT. They help people from many different careers become aware of their sales capabilities and enable them to take the steps to becoming effective, and productive when it comes to selling, sales coaching or sales leadership. Sue and her team are your first and best reference when it comes to forging out a successful career as a competent sales professional and leader . If you have an idea, capability, product, service or opportunity that can benefit another and make their life better in some way then Sue says you need to be able to sell - ethically, honourably, and effectively. To hone your sales skills or learn how to sell go to www.barrett.com.au.

One of the biggest issues for sales people is knowing the right questions to ask customers.

In our experience many people complain of not knowing how to structure questions, or knowing what type to ask and when to ask them. In fact, we have found that many people are often caught wanting in the questioning department and suffer from what we call 'amnesia questionitis'.

Why is this so? Why are so many people paralysed when it comes to the vital skill of questioning?

If you have been around any children aged from three to six years old you will know that they do not suffer from 'amnesia questionitis'.

In fact they never stop asking questions. It has been shown that asking questions and seeking answers comes naturally to all of us and as children we excel in this area. They also excel at listening too. The two skills go hand in hand.

Everyone is born curious to some extent, that is how we find out about the world. As children we want to know how things work, why this happens, where things come from, etc. Children will keep asking until they get a satisfactory answer.

Only the other night my eldest son asked me if I was ever afraid of the dark. It was a great question because it showed me a number of things about my 11 year old son:

1. He still had the desire to know about things and felt safe and confident to ask me.
2. He clearly wanted to talk about this now.
3. He wanted to understand why this happens and was he the only one it happened to.

As we explored the topic he realised that most people feel or have felt afraid of the dark at some stage and that it is quite normal. I shared with him how I felt and what I used to do about it. He also came to his own conclusion that it was his imagination that was making him feel afraid at times and that he could control that too if he wanted and how funny it was that you could let your mind trick you. We had a great chat and it was easy and enlightening.

I have lost count of all the questions my children have asked me to date, but I love this quality about my children. By them asking me so many different questions I have learned so much about them, myself and the world we live in. For instance, I have been able to answer questions I didn't get answers to when I was little but had been on my mind since I was six or seven. I want to point out that I don't always answer all of my children's questions, I have also taught them how to answer questions for themselves through reasoning skills and self inquiry. When we can't answer something the saying in our family is 'Google is your friend'. My mother laughs every time I tell her about my children's questioning abilities because she says 'that sounds exactly like you'.

You have probably gathered by now, especially those who have been reading my articles for some time or those who know my work that I never stop asking questions. It is a life skill that I cherish dearly. It has opened up so many doors for me and made me a much better person for doing so.

So it saddens me when I meet people who feel they are unable to ask questions or do not know where to start or feel they need to be given permission to do so.

What happened to their natural ability to ask questions? It seems that as we grow up, many of us seem to lose the desire to ask questions. Maybe it was because we lost some of initial curiosity because we get caught up in the day to day grind and just want to rest.

Maybe we have been taught to not question. Often at school we were taught to receive the 'right' answer rather than to question it. Although I, personally seemed to ignore this one at my peril sometimes.

Maybe some children were never listened too and instead ignored so they never had their questions answered so they eventually gave up.

Others of us became self-conscious, wanting to fit and so didn't question the prevailing paradigms of the time or situation. Or we did not want to appear stupid if we as a 'dumb' question. Again I ignored these too.

I find when we facilitate workshops that I have to state to the participants that there is no such thing as a dumb question and you should question things. I encourage them to test assumptions, work things through, ask 'why?' and 'how?', etc. I inform them that I am not there to tell them what to think but to show them how to think.

When prospecting or selling I often say to people 'What is the worst thing you will hear if you ask someone for a sale or an appointment?' A 'No'. Big deal. At least you know. The worst thing is not asking at all because then you will never know.

Asking questions implies that you are using 'thinking' as a skill. Thinking requires effort. As Henry Ford said 'Thinking is the hardest job going around that is why most people don't do it'.

Maybe people are lazy and just don't care. But I don't think so. Why would we get so many requests about how to ask good questions? Yes there is skill in knowing what questions to ask, when and how to ask them – for instance we have a workshop solely dedicated to this topic.

However, the purpose of this piece is not to go into what questions to ask but why are so many of us lacking in this area?

When we don't ask questions we are at risk of accepting what we are told is true. This can then lead to all sorts of issues such as:

* being told something is true when it is not.
* making assumptions and being caught out taking the wrong approach.
* being misled and losing out as a result,
* acting unwisely and causing harm to yourself or others.
* giving people what they don't need.
* creating more problems than there were before.

We need to bring back our six year olds – in a slightly more professional form of course and find and reignite our natural talent for questioning again because:

As Arlene Harder stated:

"When we are able to push ourselves beyond what we assume we know and what others tell us is true, and when we explore whether or not the opinions of others make sense to us, we can see the world with new eyes.

The willingness to question our most cherished assumptions is the first step in finding a new perspective on the conflicts and extremism that divide us today. Just as a pebble thrown into a pond creates ripples that spread out in wider and wider circles, people who ask interesting, fun, and challenging questions of themselves, and of others, can form the nucleus of an energy that can turn the world around.

The more we are willing to go beyond easy answers, the more likely it is that we will find common ground with others. Also, knowing that others are asking the same questions we are asking, even though they may arrive at a different conclusion, connects us all in a new way."

Effective questioning is a vital life skill that should be cherished and exercised on a very regular basis. It affects every aspect of our lives on professional and personal levels.

Questioning does not tell you what to think it shows you how to think.

So ask yourself the question: "how do you encourage effective questioning in yourself and your team?'

Remember: Everybody lives by selling something.



Click here for blogs from Sue Barrett.

Investor Heaven ??? Maybe

“Investors will flood market in 2010”:

PRD Nationwide

Wednesday, 09 December 2009

Australian Property activity is expected to increase in the first quarter of 2010, thanks to strong demand from investors and upgraders.

PRD nationwide research director Aaron Maskrey on Wednesday claimed that he expects to see investors fuel the majority of activity in the property market throughout 2010.

“I don’t think we can expect to see the high level of capital gain experienced in 2007, but I can say that the pain experienced in 2008 is over. So, it is all good news from here,” he said.

Mr Maskrey recently completed a report detailing Brisbane’s property hotspots for 2010.

Based on their locality to public transport, the CBD, amenities and employment opportunities, Mr Maskrey said the Brisbane suburbs of Chermside, South Brisbane, Annerley, Fortitude Valley, Hemmant, Indooroopilly, Cannon Hill, Bracken Ridge, Woolloongabba and Red Hill constituted the top picks for investors.

“Moving in to 2010, investors will be enticed into the market as rents increase and a declining number of first home buyers enter the market,” he said.

PRDnationwide research anticipates investor finance commitments to increase to around 30 per cent of total finance commitments – which is to a level experienced prior to late 2008.

“A recent survey shows the majority of investors, 52 per cent, believe that Queensland is past the bottom of the property cycle which is good news indeed for 2010,” he said.

“We have already seen increasing levels of activity in most suburbs, and as activity increases, expect prices to follow suit.”

Are interest rates the key or do we disregard minor movements

Home sales to surge in 2010: Ray White
Friday, 11 December 2009
A robust residential property market is forecast for 2010 provided interest rates don’t climb too much higher, according to Ray White.
Ray White has enjoyed strong property activity this year, with more than 4,215 auctions listed over the past 12 months in NSW alone.
“These results show that the market has been coping very well with rate increases,” Ray White NSW CEO Stephen Nell said.

Anthony Kassis of Ray White agreed, telling Real Estate Business that auction sales in the Maroubra and Mascot areas have been exceptional, despite it being the lead up to Christmas, which is traditionally seen as a quiet period.
“Auction sales have done very well this year and continue to do so, with prices moving up by about 10 per cent [compared to last year],” Mr Kassis said.
“We recently sold a two bedroom residence at auction for $965,000 – about $130,000 over the reserve price, which was astounding.”

Off the plan sales have also been doing extremely well, according to Mr Kassis, who said the agency recently sold 65 units off the plan in Dulwich Hill.
“Off the plan sales are popular right now, particularly in this economic climate, because they enable buyers to save money over the next 12 months or so while having the ability to lock in an early interest rate,” he said.

But despite the currently positive outlook, Mr Kassis said if variable home loan interest rates were to hit 7.5 to 8 per cent, the market would see a downward shift.

Aren't our homes big enough yet???

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Investors seek larger properties

Friday, 11 December 2009

More people are choosing to live alone than ever before, but investors are overlooking the growing popularity of smaller apartments, according to a survey.

PRDnationwide’s recent survey revealed that investors are seeking apartments between 81 square meters and 101 square meters, with only 4 per cent considering apartments under 50 square meters.

Yet, figures from the Australian Bureau of Statistics showed around two million people aged 15 years and over are living alone.

Over the last couple of decades, the proportion of people living alone has increased from 9 per cent to 12 per cent.

And this number is projected to increase to 16 per cent (3.1 million) over the next 20 years.

PRDnationwide national director Jim Midgley said despite statistics suggesting more people were living alone, two-bedroom apartments were still the most popular option for investors, followed closely by two-bedroom-plus-study and three-bedroom apartments.

“This is possibly due to the perception that the rental market is more accepting of two-bedroom units ahead of one or three-bedroom options,” Mr Midgley said.

CRAZY MONEY ! ! !

Unfinished mansion sale highlights market strength
An unfinished Gold Coast residential mansion has been sold for $17 million.
The mansion on Hedges Avenue, Mermaid Beach, was purchased last year for $27 million by failed Brisbane information technology entrepreneur, David Tzvetkoff.
The property was sold to a Gold Coast businessman.
Knight Frank prestige agent James Hall said that multiple offers were received during the tender campaign from both national and international buyers for the property.
“The top end of the market has seen some good results over the past six months. This proves there’s depth to the market and interest has come from all over the place” Mr Hall said.
Despite the low price compared to the previous sale, co-agent Ray White Broadbeach’s Michael Kollosche said: “It’s still a significant price given the house is unfurnished and requires a lot of work”.
“It’s had a big impact on buyer confidence during the last eight or nine months, now that it’s gone I think we’ll see a change in people’s sentiment. This opportunity to buy this property under these circumstances will not happen again.” Mr Kollosche said.

A STRONG LIGHT ON THE HORIZON

Third of Aussies plan to buy property
MORE than one third of Australians plan to buy a property in the next two years despite concerns over higher living costs and rising interest rates, a survey shows.
And 40 per cent of Australians plan to revisit their financial plans as the nation emerges with a more positive economic outlook, the survey, commissioned by mortgage broker Mortgage Choice, found.
Mortgage Choice corporate affairs manager Kristy Sheppard said more borrowers were now taking "ownership" over their financial situation.
"As a housing market service provider, Mortgage Choice is pleased to see 41 per cent of respondents planning to buy property in the next two years and 43 per cent of them planning on an investment property.
"Hopefully, increasing demand from this buyer group will stimulate more housing construction," Ms Sheppard said.
"The Australian housing market has emerged from the financial crisis relatively unscathed compared to its global counterparts, which would probably be part of the reason why 64 per cent of respondents believe house prices will rise in the period to November 2010."
The survey found 40 per cent of mortgage holders believed they could afford to make repayments at an interest rate of more than 11 per cent.
The online survey of 1025 Australians, conducted in early November, found 19 per cent of respondents were most concerned about rate rises while 16 per cent were concerned about job security.
It follows a similar survey last year that found 20 per cent of Australians had concerns over job security and 18 per cent were concerned by the federal Government's economic management.
Ms Sheppard said that while many borrowers were concerned about rate rises, 40 per cent were prepared for increases of at least five percentage points, a much higher figure than was forecast for the next few years.
"This suggests many borrowers can comfortably repay their home loan sooner, if they put their mind and budget to it," she said.
"Improved sentiment from Australians around their livelihoods is also terrific to see."
Almost three quarters of respondents were confident the Australian economy would be strong during 2010.
In a further sign of consumer confidence, 17 per cent said they could afford "any increase".
Two thirds of participants believed rates would rise by between 0.25 per cent and 1.5 per cent before June, 2010.
The survey also found more than 60 per cent of West Australian baby boomers believed investing in property was safer than investing in shares.
Source
AAP
November 26, 2009

Agents under scrutiny

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REAL ESTATE AGENTS UNDER THE SPOTLIGHT...

REIV to crack down on misleading advertising

The Real Estate Institute of Victoria (REIV) plans to introduce a new code of conduct for agents that will prohibit them from using misleading advertising methods including the phrases ‘price plus’ and ‘in excess of'.

Under the new code agents would be required to advertise a property with a single price, a price range of up to 15per cent or publish no price at all.

While the rules will only apply to REIV members, those who go against the code of conduct could face hefty fines and/or expulsion from the Institute.

A spokesperson from the REIV told Real Estate Business that the vast majority of agents do the right thing when it comes to pricing.

“While there are always one or two exceptions to the rule, we developed this code not to weed out the dodgy agents but to benefit consumers and help them make the right choice when it comes to buying their property,” the spokesperson said.

According to a spot audit conducted by Consumer Affairs Victoria, only 5 per cent of all problems associated with real estate agents involve pricing issues.

The proposed code is expected to be submitted to the Australian Competition and Consumer Commission for review and authorisation this week, a process that could take upwards of six months.

Affected parties will be given the chance to speak out for or against the proposed changes.

Units v houses

Units no longer housing’s poor cousin
Thanks to RP Data for this insight...


The capital growth associated with apartments has virtually been on par with detached housing over the last five years, putting to bed the myth that houses appreciate at a faster rate than units.

Many home buyers and investors have adopted the philosophy that houses will generally outperform units. Most would argue that the underlying value of the land associated with a house is the real driver of capital growth. However over the last five years there has been little difference between the two property types based on the rate of capital growth. Nationally, houses have recorded an annualised rate of capital growth of 4.8 percent while unit values have increased by 4.7 percent per annum over the same period.


The equivalent level of capital growth associated with units is a relatively new phenomenon. Over the last ten years houses have outperformed units by about two percent per annum.


The improvement in capital growth associated with units may be attributable to housing affordability. Based on the national house value ($506,000) and national unit value ($409,000), units are about $100,000 more affordable than houses; a fairly compelling differential for many home buyers.


Another reason for the improvement in unit values is the changing demand side factors in the Australian market place. More baby boomers are downsizing from their empty nest; twenty and thirty something’s are more interested in living in the same location as where they work and play; and the lack of purpose built student accommodation has seen demand for units increase markedly from the overseas student sector.


Developers have responded accordingly, introducing units designed for a very specific segment of the market: luxurious boutique apartments for the empty nesters, smaller one and two bedroom apartments with minimal kitchen facilities for the young professionals and tiny apartments with communal social areas for the student market are just a few examples.


Additionally, units tend to provide higher rental yields than houses. This is partly due to the fact that unit developments are typically located in areas that have high rental demand: close to major transport networks, employment nodes or retail centres.


With population growth now projected to be well beyond expectations (Treasury recently announced that the Australian population is projected to reach 35 million in 40 years time; 7 million more residents than was originally forecast) and strategic land supply likely to remain constrained for a long time, the demand for well located unit projects is likely to increase.


Of particular interest to investors will be transit oriented developments (TOD’s) that take advantage of more affordable but strategically located land to provide unit product that is both affordable and desirable. This style of development is generally mixed use in nature, incorporating a mix of residential, retail and office space that is located directly on a key transport spine such as train line or bus way.



Source: www.rpdata.com

Thoughts from Real Estate News

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1. When actions speak louder than words
Have you ever heard the phrase “you never get a second chance to make a good impression”? As any successful salesperson will tell you, the ability to accurately interpret your prospect’s body language is an essential aspect to making that sale.


Real estate champions understand the importance of non-verbal communication during the sales process and adapt their sales techniques depending on their interpretation of the situation.


Body language is the oldest and one of the best communication tools we have, yet so few of us ever fully develop the necessary skills to actually make sense of it! Do you present yourself in the best possible light when prospecting? With research indicating that over 80 per cent of every conversation is conveyed through non-verbal communication, it may be a good idea to take a check on how you present yourself to your client during your first meeting.

Here are a few pointers to get you started…

First impressions count!

Whether we like it or not, research shows that we decide whether or not we like somebody within the first few seconds of meeting them. This works both ways - a positive first impression is vital to winning the prospect over to you as well, so take the time to make eye contact and smile at your client. Handshakes should be firm, not overpowering or too limp.

Mirroring

Creating an instant rapport with your client can be achieved by ‘matching and mirroring’ your prospect’s body language. The process of mimicking their gestures is an unconscious way of informing them that you agree with what they are saying. It is important to ensure that your actions are in congruence with the words you are saying as there is often a discrepancy between the two. When in doubt, experts advise you to trust the non-verbal communication!

Many sales trainers believe that an agent can deliberately build trust and rapport by subtly matching a person’s body language during the first 10-15 minutes of an appointment. If you notice that your prospect is subconsciously matching your body language, then the chances are that you have developed a positive relationship and they are interested in what you have to say. Congratulations!

Reading the signs

There are two fundamental categories of body gestures; open/closed and forward/backward. When a prospect is receptive to your ideas, they will generally have their arms unfolded, legs uncrossed and their palms exposed. However, should they turn their body away from you or show closed gestures then you may need to rethink your communication strategy.

As a general rule, the following gestures can indicate these scenarios…

• Rubbing eyes – deceit
• Rolling eyes – dismissive gesture
• Rubbing nose – dislike of the topic
• Hand or fingers blocking mouth – deceit
• Stroking the chin – making a decision
• Leaning back and closed – lack of interest
• Leaning back and open – contemplation and cautious interest
• Leaning forward and closed – potentially aggressive
• Leaning forward and open – interest and agreement

It is important to remember that isolated body gestures should not be taken out of context, so try to look at the overall pattern of your prospect’s behaviour as opposed to individual actions.

Non-verbal communication has a much greater impact and reliability than the spoken word; the ability to ‘listen with your eyes’ is a critical aspect of prospecting. If you can recognise when a prospect is interested, you can begin to make headway in closing the deal with them at the appropriate moment without applying too much “pressure”.

2. There’s no ‘I’ in team: or is there?
Effective teamwork is a vital component of building a successful real estate business, yet without individual characters and their varying personalities there would be no team! Does that sound confusing?

Unfortunately, team orientation can often come at the expense of the individual. In a collectivist, team-orientated company, people tend to be less adventurous; that is, they are less likely to deviate in directions that lead to innovation and creativity.

Without vivid and unique ‘I’s a team is flat, uniform and stereotyped. Does this sound like the type of team that you want to build? Of course not! A team without desire, passion and jealousy isn’t a team that is going to get results.
When putting a team together, it is important to remember to include a mix of very different characters – then resist the urge to suppress their individuality, but instead harness it to achieve collective goals!

During team development exercises we are taught to think and act as a team and work together to win, and if everybody plays their role as defined, the team will reach their desired aim. Conflict over issues within a team is not a bad thing; in fact, energetic discussions about issues are healthy when handled in the appropriate manner! It can also help to create understanding and confidence in the product or project, when objections are handled constructively.

So what factors do you need to take into consideration next time you are developing a team? Here are a few thoughts that you may want to take into account…

1.Does each member know the mechanics behind working as a team? Too few team members understand the dynamics needed to make a team function – it is a skill that needs to be learned and not left to chance. Individuals need to recognise that the strength of each individual is the key to success!

2.Are team members clear about their roles within the group? They should be assigned to tasks dependent on their skills. If they aren’t clear about the contribution that they bring to the group, their self-worth will be in doubt, which will in turn cause resentment towards other members.

3.Will the team member contribute effectively to the team? It is important for workers to uphold their share of what needs to be accomplished. Although it is important for members to retain their sense of individuality, the team needs to reach its goal.

4.Will each team member share responsibility when the chips are down? Make sure that you build a team that doesn’t adopt a blame culture and each person is accountable for their own activities. If a team member is not giving 100 per cent then they must be culpable for some of the problems.

Good teams, in whatever sphere of life, require a wide range of qualities that are in creative tension to function. The basic building blocks of a team are comprised of individual personalities – you can spell team with an ‘I’!

3. Virtually Yours – Is it time to hire a PREVA?

Wouldn’t it be great if you could have an assistant whenever you need one? Well, now you can! The dramatic rise in the use of the Internet since the 1990s has paved the way for the rise in the use of ‘personal real estate virtual assistants’ or ‘PREVAs’, who are outsourced and usually work off-site.

The Internet has enabled real estate agents to bypass much of the routine administrative tasks that they have no time to complete by enlisting the services of VA’s who are experienced in providing support to the industry.

A VA can be selected and hired on a project-by-project basis, by the hour or by task. It is completely up to your own need! Most are competent enough to perform a variety of tasks from general administration, making listing presentations, scheduling appointments and chasing up sales leads.

Why hire a VA?
Although the role of the VA is similar to taking on a temp, they are generally considered to be more entrepreneurial as they are self-employed, bill only the hours worked or by tasks completed, and are dependent on referrals and steady work flow.

Hiring a VA means that you get all the benefits of outsourcing – no equipment and rental costs, no insurance to cover for, no sick pay, vacations or other budget draining items to cover for.

If you know what you are willing to pay for the services of a VA, then their location is not a problem! You have the option of shopping around for VA’s located in areas where wages are more reasonable to keep the costs down.

Is it practical?
Hiring a virtual assistant is becoming a popular practice for real estate professionals who do not have the time to perform routine tasks. For an hourly fee of anywhere between $22 to $40 - less than the cost of temps or employees - agents can take advantage of professional assistance as and when they need it. VA’s are already well versed with computers, and can assist with your specific needs from traditional office support services to other areas such as web design.

Even if your VA resides on the other side of the state, all of the necessary technology is available these days to communicate with them as if they were in the next room. Work assignments can be delegated via e-mail, phone, fax or web-based tools like instant messenger.

How can I find a VA?
The Internet provides a wealth of information about VA’s. By simply entering ‘virtual assistant’ in your favourite search engine, you will find literally hundreds of sites dedicated to providing the services of a VA. These sites often contain searchable databases by industry, location, experience, skills and price so that you are able to find a suitable assistant reasonably quickly.

When you have found a VA that matches your requirements, it is considered good practice to contact them via email. After all – that is their world!


4. Phishy business
The incidence of online identity theft has climbed steadily over recent months and is proving to be a headache for financial institutions and online retailers as they struggle to curb the number of criminals coveting personal information and online account details from their customers.

The latest statistics are scary: there are approximately 81,000 known computer viruses and 500 new viruses detected each month. Over two billion spam email messages are posted each day, and 27 per cent of these have a hidden Customer ID to determine if they have been opened.
‘Phishing’ is a popular strategy devised by thieves to fool people into revealing passwords and other sensitive information by posing as a legitimate source such as a reputable bank.

The dynamic nature of e-crimes has meant that technology companies have needed to introduce a number of products and services onto the market aimed at significantly reducing the number of online threats. While these have been somewhat effective, identity theft still continues to be a problem, especially for the computer novice.

The good news is that many of these threats can be avoided by being vigilant and using the appropriate security software. Here is some practical advice that you can follow to help you protect yourself against identity theft!

Do not open or respond to unsolicited emails
You have probably already been the unsuspecting recipient of one of these ‘phishy’ emails that require you to provide personal information or passwords. They often use scare tactics to alarm you into responding. Remember – if in doubt, do not click the link on the email!

Look for the security padlock
You know when you’re in the secure part of a website as a small padlock appears in the bottom right hand corner of your web browser. This means that any personal information that you have entered cannot be seen by hackers.

Beware of ‘pharming’
This is one of the latest versions of online ID theft, whereby a virus or malicious program is secretly planted on your computer and hijacks your web browser. When you type in the address of a legitimate website, you’re taken to a fake copy of the site without realising it. Any personal information you provide at the phony site, such as your password or account number, can be stolen and fraudulently used. Once again, the best defense is to look for the security icon.

Protect your PC
Make sure that your PC is updated with all of the latest anti-spyware software, a firewall and spam filters. A firewall will prevent hackers and unauthorised communications from entering your computer, and spam filters will help to reduce the number of phishing emails that you get.

Passwords
You know that little box that pops up and asks if you want your computer to remember certain user names and passwords? Don’t tick it! Most passwords are stored on a Windows 95/98/ME system and even the most half-baked would-be hacker knows what it is. If you are not using a firewall it is pretty easy for these people to steal your password file and attempt to crack it at their leisure.

It is worth also noting that the best passwords often include a combination of letters and numbers – none of which have any resemblance to your name.


5. Industry News

Property market to remain strong despite reduction in first home owners grant
Last weekend's auction clearance rates remained strong with first-time buyers rushing to take advantage of the last week of the first home owners grant, despite a drop in volume numbers due to the AFL Grand Final.

But despite the drop in value of the grants, Australian Property Monitors senior economist Matthew Bell says the recent growth in the market will not be deterred.

"If you look at last weekend's rates, before this most recent one, it was very strong in terms of numbers. In Sydney we had the most amount of houses up for auction we've ever had, and we had great clearance rates, so although there is some movement of getting in for the last bit of the grants the market is still holding up well."

But Bell says despite the strength of the market, the disappearance of the first home owners grant next week and again after 31 December will have an impact in the market.

"The general view is that there is going to be a drop off in demand due to the grant expiring, but I don't think that's going to transfer to a big drop in prices across the board. Investors are coming back into the market, and I think that will fill some of the gap in terms of demand."

"I think we will see some flattening in prices, but I don't think we'll see any of the catastrophic drops that people used to predict when people talked about the grants when they first came in."

In Melbourne, auction results were solid despite only 135 properties reported for sale due to the Grand Final. Of those 113 were sold resulting in a clearance rate of 86%.

"The auction market picks up again next weekend with 500 homes going under the hammer and nearly 700 the weekend after," Real Estate Institute of Victoria chief executive Enzo Raimondo said in a statement.

In Sydney, 470 properties were put up for auction with 342 sold and 37 withdrawn resulting in a 67% clearance rate. Total sales reached $253 million.

In Brisbane, 30 properties went up for auction with a clearance rate of 67%, and total sales reaching $10 million. In Adelaide, only five properties went up for the auction, resulting in a clearance rate of 60% and sales worth $1.2 million..

Source www.smartcompany.com.au


Home sales surge; Resilient financial system
• The Housing Industry Association has reported that new home sales rose by a staggering 11.4 per cent in August to a 19-month high.
• Detached home sales rose by a considerable 11.8 per cent while apartment sales increased by 7.5 per cent across Australia. Detached home sales were mixed across the states, up by over 20 per cent in Victoria and Queensland however lower by over 11 per cent in NSW.
• The Reserve Bank has indicated that the strong state of household balance sheets has helped consumers weather the global financial crisis.
• The Reserve Bank has highlighted the success of listed companies in raising equity finance. Equity raisings in the first half of 2009 was equivalent to 6 per cent of GDP – double the average over the past 15 years.

Source CommSec

First Home Buyers Grant ends

THE END OF THE CURRENT FIRST HOME OWNERS GRANT CURRENT SCHEME HELPS

AGENTS TO ENJOY 100% AUCTION CLEARANCES !

The first home owners grant combined with low interest rates has helped Sydney and Melbourne enjoy bumper auction activity, with clearance rates riding high, week out.

Lori Collins, principal of Harcourts HomeZone Annerley and West End, has excelled in the curent market, hitting a 100 per cent clearance rate this month selling just under $5 million in property.

Ms Collins told Real Estate Business the housing market was currently enjoying stellar results thanks to a final push from first home buyers.

“The past quarter was brilliant, but I think the next quarter is poised to be even better. There is a lot of pent up demand in the market at the moment. The problem will now be finding the stock to cope with the demand,” she said.

Ms Collins attributes her personal success to her rigorous marketing and refusal to talk price.

“When marketing a property I always advise my clients never to talk price. They should not discuss price expectations with family, friends or neighbours because as soon as they do – they effectively put a price cap on their property,” she said.

Ms Collins said she advises her clients to let the market decide the value of a property.

“My client’s house may be close to facilities, in a great suburb or be freshly renovated, all of which would significantly add to its value. In my experience, properties tend to sell for more when there are no price expectations associated with them,” she said.

“If you trust the process, the process delivers and the process is marketing without a price.”

Another marketing strategy Ms Collins implements is auction day communications to prospective buyers.

“I always send an auction email alert to my database on the day of an auction. Similarly, I also advertise the property in the local press on the day of the auction. I like to hold my auctions late in the day so that the advertising can reach the greatest amount of people,” Ms Collins said.

“Agents should not slack off on the day of an auction. I run the same add from week one to week four.”

First Home Buyers make way for investors

Tuesday, 29 September 2009

Investor activity is ramping up, with Aussie Home Loans recording a 32 per cent increase in the number of investor enquiries via their website. Aussie founder and executive chairman Mr John Symond said as of Thursday the $14,000 grant for established homes is reduced to $10,500, and from $21,000 down to $14,000 for new homes. “Investors have been patiently waiting on the sidelines to see what happens after the First Home Owner’s Grant is reduced,” Mr Symond said. “There has been a price bubble created in some areas as first home buyers have paid over the odds for their properties. For investors in that same price range, it has been prudent to sit back and wait for the grant to be reduced.” Mr Symond said a number of factors had come into play making it a good time to enter the property investment market. “Increased consumer confidence, high rental yields and a continued shortage of housing is pointing to a “perfect storm” of conditions for property investors,” he said.

Reserve Bank and Interest Payments

RBA Board minutes; Reserve Bank patiently sits on the sidelines report

• Reserve Bank Board members agreed on “a wait and see” policy at the last interest rate meeting, noting the significant improvement in economic conditions in domestic and global economies and allowing market interest rates to price in rate hikes.
• There are two key factors holding the Reserve Bank from raising interest rates. The bank is still unsure about the sustainability of the recovery and is also concerned about the health of business balance sheets.
• Board members noted the “strong macro stimulus” and the strength in the Asian region has provided a considerable support to the Australian economy adding to concerns over the already relatively high levels of underlying inflation.
• Australia’s chief commodity forecaster, ABARE, expects Australian winter crop production to have increased by 3.4 per cent to 36 million tonnes. Forecasts for Australia’s 2009/10 wheat crop is expected to rise by 3.4 per cent to 22.7Mt.

What does it all mean?
• It is pretty clear from the minutes of the latest Reserve Bank Board meeting that the Board believes that the best approach is to hold off on any rate hikes until more concrete economic data is available in coming months. The Reserve Bank Board has confirmed that the Australian economy is on a recovery path with the “strong macro stimulus” and the strength in the Asian region supporting the Australian economy.

The Reserve Bank Board is in “wait and see mode” on interest rates. Board members are still not convinced that the economy can stand on its own two feet. The Board also believes that further repair work is necessary on bank and private company balance sheets. However a quiet confidence is perceived in the Board minutes with members noting that domestic economic conditions continued to evolve in line with bank forecasts. And as the risks to the global and domestic economy diminish, the board will no doubt become more relaxed about raising interest rates.

In particular members focused on the strength in the Asian economies in particular China. The pickup in car sales in China and increasing export volumes throughout the Asian region bodes well for the longer term fundamentals for the Australian economy. Importantly Board members believed that the Chinese economy would continue to record solid growth outcomes in the longer term.

•The Board clearly believed that with interest rates at 49 years lows and significant fiscal stimulus currently been undertaken, it was having an expansionary effect on the Australian economy. However with fiscal stimulus waning, the Board is likely to keep the monetary stimulus in place until the recovery gets a strong foothold. As a result the Reserve Bank decided the more prudent course was to keep rates on hold at the last meeting.
• Certainly the relatively high underlying measures of inflation, coupled with the stronger level of domestic economic activity will be a key concern going forward, and the likely barometer for the timing of rate hikes. The Board noted that the rise in market interest rates had effectively done part of its job already, adding to the borrowing costs for business and mortgage holders and restraining the momentum of the economy.
• At this stage the Reserve Bank looks likely to keep rates on hold in upcoming months. However CommSec is not ruling out the possibility of the first rate hike of 25 basis points taking place in December.
• The rural sector certainly did its part in ensuring that the Australian economy avoided a recession and will play a significant part in supporting the economy until the recovery gains a strong foothold. ABARE has revised up forecasts for Australia’s winter crop production by 3.4 per cent to 36 million tonnes.
• The one major risk to forecasts is the possibility of not enough healthy rain, especially in Queensland and Northern NSW. Already the lack of winter rains has had a critical effect on crop production. However improvement in weather patterns in Western Australia has helped to support the upgraded crop estimates. The combination of higher production, favourable prices will be offset by a stronger Australian dollar.

What do the figures show?
• The Australian Bureau of Agricultural and Resource Economics (ABARE) expects Australian winter crop production to have increased by 3.4 per cent to 36 million tonnes on a year ago.
• Forecasts for Australia’s 2009/10 wheat crop are expected to rise by 3.4 per cent to 22.7Mt. ABARE did note that the winter rainfall was below average in Queensland and Northern NSW, however widespread rainfall over the first week of Spring has provided a degree of improvement for crop production However further good rain is needed. Western Australian crop production is expected to fare better above average spring rainfall expected.
• Barley production is tipped to rise from 7.7Mt over 2009-10 to 7.9Mt. Canola crop production is estimated to hold steady at 1.7 million tonnes in 2009-10. Sorghum production will fall 4.6pct in the year to 1.85 million tonnes, while cotton seed production will fall 12 per cent to 531,000 tons in 2010.
Minutes from the May Reserve Bank Board meeting
Key Comments:
• “Members were briefed on the recent data for the Chinese economy, which had been somewhat mixed. Car sales had risen very sharply and export volumes had also been growing, including recently to the United States and Europe.”… “Overall, members observed that some slowing in the Chinese economy relative to the rapid pace in the June quarter had been inevitable but that the longer-term prospects were strong”
• “Of most significance to Australia, the Asian region had recorded strong growth in the June quarter. While this had been largely driven by domestic demand in these economies, reflecting strong economic stimulus, there were also recent signs of a pick-up in their exports...”
• “Outside Asia, most economies had experienced another fall in GDP in the June quarter, though more recent information suggested that the majority of these economies were now approaching a turning point.”
• “The US economy was expected to grow in the September quarter, after contracting by 4 per cent over the previous year”
• “In relation to housing markets, members observed that in countries that had experienced better economic outcomes and/or fewer financial sector problems (e.g. China, Canada, Norway and Australia), house prices now appeared to be rising quite solidly and were above or around earlier peaks. Even in the US and UK, which had earlier experienced significant falls in house prices, there had been some up-ticks recently”
• Retail sales: “Measures of sentiment had continued to strengthen. Consumer sentiment had risen sharply over the three months to August. Liaison with retailers suggested that household spending had softened somewhat in July but had been better in August.”
• Business investment: “The data for business investment in the June quarter indicated a strong rise in spending on plant and equipment, with a sharp increase in spending on a wide range of capital goods, including cars. However, this mostly reflected the bringing forward of spending to qualify for tax allowances. Car sales had subsequently fallen in July.”
• Exports: “The data for June quarter export volumes showed most categories were growing or holding up reasonably well. Manufacturing exports were the exception, and had fallen broadly in line with the falls seen in many other countries. On average, commodity prices had been broadly steady since the last meeting.”
• Financial markets: “There were some favourable signs in the Australian residential mortgage-backed securities market. The gap between secondary market yields and primary market yields was continuing to close, such that the prospect of issuance without the support of the Australian Office of Financial Management was increasing.”
• “Turning to banks’ funding, members noted that there had been a continuation of the strong competition for deposits. Together with an increase in term interest rates, which were rising because of expectations of monetary tightening, this was contributing to an increase in bank funding costs.”
• Outlook: “An important question for members was whether the global economic improvement would be sustained, or whether it was mainly a reflection of the strong macroeconomic stimulus that had been applied over the past year and might in due course fade. Members were also conscious that, even though financial market conditions had improved significantly and debt markets were beginning to function again, banks, corporates and households in many countries still faced significant balance sheet adjustments.”
• Policy decision: “As at the previous meeting, members noted that the policy decision in the near term involved balancing the risk of over staying an accommodative stance, and that of prematurely tightening and adversely affecting confidence and demand. The meeting concluded that the balance was best struck by leaving the cash rate unchanged for the time being, pending further evaluation of incoming information at future meetings.”

What is the importance of the economic data?
• The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.
• The Australian Bureau of Agricultural and Resource Economics (ABARE) release its Crop Report each quarter. The latest estimates on winter and summer crops assists investors in assessing conditions for the rural and resources sector and companies leveraged to these industries
What are the implications for interest rates and investors?
• CommSec is pencilling in the first rate hike within the first quarter of 2010. With longer term interest rates and funding costs for banks rising the Reserve Bank is more likely to hold of on any rate hikes and allow the market to price in higher cash rates.
• However if the domestic economy continues along the current recovery path a rate hike in December cannot be ruled out.

Source Savanth Sebastian, Economist, CommSec

Bang Crash Again

Some much needed thoughts on Ken Henry's address re the "next wave"..

Are due for another wave of fiscal terror and financial woes???
Apparently Treasury secretary Dr. Ken Henry is.

How does the bush-walking top bureaucrat plan for such an eventuality? He dons his rose-tinted glasses.

Despite this, all the commentary in the mainstream press has been on Dr. Henry's use of the word "shockwave." However, it was this comment that was perhaps the most important:

"My thinking is simply that, in a world that pays more attention to fundamentals than herd-driven investor psychology, the Australian economy will be seen as possessing the best of the qualities - of governance and flexibility - of the developed world while also offering an abundance of real investment opportunities usually found only in the developing world. That is to say, the Australian economy may be seen as offering the best of both worlds."

Dr. Henry's argument is Australia may outperform other Western economies.

He used a slide to highlight that retail sales had collapsed in all other Western economies towards the end of last year, but actually grew in Australia.

This was of course due to the stimulus package. And looking ahead he seems to think it is Australia's governance that will see investors pour many into our local economy.

Here's a surprise for you. We agree with Dr. Henry that Australia may outperform other Western economies.

However, he's 3,318 kilometres wide of the mark with his reasoning.

You see, it's not Australia's governance (funny that a civil servant should try and take the credit for growing the economy!) that will continue to attract investors, it's Australia's resources.

It's Kalgoorlie not Canberra that the Chinese and other Asian economies are interested in.

Look outside Canberra!

Sure, sovereign risk is always a factor for foreign investors when investing offshore. But to think that anyone invests anywhere purely because governance is sound is nonsense.

In fact, it's the governance that prevents investment not encourages it.

Not according to Henry. He says:

"[T]he Australian economy might attract an even greater share of global capital flows, and quite possibly even larger capital flows in aggregate."

But even if we accept Henry's argument - which we don't - it's just a shame that Australian companies will miss out on a lot of these investment opportunities due to bureaucratic red tape. The constant meddling by both political parties in workplace laws and other regulations makes it almost impossible for Australian businesses to grow.

That's why we have monopolies and duopolies in almost every industry you can think of. Only mega companies have the resources to cope with the amount of regulation forced upon businesses.

Why grow your business from a small family run operation into something bigger when you know you'll get stung by the government from every angle.

Henry's claim that 'governance' is responsible for future Australian economic growth is a warning sign to prepare for the worst.

Clearly it will embolden policy makers to become even more interventionist. Here's the slide Henry showed highlighting the fabulous Australian retail sales figures:

Government bails out retailers

"What's the problem with that?" you may ask. "It averted a recession didn't it?"

Postponed it, reader, postponed it. I'll explain this more in a moment.

We've said for some time now that Australia has a 'get-out-of-jail-free' card thanks to the resources industry and China's seemingly never-ending demand for iron ore, copper and anything else it can get its hands on.

While that is good for Australia it potentially poses a problem too.

The problem is the resources industry is perfect cover for meddling bureaucrats. The 'guaranteed' demand from China and the flow-on effect this has on the Australian economy enables bureaucrats to constantly raid the cupboards whether it's through taxes or royalties.

These taxes and royalties are then used on pet projects - roads, hospitals, schools, bribes, etc...

This necessitates more spending to create bigger and better projects.

Then the government figures if it can improve everyone's quality of life it will make them more likely to vote for them. So, what do they do?

They increase rules and regulations.

They manipulate asset prices. They manipulate interest rates. They impose arbitrary rules on businesses. They impose minimum wage legislation. They set targets to get more people into university.

The more rules the better. The outcome is a short-term hallucination that living standards have improved. Everyone can become a home owner. Everyone can own a car. And no-one has to work in a factory again.

In fact, no-one has to work again because we can all invest in property.

This inevitably leads to the destruction of the economy. Companies are forced to send their manufacturing offshore - the lucky ones that is. The unlucky ones just go out of business.

Unemployment becomes institutionalized as minimum wage legislation makes it illegal for an employer to pay someone 1-cent below the minimum wage. Even though that lower wage may have given someone a job.

Instead of banks lending money to businesses to invest in machinery or new technology, the banks lend more and more money to the housing industry. We published a table last week by the Commonwealth Bank that showed 56% of their loan book is residential mortgages.

That's a lot of money being spent on consumption. And it's exactly the same path the US took. They stopped producing and instead consumed. The fact that Australia's retail sales increased is not a positive sign. It is a sign that the economy is well and truly a net consumer than a net producer.

Think about that figure from the Commonwealth Bank again. Not one dollar of that money is being spent on something that will benefit the Australian economy relative to our international trading partners. After all, you can't export a house!

The claim that 'governance' has saved Australia is false. It has done no such thing. Governance has merely postponed the effects.

It's a governance snowball. It's getting bigger and bigger.

You only have to look at most of the other resource rich economies around the globe. To varying degrees they've all done the same thing. They've leached the easy money from their natural resources and blown the proceeds on supporting their pals or wasting the money on pointless government projects.

If the Australian government continues to reap the rewards from the resources industry while simultaneously handicapping every other industry, the results will be catastrophic for the Australian economy.


Thanks to Chris Sayce of Money Morning

REIV Economic Update August 2009

Feature Story: August Interest Rates
The board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 3.00 per cent at its monetary policy meeting today.

The board of the RBA believes that “with considerable economic stimulus in train around the world, the global economy is stabilising after an earlier sharp contraction in demand. Downside risks to the global outlook have diminished, though they have not disappeared and most observers expect only modest growth overall. There is tentative evidence that the US economy is approaching a turning point, but conditions in Europe are still weakening. Growth in China, in contrast, has been very strong in recent months, which is having an impact on other economies in the region and on commodity markets.”

The board goes on to note that “economic conditions in Australia have been stronger than expected a few months ago, with both consumer spending and exports notable for their resilience. Measures of confidence have recovered a good deal of ground. This suggests that the risk of a severe contraction in the Australian economy has abated. The most likely outcome in the near term is a period of sluggish output, with consumer spending likely to slow somewhat and investment remaining weak. Stronger dwelling activity and public spending will start to provide more support to overall demand soon, and growth is likely to firm into 2010.”


Current Economic Conditions
Economic conditions have stabilized slightly in recent months with positive economic data improving sentiment. Some positive economic data domestically suggests the Australian economy has held up strongly in the recent months, however, unemployment is still expected to continue rising throughout 2009.

The latest ABS employment figures revealed the national unemployment rate increased to 5.8 per cent in June 2009 (a level not witnessed since October 2003), with the Victorian unemployment rate reaching 6.0 per cent for the month. Many market forecasts expect the unemployment rate to reach the 7.5 per cent mark sometime next year; however, this figure has been revised from the expected 8 per cent from earlier in the year.

The All Groups CPI rose 0.5 per cent in the June quarter 2009, compared with a rise of 0.1 per cent in the March quarter 2009 and rose 1.5 per cent through the year to June quarter 2009. The most significant price increases for the year were housing (+5.2%), Health (+5.2%), education (+5.1%), food (+4.8%), and alcohol and tobacco (+4.7%). The most significant offsetting price falls for the year were for financial and insurance services (-6.6%) and transportation (-5.9%). Melbourne's CPI rose 0.3 per cent for the quarter and 1.2 per cent for the year to the June quarter 2009.

The Australian dollar was trading at 0.8281 US dollars at close of business on the 31st of July 2009. The Australian dollar has increased by 3.7 per cent in July against the US dollar. Some currency analysts expect the dollar to continue rising in the coming months as investors see Australia as a safe haven for their assets.

There has been some poor performance in the retail sector in June 2009, with seasonally adjusted data showing total Australian turnover decreasing by 1.4%, and Victorian turnover decreasing by 1.3 per cent for the month. The decrease comes after 3 months of positive and steady retail growth and is only the second month in 2008 to post negative retail growth. Unfortunately trend data not available from the ABS at the moment, as a number of issues related to current economic conditions (including the introduction of that government stimulus package) have made the calculation of the trend data series difficult.

An increase in consumer sentiment combined with some positive economic data has boosted car sales in recent months. Sales of new cars are up 5.7 per cent in June 2009 in seasonally adjusted terms, following a 5.4 per cent increase in May 2009. Car sales have not been up for three consecutive months since November 2007. Trend data was not available for publishing at this time.

Housing Market Conditions
The REIV June quarter medians have revealed that the metropolitan median price of a house has increased 9 per cent from $405,500 to $441,875, just short of the 2008 peak of $450,000. The unit and apartment market has recorded an almost identical increase as houses with the median price increasing by 8.3 per cent over the quarter from $360,000 to $390,000. The improvement can be attributed to low interest rates, confidence in the market, continuing population increases and the financial assistance to first home buyers. These factors have contributed to the July 2009 REIV auction clearance rate reaching 85 per cent. The REIV auction clearance rate has now been at 80 per cent and above for the last four months.

The ABS House Price Index released today confirms the price movements witnessed in the REIV June Quarter median prices. The house price index for the weighted average of the eight capital cities increased by 4.2 per cent in the June quarter 2009. All capital city indexes rose over the quarter with the largest increases in Melbourne (+5.2%), Sydney (+4.9%), Canberra (+3.6%) and Adelaide (+3.4%). Over the year to the June quarter, indexes in all capital cities fell, except for Darwin (+11.0%), Adelaide (+2.7%) and Hobart (+0.1%).

Building approvals showed some promise in June. The number of total dwelling units approved in Victoria increased by 17.4 per cent in seasonally adjusted terms for the month of June 2009, following a revised decrease of 7.8 per cent in previous month. The value of total dwellings approved in Victoria increased by 59.7 per cent to $2.03 billion dollars. In trend terms, the number of total units approved in Victoria increased by 0.2 per cent for the month while the value of total dwelling units approved increased by 1.3 per cent for the month.

Housing finance statistics also exhibited a positive note. In Victoria, the number of dwellings financed by first home buyers increased by 16.2 per cent in May 2009, as uncertainty about a possible extension of the boost saw many buyers trying to get in the market before the 30 June 2009 deadline. Dwellings financed by non-first home buyers increased by 12.3 during the month. The average loan size for first home buyers decreased by 1 per cent for the month, while the average loan size for non-first home buyers increased by 2.8 per cent. The total number of loans increased by 13.5 per cent for the month, while the total value of the loans increased by 15.4 per cent.

Lending conditions have also improved slightly as the total value of owner occupied housing commitments excluding alterations and additions for May 2009 increased in both trend terms (up 3.0%) and seasonally adjusted terms (up 2.3%). The total value of commercial finance increased in trend terms (up 0.4%) and in seasonally adjusted terms (up 4.0%). The value of total personal finance commitments decreased in both trend terms (down 0.9%) and in seasonally adjusted terms (down 2.9%).

The Metropolitan Melbourne rental market eased slightly in June 2009 with a vacancy rate of 1.4 per cent. The outer and middle Melbourne vacancy rates both eased to 1.0 per cent from 1.6 per cent respectively. The inner Melbourne vacancy rate remained unchanged at 1.4 per cent.

Thanks to the REIV