Carey Smith started with Ray White more than 30 years ago, and came to New Zealand after a stint in Western Australia. He talks to OneRoof columnist Ashley Church about the challenges of expanding the Ray White brand in the 1990s and his fears for first home buyers.
Q: Can you tell us about your childhood and your background?
I’m Australian, the youngest of five boys. I grew up on the Central Coast, in New South Wales - my mum and brothers still live there - but I boarded at the King’s School in Sydney on a scholarship.
The father of one my good mates at school worked in real estate. I used to spend time at his house at the weekends, and I ended up doing work for him when I was 17. From my friend’s father I got an understanding of property management, then I went to TAFE for three years, which is like a technical college, and I got my real estate licence.
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Q: So you did property from the start?
Yes, after I left school. I started on the Central Coast. I stayed in property management for a while because you weren’t allowed to sell until you were in your early 20s.
Q: So something must have changed for you to move into sales?
Yes. I moved north to be closer to my dad. I started a real estate agency with a friend when I was 21, in the mid-80s, near the border of NSW and Queensland. It was a developing area. I was still doing the things young guys do, playing a lot of footy …
Q: How did you find the selling when you started in real estate?
Good. Customers ranged from developers to first-home buyers to buyers looking for beachfront properties. We did a lot of holiday lettings too.
Q: How did you start at Ray White?
In 1989 I had a change of personal circumstances and I went to Sydney. I door-knocked a few companies looking for a job. One was Ray White, which back then was just a fledgling business in NSW. They told me they would get back to me in 10 days - well, I waited but I didn't get a call. The next day I rang them and the guy I spoke to said, "Oh, sorry, Carey, didn't they call you? You got the job.” That was a relief, so I started with Ray White in December 1989.
Q: Can you tell me a bit about the business?
Ray White started it. He passed it onto his son, Alan, who passed it onto his son, Brian, the current chairman of the business. Dan White, who is fourth generation White family, is the operational leader. His brother Sam looks after loans and his brother Ben looks after a property management company.
Ray White decided to purchase two real estate firms in Western Australia and at the same time they bought United Realty in New Zealand. I was invited to go to Perth.
Q: You must have impressed them while you were in Sydney?
Yes, but it wasn't a big organisation at the time. After joining I moved into a corporate role and learned about auctioneering, development, training, the mechanics of the business. There wasn't too much technology to learn back then.
When I went to Western Australia, my job was to help realign the businesses Ray White had bought. I wasn't in at the deep end - I was still a young guy at that time. From there, I was invited to do the same for the New Zealand business, just for a couple of years.
The business in NZ was still very much United Realty and my job was to bring in the Ray White culture and methodology. That was difficult, much more than what I had experienced in Western Australia. There was a lot of suspicion around Australian companies at the time, a feeling that they were forcing their big footprints onto New Zealand.
I treated my move to New Zealand as a working holiday - a wonderful opportunity to see another country and work at the same time. I loved my time in WA and I thought it would be the same here. However, my home life was more difficult because of New Zealand’s geography.
A trip to Gisborne from Auckland, for example, would not be as straightforward as it is now. Travel was time-consuming, and we didn't really have anyone in the South Island. And there was resistance from United to doing things the Ray White way. Even changing the name was difficult.
No one invested any money in the new name. They wouldn't buy pens, they wouldn't buy signage, they wouldn’t change their way of doing things. We started to ask ourselves how long this situation would last. But in 1998 I became CEO and the name was changed to Ray White just a year later.
Q: By this time you had done your two years. So clearly you had decided you were going to stay.
Actually, I hadn’t. One of the questions I was asked back then was, "How long are you going to stay?" I'm not sure if I’ve ever got round to answering it.
A pedestrian passes a Ray White office in Auckland. The agency now does 95% more auctions than a year ago. Photo / Fiona Goodall
Q: The Ray White brand in New Zealand feels like it has been around for longer than 20 years. That's probably testament to your work here. How do you think you have shaped Ray White in New Zealand?
Through the eyes of Brian White, to some degree. He's generous and personable. But our strategy has always remained the same: win the three biggest markets in New Zealand. I knew in 1999 that if we did that we’d eventually win New Zealand.
Q: Is there anything you would have done differently over those 20-odd years in charge?
There are many things I could have done differently, but I may not have learned as much. I've learnt that this is a personality driven business and the people who work in it have a lot of energy. But I've learned also that sometimes my decision-making was faster than it should have been. There’s no market leader across New Zealand. The market leader in Auckland is not the market leader in Wellington or Christchurch. And the fact that there is no one agency that leads in all markets is a great opportunity for us, still.
Q: I read that when you first came here you hadn't appreciated the differences between Australia and New Zealand. But you’ve lived and worked in New Zealand for more than 20 years. You're a Kiwi in every respect that probably matters. What does that mean to you?
My boys are all Kiwis. My life is here in New Zealand, and I don’t call Australia home any more. No one ever asks me if I'm going back home now. New Zealand is my home.
Q: In 2008 the Real Estate Authority (REA) shook up the industry. It moved the REA into a different role, and it has changed the nature of who gets employed. What's your thinking on that?
If someone regulates you, you can look at it as someone making you more relevant, or someone who's trying to disturb your business. Our behaviour as an industry was not what it should have been. In part that's because of the barriers put in place then by the governing body. Those barriers were not socially acceptable and they weren't acceptable for most of the industry.
Then you bring in the REA, or the REAA as it was known then. Suddenly there was a series of processes. It’s now 11 years later - it's only the grandfathered clauses or the people who have been in the industry for 15 years or more that would know how it used to be done. That gets less and less each year.
My belief in the REA comes from the fact that people want guidance. The industry used to list and sell 82 per cent of the market but the REA has made us relevant. Agents have become a more valued part of the process - today we sell 96 per cent of the market. People like developers will use us. Real estate agents have become relevant because their behaviour is better.
Q: There haven’t been any tweaks to the legislation since, so that would indicate it's worked.
Fair call. Except there's two parts to our business - one is property management, which remains unregulated. They've regulated the landlord to do a number of things, and they've regulated the agent. They've not regulated the client or the buyer because the agent is doing most of the transactions. They've regulated the landlord because they have the most exposure to the tenant. However, I think they will regulate the [property management] agency at some stage.
Smith: “My life is here in New Zealand, and I don’t call Australia home any more." Photo / Fiona Goodall
Q: What's your handle on government intervention in the market?
Interest rates used to be the sole driver. When they used to come down marginally, even from 15 per cent, that might have only been a five per cent drop in real terms. Fast forward and you watch interest rates come down from three per cent to 2.5, that's like a 25 or 30 per cent drop in real terms. So affordability is different. But then our exports or our dollar made progress, and that was used as a second leverage point. New Zealand was becoming more international. Obviously today there is much more leverage that the Government or the Reserve Bank looks at but interest rates are still a driver towards people's decision-making.
Q: Were you caught by surprise by the strength of the market after we came out of lockdown?
Yeah, definitely. We'd moved to a remote format of auctioneering - that was a closed environment where no one could see, and we couldn't put up a sold sign. There were no open homes but we were still holding auctions and we were still selling property. Some economists and opinion makers decided where the industry was going to go. That was particularly dangerous for us - I watched this day after day. There were a couple of companies who were close to the property industry, one being Bauer Media, who within three days of lockdown decided that 200 jobs had to go.
A lot of people were trying to minimize their exposure but we were still selling property. This surprised me. I was talking to our finance area, and they were still getting applications. There were a lot of changes between Level 4 and Level 3. The Real Estate Institute and the REA had different opinions on whether we were able to show property at Level 3. At Level 4 it was definitely a no, but at Level 3 one party would say ‘no inspections’ and the other would say ‘you’re right, you’ve got to be able to do inspections.’
The Government allowed us just two viewings per house per day and that created congestion. A property could have been sold yet a lot of people never even got a chance to look at it. It created a build-up of people urgently wanting to look at properties.
So the searches went up, and the morning emails from people wanting to look at property went up. Then, in Level 2, you were seeing open homes with 100 people going in. In the meantime, we had changed our media strategy - we decided to do a press release every day to the media.
Q: What was the pick-up on those like?
By real-time journalists, very good. We only covered what happened yesterday, what's happened today, and what might be happening tomorrow. We never moved outside those three days. We still do it now.
Q: What role do you think the media is currently playing on the debate around property?
The media has become more interested in what's happening with particular properties. Prices may have gone up in a particular region by this or that amount but it’s hard to visualise. If I know what has happened to the house up the road, across the street, it’s making marketing so important. Estimation sites are becoming very important too. When we sell a property at auction, we are getting a lot people asking, "What did it sell for?"
Q: There's a big debate over whether a property is worth what it sold for. There’s this shock-horror that the media tend to have, that a property had a CV of such and such and it sold for 80 or 90 per cent more than that. But there’s the argument that a property is simply worth what it sells for.
Auctions now are the accepted way. I think we're doing 95 per cent more auctions than at the same time two years ago. It's extraordinary. People are very comfortable with it.
Q: Fast forward three or four years and how will things look?
I'm concerned about the latest government intervention, and not because of investors. They miss the typical sentiment of who is a first-time buyer. When you say a first-time buyer, many people have this romantic notion that it's like the little house on the prairie - the couple buy their first home, supported by mom and dad. A first-home buyer could be that but normally they're the person that mom or dad, or someone else, is telling, "Just get into the market. Don't worry how you do it, please just get into it."
A lot of those people are being caught up in the investment. They might buy an apartment, they might buy a small house, they might have to go down to Huntly to buy something. They might have to go down to Lawrence in the lower South Island just to buy a property. But then they rent it out, so they're classified as an investor. I worry that the Government has put that first-home buyer into a second buyer classification. It means you can't use that first-home buyer leg-up they've given people because they’ve bought an investment.
Q: The market is still bigger than intervention, it's bigger than the changes that have taken place. It's been pretty consistent over that time. Do you see that continuing?
It's like you’ve got birds in the trees, then the Government fires some new policy into the trees and the birds fly away. Then they come back down and land. That tree might have grown a bit so they land in slightly different spots.
Q: What’s next for you in terms of the business and yourself?
The business is very much about succession, so ensuring the next generation of leaders are given the freedom to be part of Ray White is critical. We are a family business in a fourth generation, so you must teach and give to the next generation.
I need to make sure this business keeps rejuvenating, that it doesn't get lazy. I need to ensure it's got the ability to grow. I know what our business owners want. I know what sales people and probably managers want, and I know what the client wants.
Q: Have the boys gone into the business?
No, they’re still at school. They enjoy coming around with me and looking at signs and making sure things look good in the field. I still do the small things each weekend, contacting our new members and making sure their business is personalised.
