Real estate agents across the ditch are keeping a close eye on New Zealand’s property market as it paves the way with rising interest rates, falling house prices and slowing sales - but regardless of which side of the Tasman they are on, salespeople are still making the same “dumb” mistakes.
Real estate influencer and trainer Tom Panos spoke to OneRoof this week after announcing his real estate dumb awards for 2022 and said the dumbest thing happening in 2022 was some real estate agents not telling the truth about what is actually happening in the market.
The absolute dumbest thing a real estate agent can do, according to Panos, is talk up the market in a market wrap on or social media, but in the next breath tell clients to drop the price because the market is not so good.
“If you are a real estate agent, you have to make sure that your audio matches your video - that you are saying the same thing all the time that basically you just tell people the damn truth.”
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The second dumbest thing he’s seen some agents do is to try and protect the price.
“They try and stop the prices going down – that market is the market. An agent can’t protect price and sometime they try and protect their owners, but the market is the market they can’t control it.”
He’s also got no qualms about telling agents not to take on unrealistic clients or to even part ways with them if needed.
“The third thing is – and it’s very dumb – agents that list properties that are overpriced and their vendors are unmotivated. I mean what’s the point – you only get paid when a property sells and if you have got an unmotivated, unrealistic vendor the property won’t sell so they are wasting their time.”
Tom Panos in 2006 calls an auction in Sydney’s inner west. Photo / Getty Images
Honesty or the lack of it in the current market is also a key feature in his fourth award which he gave to real estate agents who overprice a property and then later tell the owner the bedrooms are too small or the kitchen needs too much work so they need to drop it.
“Well, you knew that when you listed it – you just can’t over price listings in this market because if you do you will end up not getting a listing, you will end up getting a liability.”
Panos said real estate agents are making those same dumb mistakes in both the New Zealand and Australian market. The only difference between the two countries, he said, is that New Zealand’s downturn started about three months before Australia’s so they have seen how the borrowing capacity drops each time the OCR rises and how it results in buyers having less money to spend on a house.
“If anything, Australians have been looking across to New Zealand because New Zealand started the rate rises before Australia did.
“So New Zealand has been a very good reference point and case study to see and what’s very clear is every time there’s a rate rise borrowing capacity drops and typically what has happened in both markets – in Australia and New Zealand – is borrowing capacity has dropped by 25% since the rate rises began.”
But based on previous trends and charts, Panos is confident the New Zealand property market will start to pick up in the second half of 2023 and that agents should hang in there.
Panos is confident the New Zealand market will pick up in the second half of next year. Photo / Supplied
“Don’t panic, hold on and remember your vendors are not losing money - they are just giving back some of the profits that were obviously unsustainable that were made during 2020 and 2021 during the Covid years.”
Instead of giving up, Panos said agents should be making sure they maintain or build their market share by getting in “people’s faces” and “making noises” before it picks up again.
“You don’t spend less on marketing; you actually spend more on marketing. You want to be more visible because you want to stand out to win out and you need to do it because when there’s less properties being sold what you’ve got to do is work out other ways you can market yourself and some of the key methods include social media, video and making sure that you are staying in contact with all your clients.”
In his opinion, there’s no such thing as a bad market for real estate agents as people transact in real estate due to lifestyle decisions and not for money.
“It’s either good for the buyer or it’s good for the vendor but if you are a real estate agent that knows how to put deals together, that’s got good product knowledge, that can deliver bad news in a positive way – you will always do good in all markets because most people that transact in real estate don’t do it for money, they do it for lifestyle purposes – bigger homes, smaller homes, there’s a death, there’s a divorce, relocation.”
