by Ray White Group Joint Chairman Brian White
There is one constant feature that occurs at the end of each calendar year – forecasters predicting what’s going to happen in the following year!! These forecasts have been happening for some months. Invariably, they’ve been bearish with a lot of attention being placed on the ability of Sydney to sustain its remarkable momentum together with its fellow teammate – Melbourne.
As always, we awaited our December figures as, ‘the best guide to what will happen in 2016’. There have been enough warnings of a market change – enough time for people to respond. It’s a great yard-stick.
So what happened in December? Overall, our markets held up remarkably well coming in at $3.3billion, less than $100million below our December 2014 result. The December 2015 result however was a bit differently distributed than last year. Victoria had its best December month ever – just missing half a billion dollars. Queensland, with over $700million was right up there with their best – indeed, Brisbane seems to be the most popular pick for forecasters in 2016. The traditional comment being – Brisbane finally gets pulled along by the slipstream of Sydney and Melbourne and then takes off on a life of its own.
Our New Zealand numbers were steady at $677million. Pleasing numbers from South Australia which held up to its long term average (what happened to the so-called South Australian problems in its car making and shipbuilding industries?). Could it be that Adelaide proves when values have not increased dramatically, a good continuing steady market is the result? Some renewed signs of activity in Perth were promising. Indeed the prices have adjusted so much in Perth that people are seeing this as an opportunity to commit.
One of the big features of our December results was the continuing strength of the inner city strongholds. Our Double Bay business achieved just under $90million for the month, and combined with Remuera in central Auckland with its $60million together with Ponsonby at $40million. These are big numbers for any month and confounded predictions that the bigger priced suburbs would be the ones more likely to suffer in any reversal in the market.
Despite the year coming to a close, activity in the commercial sectors remained buoyant. Both domestic and foreign private investors made a run to Christmas actively pursuing a number of leased investment properties. Both Auction and expressions of interest campaigns across metropolitan and regional areas of NSW and QLD were successful in putting further pressure on an already tight yield environment.
The Sydney residential development market continued to steam through with a number of sites exchanging in Western Sydney for future development. Andrew Jolliffe, from the Hotels NSW team ended the year with an off market transaction for The Banksia Hotel; a compelling investment for both hoteliers and developers given its site area and advantageous location.
Our partners at Loan Market lodged nearly $900 million in December with close to $800 million in settlements. Victoria was the best performing state with NSW as a very close second, achieving settlements of $238 million and $235 million respectively.
What’s new at Ray White?
‘Raise More Hands’ is set to be one of the biggest marketing initiatives ever undertaken by the Ray White group. At the end of February (culminating with one of the traditionally strongest market periods of the year) we will see hundreds of properties go to auction in a coordinated market campaign.
On the last Sunday in February, every News Limited publication will have a colour liftout for all properties that have joined our ‘Raise More Hands’ campaign. REA have come on board to offer readers a truly unique experience incorporated augmented reality to lift each advertised property off the page. Now every vendor will know their property will have the broadest marketing exposure ever undertaken in this country. Your local Ray White agent has all the details.
2016 promises to be an absorbing year for the real estate industry. One of the company’s competitors has now been publicly listed with another in the final stages of its planning for a public listing early in 2016. What impact will this have on the industry?
Back to the immediate market – and the Group’s resort offices are leading up to their traditionally big January marketing campaigns. ‘The Event’ is the key focus for the Surfers Paradise Group which, this January, will present over 110 auctions of first class property on the Gold Coast. Other Ray White Gold Coast offices with substantial marketing campaigns include Runaway Bay and the Coolangatta region on the southern end of the Gold Coast. Broadbeach, Palm Beach and Mermaid Beach also have big campaigns running. The initial response has been strong; another harbinger for what’s likely to happen in 2016.
Ray White intends to take advantage of the new enthusiasm for print media companies to produce high quality print products. Already the Gold Coast Bulletin is adopting a ‘gloss’ product which makes properties stand out so much more clearly. An analysis of Ray White offices during the past several years shows the benefit to businesses who are offering a broad range of marketing initiatives – all designed to improve the interest from the market in a particular property which always has such a positive impact on the final price.
2016 is also an important year for the development of Ray White’s specialist activities. We enter 2016 with more properties for our projects division than ever before; they’ve got 500 individual units about to be launched. Our hotels division is now ranked as one of the major forces in the country, some important recruitment initiatives in the broad commercial space are soon to be announced and Ray White Marine has also had its best year ever.
Recent editions of the White Paper have commented on the expanding opportunities the Group has beyond Australia and particularly in China, and new announcements are due to be made soon.
Finally, we once again offer a warm welcome to our 63 new offices who joined us in 2015, and we look forward to another big year in real estate.