28/09/2011 - 11:01

Home-grown growth a focus for agents

28/09/2011 - 11:01

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Home-grown growth a focus for agents

AFTER a period of post-GFC consolidation, Perth’s top real estate agents are looking to expand their footprint in the local market when positive sentiment returns across the board.

Professionals Real Estate Group has taken out the top spot as the largest real estate agent in Western Australia in an update of the WA Business News ‘Book of Lists’.

During the past three years, the company has grown its offices in WA from 60 to 62, and has more than 702 staff statewide. However it has consolidated its offices in the eastern states from 306 in 2008 to 271 this year.

Professionals Real Estate Group CEO for WA & NT David Hobbs said the company’s property management services had allowed it to continue to grow during the GFC years.

“Our saviour is property management, that is where our cash flow has enabled us to grow; if you’re reliant on sales alone that would be really tough now compared to back in the heyday of 2007,” Mr Hobbs said. 

With the largest number of WA offices of any real estate agent, Mr Hobbs is cautious about further expansion.  

“We are looking to expand our presence in WA, but under our current business model we can only get to about 70, we don’t want offices walking on top of each other and we don’t go and drop offices next to other offices,” Mr Hobbs told WA Business News

Rather than further increasing its presence in the Perth metro area, Mr Hobbs plans to expand the business into WA’s north-west. 

“We would like to expand a little bit more into Port Hedland; there are $167 billion of mining projects up that neck of the woods and our Karratha office has rental properties that are getting $2,500 a fortnight up there,” he said. 

LJ Hooker is in third spot with 35 offices in WA and 658 offices interstate. 

Although the company has decreased both its WA and east coast presence since the height of the boom in 2007, LJ Hooker state manager Brian Reid is focused on expanding on the company’s offering in WA. 

“We are going through a period of consolidation, but we are also looking to expand and WA, particularly Perth is one of those key markets where we are looking to expand our footprint,” Mr Reid said. 

He said WA was better positioned than any other state to take advantage of an upturn in the market, which he predicted would occur in the first or second quarter of next year.

“The yields in Perth are the highest in the country, with the exception of Darwin … and the mining boom will start to translate in terms of dollars moving to the service sector, which will then translate to more people having more money to spend in the property sector here in Perth,” Mr Reid said. 

Seventh on the list, Remax WA has increased its WA presence from 11 to 15 offices and its east coast offering from 78 to 90 offices, since the end of 2007.

Despite embarking on an expansion plan locally and interstate, Remax WA managing director Geoff Baldwin said he understood why so many real estate agents were consolidating their operations. 

“In my 25 years in real estate, the last two years is the toughest market that I’ve seen … and they [agents] just aren’t doing as much business as they were doing a couple of years ago,” he said. 

Mr Baldwin said the oversupply of properties, coupled with uncertainty about interest rates and the economy, had caused many real estate businesses to suffer.

“There are over 18,000 houses on the market in Perth and only 1,000 a month selling, so each buyer has a choice of 18 properties; because of that choice, people are holding off on buying,” he said. 

By way of contrast, Perth-based Blackburne Property Group, which is 11th on this year’s list, has decided to consolidate its operations, particularly in other states.

With an office in WA and others in Melbourne and Brisbane, Blackburne Property Group managing director Paul Blackburne said the company did not intend to expand any further. 

“The mistake we made in 2007 was that we tried to get too big; we had almost 100 staff and that was fine in the boom times of 2006 to 2008, but the world changed when the GFC hit in 2008,” he said. 

“So we redefined our business model to come back to 50 staff and now we have a much more efficient model, which is what we have focused on since 2009.”

In addition, Mr Blackburne said the company had shifted its focus back to the WA property market. 

“We shifted our focus back from the east coast because the east coast markets were difficult,” he said.

“We still have offices over there, but WA is where the wealth is, where the equity is and where the income is, and we know this state very well.”

 

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