Real Estate Services in Australia
Industry Report
Real Estate Services in Australia
The Real Estate Services industry is forecast to expand over the next five years by 2.4% to $29.7B.
OVERVIEW
Residential housing prices are expected to rise, driving an increase in the number of housing transfers. However, forecast increases in loan rates and growing competition from digital competitors are anticipated to constrain revenue growth.
Strong consumer demand and higher sales prices will boost operators' commissions, although this increase will likely be offset by increased investment in technology to enhance their operations. Online listings are anticipated to increasingly compete with the industry's services, as they allow vendors to bypass real estate agents.
The commercial property market is anticipated to strengthen. Demand for office space is projected to increase as Australia continues to transition to a service-based economy. In addition, demand for industrial real estate is anticipated to grow marginally. Demand for retail space affiliated with food consumption, such as restaurants, cafes and bars, is likely to remain higher than demand in the wider retail property market.
Technological advancements are likely to increase the popularity of virtual property tours. Operators are also anticipated to adopt new application processes that incorporate customers' smartphones and dedicate more of their marketing budget to online initiatives.
External competition trends that have developed over the past five years, primarily relating to the digitisation of real estate services, are expected to continue. Several real estate advertising websites have caused controversy by using their increasing market power to raise advertising costs, using their data for free property valuations and approaching vendors directly to upsell advertisements. Some property operators have responded by withholding price advertisements from their websites, which has affected property valuation data. The industry's new operating environment will require firms to reassess their business models to ensure they retain a significant role in selling and managing property.
Employment is forecast to rise over the next five years, with many operators responding to rising competition by employing additional staff with greater expertise and technical knowledge to retain or win customers.
