Media Release – 10 September 2010

Speaking at the First National Commercial conference at Hyatt Sanctuary Cove, BIS Shrapnel senior projects manager Maria Lee today forecasted good times ahead for the Australian commercial real estate market, despite the expectation of continuing bad news from the US and European markets over the next few years.

‘Recovery is already underway and the markets have had their shakeout. The risks of overvaluation are gone and most property sectors are now undervalued. Instead, there is now the prospect of rising, not falling prices over the next few years’ says Ms Lee.

After a round of equity raisings last year, major investors have recapitalised, reduced their debt levels, and building has virtually stopped. While the risk of oversupply has not entirely disappeared, they’ve greatly diminished.

Many commercial property markets have seen peak vacancy rates now and are in recovery mode. With very little supply underway, the risk of oversupply is unlikely to arise again for quite some time. This means good times ahead for commercial property as leasing and investment markets recover and there will be some great business opportunities for commercial agents.

European and US economies are anticipated to stay weak for quite a long time so people shouldn’t be disturbed by bad news emanating from those sources. We’re now much more closely aligned with Asia and Asia’s doing well.

Maria Lee characterises the office market as being similar to the 50 metre race for a group of under sixes.

‘They’re all lined up on the start, waiting for the gun. The gun sounds; some children head straight down the course – they know where they’re going. Some are blocking their ears because they don’t like the sound of the starting gun, then, with a delayed reaction, they set off down the course as well. But, there are always a few children who set off in the wrong direction but eventually they do all reach the finish line.

‘So in the office market race, Melbourne is the front-runner. Sydney and Adelaide are heading in the right direction; Canberra has definitely taken a step backwards. Brisbane and Perth look as though they are heading in the wrong direction at the moment. However, the point is that they’re all going to get to the finish line but it’s just a question of timing’.

Office markets around Australia are already, or shortly will be entering, an upswing phase of the cycle. The key to recovery is lack of supply, which is not expected to pick up soon because there are too many obstacles. Rents are too low, yields are too soft, finance is expensive and difficult to get hold of, and although tenant demand has picked up, it is still difficult to secure sufficient tenant pre-commitments to get a building over the line.

Supply is not expected to really kick in until between 2012 and 2014/15, in some markets. On average, supply is unlikely to catch up to demand until mid-decade at the earliest, so there will be a sustained period of tightening markets and rising rents.

The scene is set for substantial rises in capital values over the next five to seven years.

Underlying demand for industrial property is recovering. Businesses are re-stocking, import and export activity has picked up, and that bodes well for warehouse space. Meanwhile manufacturing has troughed but manufacturing output is forecast to grow more quickly over the next five years than it did over the last five, which also bodes well for the demand for factory space.

Firming yields were the main driver capital gain in the retail sector until 2007, however yields have since softened by about 95 basis points for regional shopping centres, 180 basis points for sub-regional centers, and a little bit less than that for neighbourhood centres.

Retail yields are not expected to firm back to 2007 levels because yields firmed too far in the run up to 2007. What we are now seeing is an unwinding of previous over firming. The forecast is for a mild firming and then cycling within a fairly narrow band. Strong returns will not been seen from the yields side so the emphasis will shift to shopping centres incomes and growing those incomes.

‘In the run up to 2007 you didn’t need to be an expert at retail management, now expertise is needed. For those who have the expertise, there will be good buying opportunities because prices have come off and there will also be mismanaged centres to pick up and good development opportunities.

‘There should be great opportunities for agents to assist landlords and their tenants in leasing space as demand recovers, and also to broker investment deals as property fundamentals continue to improve so we can look forward to much more idyllic surroundings for the next few years at least’.

Issued by: First National Real Estate

For further information contact Stewart Bunn, National Communications Manager, First National Commercial on 0413 624 317

The team from Bushby First National Real Estate

Bushby First National Real Estate has won three major Real Estate Institute of Tasmania awards.

Once again demonstrating its property management prowess, the Launceston First National office won Property Manager of the Year, Residential Salesperson of the Year (Paul Flanagan) and got two gongs for innovation – one from the REIT and another two days later from the Launceston Chamber of Commerce.

Bushby First National stakes the claim as first Tasmanian office to implement QR Codes on its signboards. QR Codes are similar to the familiar bar codes used in supermarkets but are larger and allow more information to be stored. Using an Internet enabled smartphone, consumers photograph the QR Code to be linked to more information about a property.

Congratulations Bushby First National.

First National Webbers (Caloundra, QLD) has set itself the goal of raising $100,000 before the end of December to build a children’s orphanage in Uganda. The First National office has already raised $32,000 towards the ‘Children’s Village’.

Thousands of Ugandan children have no home, family, or chance of education. First National Webbers plans to build the orphanage with bare hands, next January, on 10 acres of land that has already been purchased by another community group. Support is needed in the form of volunteers willing to pay their fares and accommodation, then assist with the project, either by cooking and cleaning, caring for the young ones, or helping build. A post-construction safari has been arranged as a reward for the hard work of those that contribute.

Visit http://www.thechildrensvillage.org.au/ for more information or to make a donation. Or, contact First National Webbers principal Robert Webber on 0412 723 457.

First National Webbers (Caloundra, QLD) has set itself the goal of raising $100,000 before the end of December to build a children’s orphanage in Uganda. The First National office has already raised $32,000 towards the ‘Children’s Village’.

Thousands of Ugandan children have no home, family, or chance of education. First National Webbers plans to build the orphanage with bare hands, next January, on 10 acres of land that has already been purchased by another community group. Support is needed in the form of volunteers willing to pay their fares and accommodation, then assist with the project, either by cooking and cleaning, caring for the young ones, or helping build. A post-construction safari has been arranged as a reward for the hard work of those that contribute.

Visit http://www.thechildrensvillage.org.au/ for more information or to make a donation. Or, contact First National Webbers principal Robert Webber on 0412 723 457.

The Australian Housing and Urban Research Institute recently completed a survey of 1604 older home owners and found that they’re about as keen on moving house as getting divorced, their partner dying, or finding themselves imprisoned.

The important findings make it clear that if government is hoping for any relief from older Australians to its housing supply problems, it can look elsewhere. Ninety per cent of them believe their home is just the right size for them, even after their children have moved out. So, government will just have to put its planning and policy thinking cap back on because its current assumptions are wrong.

Australian homes are considered big by international standards. Take the Canadian view, for instance. Applying that government’s calculation of housing occupants to housing size and composition shows that 88 per cent of Aussie homes are grossly under-occupied and hence under-utilised.

Older Australians live as singles or couples in houses with three or more bedrooms and they own their homes outright. If just 20 per cent of Baby Boomers were to downsize into smaller accommodation, the vexing housing supply problem would be solved.

Over 55 year olds make up 25 per cent of Australia’s population – that’s 5.6 million people. Over 65 year olds make up a further 13 per cent – 2.9 million people. The over 65 component will grow to 19 per cent by 2021 and when you add the figures together it’s not hard to see that the problem, with immigration thrown into the mix, is getting worse.

To avoid moving into retirement villages or into their children’s homes, which they find ‘distinctly unappealing’, older Australians plan to alter their homes, installing grab rails and ramps so they can stay put. Less than 20 per cent are willing to consider downsizing.

The Australian Bureau of Statistics says there will be between 9.4 and 10 million households by 2021, but that’s reliant on houses being built faster than the population is currently growing. At current rates, it’s possible that close to 20 per cent of Australia’s larger housing stock will be inaccessible to first home buyers, young families or investors.

Adding to the complexity, 1.7 million people own two, three or more properties and Baby Boomers are overrepresented. They, however, have no intentions of downsizing, considering those extra bedrooms ideal for other recreational pursuits and the accommodation of visiting relatives and friends. Plus, instead of passing on that wealth to their children, Baby Boomers intend upon selling their investments and spending the money, so the homeownership will not necessarily be passed to offspring.

Homeownership among young people is falling and this is not a new trend. Australia is certainly one of the most expensive places in the world to buy a house and the chronic shortage of homes means rents will simply continue to increase.

Planners are increasing housing densities and encouraging smaller apartment-style dwellings to cater for a perceived demand that it appears does not exist amongst older homeowners. Perhaps it shouldn’t surprise government when it has been long known that Australians love their traditional quarter acre block, the back yard barbecue and, increasingly, a vegetable patch.

It is Australian families as well as immigrants of the future who will probably occupy inner city and middle suburban ring apartments, which, most likely, will be owned by others.

The Australian Housing and Urban Research Institute recently completed a survey of 1604 older home owners and found that they’re about as keen on moving house as getting divorced, their partner dying, or finding themselves imprisoned.

The important findings make it clear that if government is hoping for any relief from older Australians to its housing supply problems, it can look elsewhere. Ninety per cent of them believe their home is just the right size for them, even after their children have moved out. So, government will just have to put its planning and policy thinking cap back on because its current assumptions are wrong.

Australian homes are considered big by international standards. Take the Canadian view, for instance. Applying that government’s calculation of housing occupants to housing size and composition shows that 88 per cent of Aussie homes are grossly under-occupied and hence under-utilised.

Older Australians live as singles or couples in houses with three or more bedrooms and they own their homes outright. If just 20 per cent of Baby Boomers were to downsize into smaller accommodation, the vexing housing supply problem would be solved.

Over 55 year olds make up 25 per cent of Australia’s population – that’s 5.6 million people. Over 65 year olds make up a further 13 per cent – 2.9 million people. The over 65 component will grow to 19 per cent by 2021 and when you add the figures together it’s not hard to see that the problem, with immigration thrown into the mix, is getting worse.

To avoid moving into retirement villages or into their children’s homes, which they find ‘distinctly unappealing’, older Australians plan to alter their homes, installing grab rails and ramps so they can stay put. Less than 20 per cent are willing to consider downsizing.

The Australian Bureau of Statistics says there will be between 9.4 and 10 million households by 2021, but that’s reliant on houses being built faster than the population is currently growing. At current rates, it’s possible that close to 20 per cent of Australia’s larger housing stock will be inaccessible to first home buyers, young families or investors.

Adding to the complexity, 1.7 million people own two, three or more properties and Baby Boomers are overrepresented. They, however, have no intentions of downsizing, considering those extra bedrooms ideal for other recreational pursuits and the accommodation of visiting relatives and friends. Plus, instead of passing on that wealth to their children, Baby Boomers intend upon selling their investments and spending the money, so the homeownership will not necessarily be passed to offspring.

Homeownership among young people is falling and this is not a new trend. Australia is certainly one of the most expensive places in the world to buy a house and the chronic shortage of homes means rents will simply continue to increase.

Planners are increasing housing densities and encouraging smaller apartment-style dwellings to cater for a perceived demand that it appears does not exist amongst older homeowners. Perhaps it shouldn’t surprise government when it has been long known that Australians love their traditional quarter acre block, the back yard barbecue and, increasingly, a vegetable patch.

It is Australian families as well as immigrants of the future who will probably occupy inner city and middle suburban ring apartments, which, most likely, will be owned by others.

This Thursday, First National estate agents are heading to Hyatt Regency, Sanctuary Cove for the network’s annual commercial conference.

With a sharp new brand and renewed momentum, First National Commercial has grown considerably this year, adding 10 offices to its national network already. Another two will join within the next two weeks!

The conference will bring together keynote presentations from BIS Shrapnel, Westpac, and a series of business contemporaries from professions including law, human resources, commercial real estate development, sustainable building designers and marketing strategy.

First National Commercial helps First National residential members seed additional income streams, thereby strengthening their businesses. Major commercial brands are chiefly centered in capital cities but the suburbs are where First National Real Estate holds an advantage. The vast bulk of Australian commercial property is situated not in high-rise office towers but suburban shopping strips. First National’s spread of residential agencies throughout Australian suburbs places First National Commercial in a unique position as its growth rate makes it one of Australia’s most prolific commercial brands.

One of First National's latest search engine optimised websites

First National’s Chief Executive Ray Ellis has commented on the critical importance of real estate website search engine ranking, saying Australian consumers should take a closer look at their agent’s websites.

‘While many homeowners understand that the Internet is now a crucial component of marketing when the time comes to sell, how many of them actually check an estate agency’s Google ranking before signing up with their agent’ says Mr Ellis.

It’s now a well accepted fact that nine out of ten people start their search for a new home using the internet. While the major real estate portals like realestate.com.au and domain.com.au may seem like a logical starting point to many consumers, more people start out by entering the name of the suburb plus the words ‘real estate’ in a search engine like Google.

‘This is where the results get interesting’ says Mr Ellis.

‘One prominent real estate brand markets itself to Australians with the promise that its brand is “searched more often than any other real estate brand” but the evidence shows that it just isn’t being found. Consumers need to be wary of listing with agents who have an ineffective Internet strategy as their home may not receive the exposure it needs to maximise its price.

‘A common mistake is making the assumption that the agent with the most advertising in the local newspaper will achieve the best result. First National Real Estate’s research shows nothing exceeds the importance of Internet marketing and the ranking an agent’s website receives when it comes to maximising price. The vast majority of buyers find our listings online so agents must work to achieve page one search engine results for their website’ says Mr Ellis.

Business Review Weekly conducted a review of Australia’s top 30 real estate brands in 2009. The websites of those brands were then subjected to an independent assessment that found First National Real Estate was number one at marketing its listings in a way that attracts a maximum of exposure.

Those in the know refer to ‘Inbound Marketing’ as the Holy Grail of search engine optimisation. To the merely mortal, ‘Inbound Marketing’ loosely translates to the steps an entity takes to attract ‘views’ or ‘hits’ to its website. The more hits for real estate agents, the more sales. The major real estate brands are therefore locked in a pitch fork battle as they vie for supremacy, and the stakes are high!

‘Newspaper advertising volume once helped major brands retain their coveted prominence but First National Real Estate recognised six years ago that print media was a battle of the past and that it had to revolutionise its Internet strategy if it were to deliver the greatest value to its customers’ says Mr Ellis.

The network terminated its former web-hosting alliance partner in 2004 and set about building a completely different approach to website management.

‘We listened to the best and brightest in the website design profession and we also consulted our own agents to craft the most flexible, user friendly, search engine visible websites in the profession. Our strategy is quite simply the most effective in Australia right now.

‘When the director of another major brand writes to his franchisees, as took place this week, acknowledging the brand’s search results are “hopeless” and that they are not the dominant force online that they feel they should be, it underlines just how careful consumers need to be when choosing their agent’.

One of First National's latest search engine optimised websites

First National’s Chief Executive Ray Ellis has commented on the critical importance of real estate website search engine ranking, saying Australian consumers should take a closer look at their agent’s websites.

‘While many homeowners understand that the Internet is now a crucial component of marketing when the time comes to sell, how many of them actually check an estate agency’s Google ranking before signing up with their agent’ says Mr Ellis.

It’s now a well accepted fact that nine out of ten people start their search for a new home using the internet. While the major real estate portals like realestate.com.au and domain.com.au may seem like a logical starting point to many consumers, more people start out by entering the name of the suburb plus the words ‘real estate’ in a search engine like Google.

‘This is where the results get interesting’ says Mr Ellis.

‘One prominent real estate brand markets itself to Australians with the promise that its brand is “searched more often than any other real estate brand” but the evidence shows that it just isn’t being found. Consumers need to be wary of listing with agents who have an ineffective Internet strategy as their home may not receive the exposure it needs to maximise its price.

‘A common mistake is making the assumption that the agent with the most advertising in the local newspaper will achieve the best result. First National Real Estate’s research shows nothing exceeds the importance of Internet marketing and the ranking an agent’s website receives when it comes to maximising price. The vast majority of buyers find our listings online so agents must work to achieve page one search engine results for their website’ says Mr Ellis.

Business Review Weekly conducted a review of Australia’s top 30 real estate brands in 2009. The websites of those brands were then subjected to an independent assessment that found First National Real Estate was number one at marketing its listings in a way that attracts a maximum of exposure.

Those in the know refer to ‘Inbound Marketing’ as the Holy Grail of search engine optimisation. To the merely mortal, ‘Inbound Marketing’ loosely translates to the steps an entity takes to attract ‘views’ or ‘hits’ to its website. The more hits for real estate agents, the more sales. The major real estate brands are therefore locked in a pitch fork battle as they vie for supremacy, and the stakes are high!

‘Newspaper advertising volume once helped major brands retain their coveted prominence but First National Real Estate recognised six years ago that print media was a battle of the past and that it had to revolutionise its Internet strategy if it were to deliver the greatest value to its customers’ says Mr Ellis.

The network terminated its former web-hosting alliance partner in 2004 and set about building a completely different approach to website management.

‘We listened to the best and brightest in the website design profession and we also consulted our own agents to craft the most flexible, user friendly, search engine visible websites in the profession. Our strategy is quite simply the most effective in Australia right now.

‘When the director of another major brand writes to his franchisees, as took place this week, acknowledging the brand’s search results are “hopeless” and that they are not the dominant force online that they feel they should be, it underlines just how careful consumers need to be when choosing their agent’.

Media Release – 1 Sept 2010

With the election and winter behind us, the property market is once again set to spring into action.  Increased buyer activity, improved market conditions and stronger competition means those seeking a top price for their property have to work extra hard to catch buyers’ attention.

According to Stewart Bunn, National Communications Manager, First National Real Estate, money can be made with plants, shrubs and trees, especially with Spring in the air. So, now is the time for seeds to be sown and money to take root.

“Home owners should never underestimate the importance of landscaping a property to maximise the value of their home,” Mr Bunn said.

“Street appeal, especially landscaping, has the potential to add up to 10 per cent, or more, to an achievable sale price of a property.

“Make first impressions count starting from the letterbox. Make sure fences, gutters, paths and gardens are well maintained and make the right type of statement about your property.

“Then, stand at the front of your yard where a potential buyer will first set eyes on your property and cast a critical eye over it to see what improvements can be made.”

Mr Bunn says a rule to remember is to keep things simple, allowing buyers to feel they can add their own touch to a garden.

“Remove any personal aspects such as fairy lights which, while helping to create an ambience at night time for outside gatherings, can interfere with a buyer’s perception of what they may wish to design,” Mr Bunn said.

According to Mr Bunn, more and more buyers are seeking native drought tolerant gardens, which are best planted in springtime.  But, he cautions, make sure you know your product.

“Design the garden for the market you are selling to.  If it’s a family home, make sure there is plenty of room and grass, for the kids to run around.”

Cottage gardens with flowering shrubs and long blooming perennials are great for country style homes, while desert type plants finished with pebbles or river rocks are an excellent way to finish a Mediterranean style property.

Another tip, Mr Bunn said is to add colour, which can be added with the use of flowers and foliage plants, and tend to suit more contemporary homes.

“Your local garden centre is the best place to go for advice on the types of plants that will suit the positioning and soil type in the local area,” Mr Bunn said.

“Colour is also an excellent means of creating or reflecting moods.

“Softer cool colours such as blue, lavender and pink are ideal for relaxing areas of the garden, while yellow is a happy colour and provides a welcoming vista for visitors.

“Reds and oranges are perfect for tropical gardens and in areas generally used for family fun and high activity.”

An effective, yet inexpensive, way of sprucing up a garden is weeding, trimming and edging, applying a layer of mulch to finish it off and clearing away unsightly eyesores and toys.

“Mulch immediately neatens up the garden and is especially useful on sites that have not been particularly well prepared or where the ground is a little uneven,” Mr Bunn said.

“For an immediate tidy up, mow the lawn, pressure-clean paths and the outside of the house and put away belongings or children’s toys.”