The founder and CEO of One Agency has warned real estate professionals to start preparing for a very different and possibly slower market in 2022.
Paul Davies’ forecast, based on numerous indicators, price growth may slow in 2022. Traditionally, first in the capital cities and then the regions, and that days on market, accordingly, would increase. As a result, agents and principals will have to manage an environment with less turnover.
Mr Davies gave five reasons why he expected a slowdown in 2022.
“More stock is reportedly already coming onto the market. That means buyers can be more discerning and won’t have the same fear of missing out (FOMO) they experienced throughout 2021,” he said.
“Finance will become harder to get and more expensive. APRA tightened lending criteria in late 2021 and might do more tightening in 2022. Meanwhile, interest rates are likely to drift higher, continuing a trend that started in late 2021”.
“At the same time, there will be more talk about the Reserve Bank increasing the cash rate. That will be enough to dampen buyer confidence – even if the rate rise fails to occur.”
Mr Davies said the 2022 federal election would also negatively affect the market.
“If there’s one thing I’ve learned during my half-century in real estate, it’s that a lot of buyers suspend their decision-making before and after an election, as they wait to see how things will play out,” he said.
“We will also have to contend with an unstable international environment, due to the ever-changing covid situation”.
“One or two of these factors alone would be enough to cause a slowdown. But when you put all five of these factors together, you can see why I’m expecting market conditions in 2022 to be very different to those of 2021.”
How to prepare for a 2022 slowdown
Mr Davies said he had been telling One Agency members throughout Australasia to not only expect change in 2022 but prepare for it.
He forecast that the average office and agent would probably experience less turnover in 2022 than 2021. As a result, he said real estate professionals should watch expenses carefully when sales volumes may decrease.
“There are two significant ways to save money. First, relocate to an office off the main street, or even a virtual office. Second, switch to a group like One Agency that doesn’t charge franchise fees” he said.
“Other ways to save money include shopping around for insurance, internet phone and electricity; cutting unnecessary subscriptions; and refinancing your loans.”
Mr Davies said that if agents and principals followed this advice, they could have a profitable 2022, even if the market turned against them.
Also, while real estate can involve long hours, there’s often some flexibility in when you do those hours, which means, if you’re a working mum, you can make time to do school drop-offs and attend school functions.”
One Agency CEO Paul Davies said he loves the fact that One Agency not only has a lot of successful female business owners, but that they’re willing to go out of their way to mentor other prospective female licensees.
“The real estate industry has made a lot of improvements in gender equality during my 40-plus years in the industry, but we still have some way to go,” he said.
“The fastest way to close the gap is for more women to become principals, because then it inspires other women to follow the same path.
“That’s why I’m so happy that One Agency’s female business owners are helping other women step up to leadership positions.”
Paul Davies is the founder and CEO of One Agency, which has more than 150 businesses throughout Australasia. During his 40-plus years in the industry, Paul’s biggest single insight is: it’s not what you make, it’s what you keep that counts.
If you love what you do but want to make a change – either to keep more of what you earn, shift to a more lifestyle focused operation and reduce running costs; I invite you to contact me at One Agency and discuss confidentially how our model, (less than $1000 + GST per month regardless of your GCI) may be just the answer to breathe new life into your career and future proof yourself.
“It’s not what you make, it’s what you keep that counts.”
‒ Paul Davies, Founder and CEO
Revised edition: Written by our Founder and CEO Paul Davies with a foreword by leading real estate coach and trainer Tom Panos, ‘How To Profit In Real Estate Business Ownership’ is compulsive reading for established and aspiring agents looking for a way to achieve success and maximise fee retention.
As founder and CEO of the fastest growing real estate network across Australasia, I offer real estate professionals an opportunity to reap the financial rewards of going it alone with the security and clout of an established brand. Talk to me and my team about your options.
Back to top
Back to top
One Agency is a revolution in real estate, empowering both individual real estate professionals and established agencies to take control of their future and bring an entirely new level of service to clients.
