Domain.com.au’s recent blog entry highlighted a trend amongst an industry and governments that have run out of ideas on how to make housing more affordable. REIA thinking goes that allowing first home buyers to dip into their super savings to purchase their first home will allow them to purchase their first home and relive some stress.

This does nothing to address affordability, all it does is allow people to purchase a home, which I suppose is REIA major reason for existence, more homes sold equals more happy agents, which is fair enough.

In my opinion the problem is much deeper than this and for every good reason the REIA can put up with this scheme, there are an equal amount of reasons why this doesn’t work or is detrimental to housing affordability. My advice to REIA is to just be honest and say we want more young people owning homes and we know it will may make homes cheaper.

There are many reasons why homes are unaffordable to the majority of young middle Australia, supply & demand, urban drift and personal debts are just a number of many.

The biggest issue to me is personal debt and as I have said in the past, an over-priced property market (sighs ensue) that does nothing to help agents. The higher the prices, the less buyers, mainly because of holding debts amongst the young and wages which have a long way to go to compete with these price rises.

So why the debt? Well today it is easy to get into debt, buy this car on credit, but this TV on credit, get an awesome mobile phone for 99 cents (on a plan) and the biggest one of all, education debt.

Since 1989 the Hawke-Keating Government introduced HECS and since then public education costs have sky-rocketed, but it is all ok, you can pay this back later. This scheme was met with student protests across Australia and the idea that the government could not afford public education anymore and the fact that both sides of government supported the idea made this an easy passage through parliament.

But think about this, what we now do is educate our kids early on that some debt is a good thing, these young adults then enter a workforce where renumeration have not even closely kept pace with inflation and property prices over the same period. The effect of this is threefold, fresh workforce members have little to no liquid income, have high debt and monthly costs and therefore cannot save nearly enough to afford a deposit on a home that 30 years ago got you a whole house and educational costs (because you pay it back later) just keep rising well above inflation.

Over the past decade I have seen every single dumb idea pass through the lips of many so called experts but literally no-one looks at the real problems, everything is a stop gap measure. “We need more land”, “we need more incentives”, “we need more high rise development”, “we need less taxes”, etc. Every one of these measures have made little to no real difference to the problems we face and unless we can finally have some guts and take a little medicine, nothing will change and it will only get worse for real estate agents. Institues have got to be honest instead of continuing to roll out the same old cliches and begin discussion with industry groups and governments to make real changes – some that will need some intestinal fortitude and will fly against conventional wisdom.

At some stage governments are also going to need to make big changes and negative gearing is just one issue amongst many that needs to be discussed openly and without scare tactics, free university education for your first degree must also come back onto the agenda and a massive investment in self sustainable kit homes that are pre-approved for addition to land in suburban outskirt areas and some investment in high speed rail also needs to be discussed, particularly in Melbourne and Sydney.

Personally, we will continue to just get the same old short term fixes, industry groups self promoting measures that will only aid in the short term and banks that will soon offer inter generational loans.

We deserve better, here endeth the rant!

Well what a year it has been, with just about every major company in the real estate and classifieds market vying for entry into this years awards.

So how do you make our dumb and dumber awards? Well quite simply, you make a schoolboy mistake, try to cover something up or worse still knowingly do something that is so obviously dumb to everyone else aside from your inner sanctum.

So here is our list for this year, enjoy!

1. WINNER – REA Group – Realestate.com.au

What do you do when one of your email servers have hundred’s of thousands’s of property email enquiries stuck and not delivered for months and months on end to real estate agents battling through tough times? Well for starters some bright spark decided we will just deliver them to agents who had no clue of the age of the emails! Once the story broke here on business2.com.au REA then went into damage control and placed a note in agent admin and then later sent out an email explaining the situation to unsuspecting agents. This left agents embarrassed – their reputations tarnished and having to apologise to ten’s of thousand’s of enquirers.

REA offered a heartfelt apology, discussed compensation, but decided to just weather the storm and continue business as usual. REA’s reputation for care has never been worse and will take a hell of a lot of work to win back agents trust. More price rises to come will not help their cause. Fluffy promotional emails will not do anything either, hard work, improved customer service and some humility will help.

2. RUNNER UP – PBL & Microsoft

Get a photo op with a bunch of Steve Jobs wannabes on launch, spend ten’s of millions of dollars marketing a website with out-of-date and sold listings, less than 30% of your rivals listings (and the same data), do buddy deals with a handful of the major franchise groups along with the worst real estate interface to come out of the 21st century and what do you get? Well you get them running scared and selling it off in 12 months for less than 3% of what they put into it. Still it has to be one of his better deals since he took over from daddy. If you want to know how NOT to build and launch a real estate portal, note the myhome.com.au debacle. The new owners are trying their best and have really got back to basics. May be worth the try now!

3. Major Telcos

Put together pathetic customers service, disgraceful data plans, slow networks and you have yourself a major Telco. Telstra may have the best wireless Internet in Australia, but it has the most expensive – restrictive plans around and Optus is not much better. It pays big time to look around. Maybe Telstra should spend some time and money on the people that make them money rather than trying to protect their monopoly. Optus does not fare much better and you only have to look into the Whirpool forums to see how many people loath their Telcos.

4. The Financial Meltdown

Oh, how we were once impressed by our finance market friends driving their Maserati’s and Porsches, how we listened to their amazing insights into how the money markets worked, how impressed we were about how they speculate and how their models make everyone rich and successful. Turns out they were all pretty much clueless, having fancy degrees on a wall means nothing if you don’t have real world smarts. If making money is your only goal then you will eventually fail, problem is – this time around everyone suffered.

It is ok to strive for an open market economy, but should mum and dads around the world have to bail them out when it all goes pear-shaped?

5. Get it ‘FREE’ Mobile Domain

SMS property alerts on your mobile, great idea and absolutely free – well free as in 0.55 cents an SMS. Ooops sorry forgot to mention that! ACCC noted this and slapped Fairfax over the knuckles.

6. REA’s Peak Industry Body

Way way back in March 2007 (nearly 2 years ago, REA setup ‘The Peak Industry Body’, this was no doubt an effort to ‘connect’ with you, ‘Joe the Plumber’, meeting ‘at least’ 6 times a year would equate to around 24 meetings so far. I think each meeting ended with a Hollowmen ‘steady as she goes approach’ because unless I am mistaken nothing has ever come out of this – except continual price rises

7. Internet Explorer

To every single software/website or so called IT expert that only works in Internet Explorer or in the latter case only only allows you to use IE6, hang your heads in shame. Every time I use Internet Explorer I am frustrated, whether it is testing sites in IE6 or 7 and now IE8.

The latest debacle for Internet Explorer came just a few days ago.

The vulnerability could allow remote code execution if a user views a specially crafted Web page using Internet Explorer. Users whose accounts are configured to have fewer user rights on the system could be less impacted than users who operate with administrative user rights. This security update is rated Critical for Internet Explorer 5.01, Internet Explorer 6, Internet Explorer 6 Service Pack 1, and Internet Explorer 7.

Basically anyone could access your PC and take anything they liked. Microsoft stated that it is always looking at ways to improve their product, no, they are always looking at ways to get it to at least work. One friend of mine lost $4,800 just yesterday and is scrambling to get it back because someone hacked their PC.

So free yourself from the train wreck of a browser which is Internet Explorer and jump with Firefox, Opera, Safari or Google Chrome and leave, buggy, slow, insecure software behind. If your software provider can’t cut it, then leave them behind as well.

Note: Also read some reviews on anti virus software and get it installed on all pc’s.

8. Why are we waiting?

Google needs to get its act together and release a solution that the whole market is waiting for. Every day I am asked the question and each day I have no answer. I know they are working on it – but come on guys and girls. Worldwide the advertisers market for a stand-alone real estate website from Google would be worth billions and billions of dollars of new advertising revenue.

9. Yellow Pages

Time to get a new advertising campaign, no one really cares about you any more and the campaigns warning us of impending financial gloom if we do not advertise with you just don’t cut it any more. Rising costs, hundreds of thousands of books dumped in rubbish bins or left rotting in the rain – and a business model that just plain sucks. And don’t get me started on Yellow Pages Online.

10. Newspapers

I love newspapers, I really do, they serve a great part of discussion in our community, but if you think articles about Nicole Kidman’s lips or Brad and Angelina are going to lift your readership think again. Newspapers need to rebuild their classifieds to suit a new market. Once upon a time agents pushed newspaper advertising for them, only a few do now and the market is getting smaller by the day. Keep this up and classified newspapers are finished. Simple test, get two people, one in a newspaper and one online to find a 3 bedroom 2 bathroom property in Wagga Wagga.

Solution?
1. Rebuild your classifieds for ease of use.
2. Offer annual subscriptions at a loss to build base readership – $10.
3. Get into real property journalism that gets people talking. (not paid for fluff promos)

11. New Real Estate Portals

So you want to help agents get away from REA and Domain? No you don’t, you want to make money and sell out to one or the other once you have some success. Oh and $10,000 you have committed does not build you a national portal – not even built off shore. So, stop telling me you care and how exciting your product is and do the hard yards, start local and build out, and your systems had better be good!

12. Kevin Rudd

Oh Kevin you had us all, you promised so much, you work long hours and impress us with grandiose words like ‘education revolution’. Here’s the thing, deep down inside you know you are boring, we do too, but we knew that already, we just want you to make a difference, we want some bold initiatives – not only for this industry but for Australia. In 2009 there is to be no more buck passing, no more ‘we are not immune’.

We didn’t know what cards you had, we thought it must have been good, 3 deuces in the hand? A straight? A full house? A flush? A straight flush? If we find out all you had was a piddly small pair – you will be out with the bathwater. So get down and dirty, make some bold reforms and get this country back on track.

13. Printed Local Property Guides

Every week about 24 local newspapers are dumped on our doorstep (we only have 12 apartments) and every week about 23 of them end up in the trash. You all thought it was a great idea to launch a property guide. How wrong it has all turned out to be. I will give you all less than 12 months. When vendors clearly say no to agents about advertising in local newspapers you know you are in trouble, my bet is that you will keep thinking you can turn it around.

14. Agent Websites

I spent a day trawling through agent websites randomly a few days ago. I looked at over 500 sites. Ouch, apart from seeing about 100 websites that are exactly the same (template sites), so many do not work in all major browsers. Here is a hint, if newspapers are no longer viable in this climate for marketing, where is your differentiator? Yes its your website! If you have a good one, then let every vendor know about it and ask them to compare. If you don’t – then you only have yourself to blame.

15. Vanity Blogging

Everyone is getting into blogging and you should be too. However steer clear of chest thumping and telling everyone how wonderful you and your company are – because no one is listening. Write about what you know and your opinions on the market, promote local businesses and get everyone involved. Welcome dissent, as long as it is not abusive or profane – promote it.

16. Vanity Boards

If agents need a pointer as to why some people think sign boards at the front of homes for sale and rent are more about the promoting real estate agents than the properties they are promoting then look no further than those ‘look at me boards’ promoting massive pictures of agents and in most cases nothing about the property. Ok, we get it, you absolutely love yourselves and it is cheaper than billboards but just let it go, the will to want to do it, should be enough of a sign that you have lost the plot.

17. Channels 7, 9,10

So you have your own little ratings system which bears no semblance to actual figures (good to keep that ad revenue coming in) however you are all finished unless you adapt. Showing old series just doesn’t cut it (a lot of people download the new series anyway), blatant chest thumping is so 1980′s and no innovation means a slow grinding death. Think about digital, get together, innovate with set top boxes supported by all and create a new market for direct localisation of ad serving.

18. Advertising Agencies

If you want to know who NOT to listen to when it comes to marketing your products or services just look at advertising agencies. I had a taste of them in the late 90′s and thought I would go through the process again, hoping they had learnt something about the Internet since then. I am not going to name the agencies, but if the group I met are any indication, stay well away, save your money and do it yourself!

19. James Packer

James oh James, what a business you inherited, tv networks, magazines, prime Internet locations, casinos and the list goes on. Here’s an idea, lets build a business our family empire will be proud of, lets dump just about everything we have built over the years and just get into gambling. What a noble business to be in and what a time to do it? We never cared to much about how rich you were, we liked Kerry, he was like one of us, we loved his stories (even if they were myths) and we liked you. If all you want to do is make money – then good luck to you – but you only have a few billion left buddy!

20. Mobile Agents Angst

So you have a local competitor that does not have an office (road warrior) – get over it. This is the 21st century and mobile agents working from home or on the road are going to be a lot more common over the coming years. If you use your office as a springboard to connect with vendors and buyers then you have nothing to worry about.

21. Real Estate Institutes

Can someone tell me what these organisations actually do?

A Merry Christmas and a Happy New Year to all of our readers, see you all again in 2009!

Property is the number one investment most Australians will make in their lifetimes. We have a national interest to make sure that homes are affordable and within reach of anyone who holds down a full time job. Going back 15 years or so there was no Internet and the majority of Australians purchased homes within their own area at the most their own state – in fact most people only new of home for sale in their own areas because of the limited reach of newspapers. I can remember driving around for a whole day searching for For Sale properties in my parents car, dropping into local agencies windows and having a peak.

Fast forward 15 years and we have the Internet, many people purchasing interstate and many more buying from outside their own areas. We now have more property investors than ever and a more savvy buyer market.

But where have we moved as far as rules and regulations? Each state government has it own rules governing the sale of properties, each government has a number of different rebates, taxes, duties that they provide/collect from buyers and sellers.

So what would it take to bring in some national regulations and strip some state authorities from their obligations? I am not advocating a complete strip down, but I am saying that anyone wishing to buy/sell a property through an agent should know what their rights are, and at present it is totally confusing and totally different from state to state.

I also think with the rise of private selling that will come into play over the next few years (maybe to 7-10%) there should be some regulations in place for anyone selling a property privately. The first thing we must do is to make sure as an industry that all parties are protected in these transactions.

Here are some things I think need addressing:

• National Regulations for advertising a listing – with Minimum Requirements.
• National Regulations for transparency in Negotiation of a Sale.
• National Regulations for disclosure – Full disclosure of Property History.
• Laws prohibiting auctioning Rental properties – Vendor must advertise a fixed price.
• National Regulations for Private Sales – Sellers must take a license test (online) and fill in all required forms prior to advertising.
• National Portal – A place where people can go to find out all of the taxes, duties, rebates for each state.

Now, I am going to be the first to put my hand up and say my experience with these things is minimal…I want a debate, vigorous and clean….I want to know who would fight against this and who would be for it….

Your thoughts?

The Internet has become such a power yet we see more and more traditional guides come into the market place by media companies hungry for increased revenues.

What the Agents need now is the Real Estate Institute of Australia and their state partners to begin an education blitz to consumers. This education blitz should be helping consumers to understand the importance the Internet plays. Traditional Real Estate Guides are now seen by many consumers as pointers – pointers to them wanting more information. Before the Internet came along a consumer would get the paper real estate guide and ring the agent for more information. This gave a certain amount of control to the agent. But today consumers read the paper based guides and then head off to the real estate sites (portals) for more information. Why is this? Well the first reason is because paper based guides are expensive and therefore real estate agents cannot simply place too much information about a property, the more information, the higher the cost.

The Internet however gives consumers so much more information (if used correctly) it costs only a few extra cents (data costs) to place unlimited photos, virtual tours, floor/block plans etc online. This gives the consumer all the information they need to make an informed decision as whether or not they pursue the property further. This means agents are more likely to get a call from a “hot” prospect rather than someone who just may be interested but needs more information.

So why is it that there are more traditional paper guides entering the marketplace? Money Money Money and bucket loads of it. It is simply a massive revenue stream that until recently has been mainly shared amongst two companies.

What the agents world needs now!
The agents need someone to take the lead, every agent should put their hands in their pockets and work with the real estate institute of Australia to get an awareness campaign happening and not through papers but on TV and nationwide. Tell consumers the benefits of advertising their listings online, what to look for when choosing an agency, how properties are presented online, the quality of the photography, the presentation of text content (copy) and the reach of an agents online marketing.

Do this and consumers will be more willing to consider online marketing as a large part of their advertising spend. I do not know for how long I have been advocating for the Institutes to get their act together and suggest fee structures for agents online advertising spends. This should be flexible, because their are new real estate portals popping up all over the place.

It should value not only popularity of sites but what the sites allow agents to do at a basic subscription level, are there photo restrictions? What are their fee structures? Do they allow for VR tours etc.

A big problem for me has always been the fact that real estate institutes know less about the Internet than most consumers and this will make it difficult. However they are starting to get the message.

The Internet for agents need not be owned by major media players, it is a question of control. Recently when News Ltd controlled realestate.com.au purchased property.com.au (for a cool 9 mill in cash and shares) many within the company thought it was game over. Now they have an impending nationwide launch of Just listed and something interesting in the wind with propertypage.com.au

Then you will have the rise of regional (locality based) newspaper portals and specialty portals such as commercialrealestate.com.au

Will it ever end? No and a good thing too, agents need to take control of the last advertising frontier they CAN control and that is the Internet. This will be the brand differentiator of the future and you can already see who are going to be the big winners and that is agents who are investing in their online future now.

Real Estate Institutes should be showing them the way. Every single Institute across Australia should be shedding their preferences for portals through website sponsorship deals and working for the benefit of their members. They should also be ditching once and for all the one sided seminars that some of these major portals are giving agents with the backing of the Institutes.

Every single institute across Australia should have a position available for an Internet Advisor, someone agents can call for impartial advice.

“The times they are a changin”