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Last month, Westpac’s chief economist Bill Evans shocked industry pundits when he predicted a one per cent rate cut
Falling consumer confidence and a soft property market will force the RBA to consider its “mildly restrictive” rate policy, Mr Evans said.
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But while consumer confidence is falling and property prices are flat, there have been no indications from the Reserve Bank to suggest they may cut rates by up to one per cent in the next six months.
In fact, the reverse is quite true.
During a recent speech governor Glenn Stevens said he remained “optimistic” about the future and assured Australians that “consumer spending would return”.
But while the next rate move now seems to be anybody’s guess, one thing is clear – we are currently in the midst of a “flat market”.
But what does this mean for brokers?
The broader media believe a ‘flat market’ equals doom and gloom.
In fact, there are a lot of positives to be drawn from a flat market.
Any broker worth their salt will tell you work is hard in a rising rate environment. Borrowers are rightfully hesitant about buying properties. Similarly, they are just as cautious in a falling rate environment. Many prefer to take a ‘wait and see’ approach to buying homes in a bid to buy at the bottom of the cycle.
Right now however, rates aren’t rising, nor are they falling – they are stationary.
The last rate move was back in November. And, if the economists are to be believed, rates are not expected to move for another seven months at least.
Good brokers should be able to capitalise on the current market stability and drive business through their front door.
The trick is not to be deterred by the naysayers and instead look for areas that are booming.
If you talk to any real estate agent, they will tell you the market is patchy.
Properties in the blue ribbon market may not be selling so well, yet those in the most affordable suburbs are going like proverbial hotcakes.
Brokers that focus on this latter market should, by all accounts, do well.
Of course, focussing on suburbs that are currently selling well is not the only trick brokers can employ to ensure business continues to flow.
This month, The Adviser looks at the top 10 tips for accelerating your business in a flat market.
We asked some of the nation’s leading brokers for their top success tips, and the results were surprising. But not so surprising that you won’t be able to implement these ideas in your business.
