The franchising of residential real estate agencies – one of the single largest parts of the franchise sector in terms of overall unit numbers – is undergoing a revolution.
This revolution went largely unnoticed during the booming property market, which fuelled explosive price growth and pushed housing affordability to record lows.
Until recently, the runaway success of the economy, easy finance and an oversupply of consumer confidence created an environment where virtually any property was in demand, and sellers would be fielding offers before the “For Sale†sign was erected.
The market boom resulted in ever-shortening intervals between listing a home for sale and the signing of a deal. Selling real estate in such a market may have been something like shooting fish in a barrel – it was almost impossible to miss.
The rapid turnaround from listing to sale, as well as the large sums to be made from commissions, attracted an influx of Generation-Y salespeople whose early careers have been defined by selling properties many of their friends couldn’t possibly afford to buy, and by the weekend advertisements which feature bigger photos of themselves than the actual house they are selling.
But all that is changing.
Real estate prices are stagnating, or in some cases going backwards. The tightening of credit markets has strangled the flow of easy-money loans. Combined with creeping doubts about job-security and a general decline in consumer confidence, buyers are no longer falling over themselves to buy real estate, shares, cars, big-screen TVs or pretty much anything that isn’t absolutely necessary.
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