An article in The Age newspaper in Melbourne (“Cheaper areas escape big cuts”) talks about the 10 per cent drop in the median house price in Victoria’s capital, and the relative stability in properties priced under $350,000. But what got my attention was this little statement:
“( Eastern suburbs agent Peter Bennison) said the number of properties for sale had fallen since last year, and marketing tactics were changing.
“Advertising schedules and budgets will shrink … there’s going to be a lot of private sales going on, off-market selling and sales before auction.“
That’s going to mean a big change for a lot of agents.
How will agents market their properties when they have less to play with?
Agents traditionally spend a lot of money on newspaper advertising, which is one of the most expensive marketing tools available. I’ve suggested previously that newspaper advertising is on the way out, and I just wonder if the pressure to reduce advertising budgets might expedite that.
Will there be less auctions, because of the cost of doing them, or more auctions, because an auction may be the only way to find out what buyers will pay for a particular home in such a difficult market?
I think that issue will vary with each real estate agent. Some agents only sell by auction, and they’ll continue to push those, together with the associated high marketing costs. Although this could lead to a drop in the number of people who choose to go with these particular agents.
Given that agents need to advertise somewhere, will we see a rise in the amount of money spent advertising online?
To me, that makes a whole lot of sense. The internet offers the widest possible distribution, it’s relatively cheap, and it’s where 87% of buyers are house hunting.