Navigating Property Market Changes: Key Metrics That Win Listings and Clients
Plenty of benchmarks and trends exist in commercial real estate brokerage worldwide. As an agent, this knowledge is crucial for staying informed about the following opportunities and deciding how to react.
For instance, you might track the average price per square foot (or m2) in a specific area, the vacancy rate for a particular property type, or the average time a property stays on the market. These are just a few examples of the critical metrics you could be monitoring.
Remember that the decisions you make on an individual level in response to these real estate market changes will largely determine your success as an agent. Use the market changes to differentiate your skills and relevance as an agent.
What is the system that you use now to monitor your market? Here are some ideas to help you build a fresh new system of activity and opportunity for yourself as an agent.
Understand the Property Market Dynamics
Most locations and cities contain many different real estate trends and pressure points. For instance, office spaces might be in declining demand due to a surge in remote work, while retail properties might be facing challenges due to the rise of e-commerce. Some locations are better than others and will be outside the ‘averages’ regarding property enquiries, sales, and leasing.
Your local knowledge and engagement with the changing market are invaluable. By working with the trends and opportunities in your location, you can find listings faster than your competitors, leading to more tremendous success in your real estate endeavours.
Zones of Activity?
Look around your property market. ‘Activity zones’ are areas within your market experiencing high levels of real estate activity, such as a surge in new construction, a high number of property sales, or a significant increase in property values.
For example, a downtown area undergoing a revitalisation project could be an ‘activity zone ‘. Where are these ‘hot spots’ in your location, and why are they the activity zones? You can do more with the right people and pressure points when you know the answers.
Property Investment Sentiment
Consider today’s property activity and sentiment. The local economy and business sentiment will impact commercial property’s interest and churn factors.
Successful businesses underpin the occupancy and ownership trends in commercial property, so constantly talk with property investors and business owners. Create comprehensive lists of investors and business owners, as plenty of businesses are in each group.
The property market swings from sellers to buyers and landlords to tenants. ‘Pressure points’ are areas of the market where there is a significant imbalance in supply and demand, leading to increased competition or favourable conditions for one party.
Understanding your location and how you can work productively with the different groups is critical. Identifying these pressure points can help you anticipate market shifts and adjust your strategies accordingly.
Focusing on your preferred property types and known precincts and working on the properties you like and the locations you understand can help you connect with business owners and investors.
Your connections with business owners and investors are not just beneficial; they are crucial. They underpin commercial property occupancy and ownership trends, making you an integral and secure market service solution.
Supply and Demand
Check out the supply and demand factors for the various property types. For example, a high demand for office spaces in your area but a limited supply could increase rental rates and property values.
Concentrate on the changes between office, industrial, and retail properties. Understand how many new developments are coming through the market and how they can impact future rental returns and values.
When you track the supply and demand factors, you can approach developers and investors to service projects and future construction activities. The relevance of your database’s size will be helpful when working with developers.
Sales Volume and Transaction Numbers
There will be trends and changes within the various property types, with office, industrial, and retail properties. Those changes will be in sales volume and transaction numbers. So, the questions to look into are these:
- What types of property have you sold?
- What are the preferred locations?
- What are the ‘hot’ property types for businesses and investors?
- What are the prices and rents per unit of area?
- How have the trends in prices and rents changed over time?
- Where are the new projects entering the market, and what property types?
Leasing Metrics and Trends
When working with landlords and tenants as part of investment property performance, track these metrics:
- Vacancy and occupancy rates in the classes of property
- Enquiry rates and tenant placement trends
- Lease renewal rates and terms for current tenants in occupation versus new tenants
- Average market rents by property class and the incentives needed to create new transactions
Understanding pressure points and trends will help you navigate today’s real estate market and connect with more people, leading to new business opportunities.
