Real estate agency practice and profitability : an analysis of house sales and agency profitability in Sydney

Large cities provide a broad range of residential property types, as well as a range of socio-economic locations. This results in a significant variation in residential property prices across both the city itself and the individual suburbs. The only constant across such a diverse range of residential property is the need for the majority of residential property owners to employ the services of a real estate agent to sell their property or to purchase a residential property. This paper will analyse the Sydney residential property market over the period 1994 to 2002 to determine the change in real estate offices numbers over the period, the profitability of real estate agency offices based on the residential house price performance of houses and units in these specific locations and the extent of changing residential house prices on agency profitability. Suburbs have been selected to provide a full range of housing types, socio-economic areas, older established and developing residential suburbs and location from the

The true cost and performance of individual residential property investment and the implication on real estate agency practice

Investment in residential property in Australia is not dominated by the major investment institutions in to the same degree as the commercial, industrial and retail property markets. As at December 2001, the Property Council of Australia Investment Performance Index contained residential property with a total value of $235 million, which represents only 0.3% of the total PCA Performance Index value. The majority of investment in the Australian residential property market is by small investment companies and individual investors. The limited exposure of residential property in the institutional investment portfolios has also limited the research that has been undertaken in relation to residential property performance. However the importance of individual investment in residential property is continuing to gain importance as both individuals are now taking control of their own superannuation portfolios and the various State Governments of Australia are decreasing their involvement in the construction of public housing by subsidizing low-income families into the private residential property market. This paper will: • Provide a comparison of the cost to initially purchase residential property in the various capital city residential property markets in Australia, and • Analyse the true cost and investment performance of residential property in the main residential property markets in Australia based on a standard investment portfolio in each of the State capital cities and relate these results to real estate marketing and agency practice.

Residential real estate education and globalisation in Australian real estate markets and practices

The purpose of this scoping paper is to offer an overview of the literature to determine the development to date in the area of residential real estate agency academic and career education in respect to Foreign Direct Investment (FDI) transactions and implications in Australia. This paper will review studies on the issue of foreign real estate ownership and FDI in Australian real estate markets to develop an understanding of the current state of knowledge on residential real estate agency practice, career education and real estate licensing requirements in Australia. The distinction between the real estate profession education, compared to other professions such as accounting, legal and finance is based on the intensity of the professional career training prior or post formal academic training. Real estate education could be carried out with relatively higher standards in terms of licensing requirement, career and academic education. As FDI in the Australian real estate market is a complex globalisation and economic phenomenon, a simple content of residential real estate training and education may not promote proper management or capacity in dealing with relevant foreign residential property market transaction. The preliminary summarising from the literature of residential real estate agency education, with its current relevant or emerging licensing requirement are focused on its role and effectiveness and impact in residential real estate market. Particular focus will be directed to the FDI relevant residential real estate agency transactions and practices, which have been strongly influenced by the current residential real estate market and agency practices. Taken together, there are many opportunities for future research to extend our understanding and improving the residential real estate agency education and training of Foreign Direct Investment in the Australian residential real estate sector.

Real estate agents : why is education important?

Real Estate Agency education in Australia has undergone many changes during the last 40 years. This is primarily due to the changing nature of consumer protection provided by government and the expectation of increased fields of knowledge relating to real estate transactions. Each state and territory within Australia has a range of regulatory bodies to oversee consumer protection and the distinct licenses and educational requirements that comprise their regimes. Since the 1970’s minimum educational requirements in New South Wales are prescribed for real estate agency work. However, very little research exists in the Australian literature, where an analysis has been undertaken to evaluate these changes, which includes course content, hours allocated for each subject, assessment criteria for each subject,the educational qualification attained, and the requirement for industry experience as a pre-requisite for licensing approval. It is argued that the change to educational requirements, has impacted negatively for the consumer, with an increase in consumer complaints, particularly during the last 10 years.

Sole agency vs multi-agency: An investigation of agency practice across England and Wales

Purpose: The purpose of this paper is to investigate the impact of different agency practice on agency fees, business efficiency, and housing market liquidity. Design/methodology/approach: The paper studies the effect of sole and multiple agency practices on estate agent efficiency, housing market liquidity, and commission fee levels. The analysis uses the survey data from 2000 to 2006 to investigate the different agency practices across England and Wales and their effect on estate agency business efficiency, housing market liquidity, selling price, and fee levels. Findings: The empirical analysis confirms that agency practice has a locality bias, that is, some regions are more likely to adopt sole agency practice than other regions. The estate agents with a sole agency practice charge a lower agency fee, help clients to achieve better selling price and are more efficient; whereas multiple agency practice facilitates liquidity in the housing market, but experiences higher fall-through rate. Research limitations/implications: The research focuses on estate agent rather than consumers due to the limitation of the data based on a research project concerning transaction costs designed prior to this analysis. Originality/value: There is little other research that investigates the residential estate agency practice and its impact on housing market in the past three decades in England and Wales. The findings are a useful guide for practitioners to better understand the issues associated with different agency practices and should enhance business efficiency and performance.

Report of the House Committee to Study the Illinois Real Estate Broker-Lawyer Accord to the House of Representatives of the 79th General Assembly of the State of Illinois.

Cover title.

Serial persistence in individual real estate returns in the UK

Persistence of property returns is a topic of perennial interest to fund managers as it suggests that choosing those properties that will perform well in the future is as simple as looking at those that performed well in the past. Consequently, much effort has been expended to determine if such a rule exists in the real estate market. This paper extends earlier studies in US, Australian, and UK markets in two ways. First, this study applies the same methodology originally used in Young and Graff (1996) making the results directly comparable with those in the US and Australian property markets. Second, this study uses a much longer and larger database covering all commercial property data available from the Investment Property Databank (IPD), for the years 1981 to 2002 for as many as 216,758 individual property returns. While the performance results of this study mimic the US and Australian results of greater persistence in the extreme first and fourth quartiles, they also evidence persistence in the moderate second and third quartiles, a notable departure from previous studies. Likewise patterns across property type, location, time, and holding period are remarkably similar leading to the conjecture that behaviors in the practice of commercial real estate investment management are themselves deeply rooted and persistent and perhaps influenced for good or ill by agency effects

Serial persistence in individual real estate returns in the UK

Purpose – The purpose of this paper is to examine individual level property returns to see whether there is evidence of persistence in performance, i.e. a greater than expected probability of well (badly) performing properties continuing to perform well (badly) in subsequent periods. Design/methodology/approach – The same methodology originally used in Young and Graff is applied, making the results directly comparable with those for the US and Australian markets. However, it uses a much larger database covering all UK commercial property data available in the Investment Property Databank (IPD) for the years 1981 to 2002 – as many as 216,758 individual property returns. Findings – While the results of this study mimic the US and Australian results of greater persistence in the extreme first and fourth quartiles, they also evidence persistence in the moderate second and third quartiles, a notable departure from previous studies. Likewise patterns across property type, location, time, and holding period are remarkably similar. Research limitations/implications – The findings suggest that performance persistence is not a feature unique to particular markets, but instead may characterize most advanced real estate investment markets. Originality/value – As well as extending previous research geographically, the paper explores possible reasons for such persistence, consideration of which leads to the conjecture that behaviors in the practice of institutional-grade commercial real estate investment management may themselves be deeply rooted and persistent, and perhaps influenced for good or ill by agency effects. - See more at: http://www.emeraldinsight.com/journals.htm?articleid=1602884&show=abstract#sthash.hc2pCmC6.dpuf

Practical real estate brokerage; a textbook, training program, guide and manual for the successful practice of brokerage in real estate,

Mode of access: Internet.

Measuring performance of municipal real estate : softening the impact of financial crisis to local governments

Asset management in local government is an emerging discipline and over a decade has become a crucial aspect towards a more efficient and effective organisation. One crucial feature in the public asset management is performance measurement toward the public real estates. This measurement critically at the important component of public wealth and seeks to apply a standard of economic efficiency and effective organisational management especially in such global financial crisis condition. This paper aims to identify global economic crisis effect and proposes alternative solution for local governments to softening the impact of the crisis to the local governments organisation. This study found that the most suitable solution for local government to solve the global economic crisis in Indonesia is application of performance measurement in its asset management. Thus, it is important to develop performance measurement system in local government asset management process. This study provides suggestions from published documents and literatures. The paper also discusses the elements of public real estate performance measurement. The measurement of performance has become an essential component of the strategic thinking of assets owners and managers. Without having a formal measurement system for performance, it is difficult to plan, control and improve local government real estate management system. A close look at best practices in public sectors reveals that in most cases these practices were transferred from private sector reals estate management under the direction of real estate experts retained by government. One of the most significant advances in government property performance measurement resulted from recognition that the methodology used by private sector, non real estate corporations for managing their real property offered a valuable prototype for local governments. In general, there are two approaches most frequently used to measure performance of public organisations. Those are subjective and objective measures. Finally, findings from this study provides useful input for the local government policy makers, scholars and asset management practitioners to establish a public real estate performance measurement system toward more efficient and effective local governments in managing their assets as well as increasing public services quality in order to soften the impact of global financial crisis.

Depreciation and its impact on the total return of UK commercial real estate, 1994-2003

Depreciation is a key element of understanding the returns from and price of commercial real estate. Understanding its impact is important for asset allocation models and asset management decisions. It is a key input into well-constructed pricing models and its impact on indices of commercial real estate prices needs to be recognised. There have been a number of previous studies of the impact of depreciation on real estate, particularly in the UK. Law (2004) analysed all of these studies and found that the seemingly consistent results were an illusion as they all used a variety of measurement methods and data. In addition, none of these studies examined impact on total returns; they examined either rental value depreciation alone or rental and capital value depreciation. This study seeks to rectify this omission, adopting the best practice measurement framework set out by Law (2004). Using individual property data from the UK Investment Property Databank for the 10-year period between 1994 and 2003, rental and capital depreciation, capital expenditure rates, and total return series for the data sample and for a benchmark are calculated for 10 market segments. The results are complicated by the period of analysis which started in the aftermath of the major UK real estate recession of the early 1990s, but they give important insights into the impact of depreciation in different segments of the UK real estate investment market.

Data uncertainty in real estate forecasting

The rapid expansion of the TMT sector in the late 1990s and more recent growing regulatory and corporate focus on business continuity and security have raised the profile of data centres. Data centres offer a unique blend of occupational, physical and technological characteristics compared to conventional real estate assets. Limited trading and heterogeneity of data centres also causes higher levels of appraisal uncertainty. In practice, the application of conventional discounted cash flow approaches requires information about a wide range of inputs that is difficult to derive from limited market signals or estimate analytically. This paper outlines an approach that uses pricing signals from similar traded cash flows is proposed. Based upon ‘the law of one price’, the method draws upon the premise that two identical future cash flows must have the same value now. Given the difficulties of estimating exit values, an alternative is that the expected cash flows of data centre are analysed over the life cycle of the building, with corporate bond yields used to provide a proxy for the appropriate discount rates for lease income. Since liabilities are quite diverse, a number of proxies are suggested as discount and capitalisation rates including indexed-linked, fixed interest and zero-coupon bonds. Although there are rarely assets that have identical cash flows and some approximation is necessary, the level of appraiser subjectivity is dramatically reduced.