Brightfox Launch New Mobile Website Service

Brightfox today announce the launch of a new service called R.E.Mobile to build websites compatable with and optimised for viewing over mobile phones. The new R.E.Mobile service makes it very easy and cost effective for any property firm to quickly create a full mobile compatable website within weeks. Brightfox will take the existing content, including dynamic listing data for real estate offices, and build a searchable mobile friendly site that will enable the millions of mobile phone users to visit and search for properties or projects.

For more information on this product, and an example of a R.E.Mobile website, go to http://www.brightfox.com.au/au/remobile.asp

Which property markets are most susceptible to big price falls

In a post back in April I talked about the forclosure rates in the US and how these were predominently (87%) occuring in a select number of states. It is an interesting paper and well worth a read, but todays post is about another item that really caught my attention in that paper, namely the relationship between foreclosures and the reduction in housing affordability leading up to the crash. So this got me thinking. One would assume a relatively linear link between falling housing affordability and foeclosures. A simple eqaution – when housing affordability falls, an increasing % of the individual or family’s income must go to meeting mortgage payments.

Another report on topic, the 5th Annual Demographis International Housing Affordability Survey said:


“Much of the reduction in prices has occurred in markets that have experienced the greatest loss in housing affordability in the past. The largest house price decreases over the past year occurred in susceptible Ireland, New Zealand and the United Kingdom, where housing affordability in nearly all markets had reached “severely unaffordable” (Median Multiple over 5.0). In the United States, the house price declines have been far higher in those markets that had experienced the greatest housing price increases, while markets that experienced much smaller price increases experienced far more modest losses.” For the full report go to  http://www.demographia.com/dhi-ix2005q3.pdf

And yet in the University of Virgina report, the writers find the following:

“Restoring balance between house prices and incomes is complicated by imbalances between a shortage in supply of dwellings where people prefer to live and an overabundance of dwellings in other locations. Metropolitan areas vary in the range in their political jurisdictions of house value to family income and in foreclosure rates. San Francisco provides an extreme, but clear, example.

In 2007 the ratio of house values to family incomes was excessive in each jurisdiction. The lowest house value to family income ratio, 5.7 to 1, was in Solano County which also had the highest foreclosure rate, 3.69 percent of housing units. The house value to income ratio suggests that Solano County on the edge of the metropolitan area had more dwellings relative to demand than other jurisdictions. The high foreclosure rate indicated that buyers’ capacity to pay mortgages was fragile, and, perhaps, that an accumulation of foreclosures hampered new sales.

In contrast, the highest house value to income ratios were in central jurisdictions—City of San Francisco, Marin County, and San Mateo County. They had house value to income ratios of 9.7, 8.5, and 8.5 to 1. But their foreclosure rates were the three lowest in the metropolitan area. Perhaps more residents in those jurisdictions had purchased when prices and mortgages were lower. Or, perhaps owners unable to pay mortgage costs were able to sell at acceptable prices because demand was strong (Appendix 1 San Francisco Metropolitan Area).” 

This shows quite clearly that housing affordability alone is not a guide to the success or fail of a specific market.

So what can we use as a guide. This is by no means meant to be a conclusion, as from my readings no one is really sure, but here are my ideas:

1. Housing Affordability. This has to be a factor. A Housing Affordability drops, so must demand.

2. Purchaser Profile. Without doubt foreclosures have been high in markets with high % of first home buyers. These transactions in recent times are characterised by large incentives from governments and very low (or non-existent) deposits (and therefore high mortgages). If we think of a home owners propsensity to work through troubled economic times (lets call it their Home Ownership Price Elasticity – HOPE), it is lowest in these purchasers. Owners who have significant equity in their home and a history of saving, obviously have a greater ability to weather financial difficulties, which reduces foreclosure rates and hence provides stability to prices.

A new type of real estate portal – www.onthehouse.com.au

If you come protfrom Brisbane or Sydney you may have noticed the launch of a new real estate portal called www.onthehouse.com.au. Over the past three months they have been running a fairly extensive bill board campaign in Brisbane and have recently kicked off a similar campaign in Sydney. I recently spoke to the Chief Operating Office of www.onthehouse.com.au, Luke Ingham-Myers about how the new site was going. He said that the response was overwhelming and the traffic to the site had exceeded their expectations. A few of the stat’s that he shared with me are provided below:

  • Over 1.6 million pageviews for the month of April
  • Average time on site per browser over 9 minutes
  • 80,000 Unique browsers for April to date

The key difference that www.onthehouse.com.au offers to the other portals around is that you can access historical sales data for FREE. So instead of having to purchase property reports from companies such as RP Data or Home Price Guide, you can now get this information for free from their website.

It is a real point of difference, and probably what is required to make a significant impact in the real estate portal business, which is now a quite mature market. Many other portals have come to market with essentially the same offering as realestate.com.au and domain.com.au but have been unable to grab significant market share, even without charging subscription fees. The simple reason is that the major portals attract the vast majority of website visitors, and without a significant number of visitors, even if your portal is free it won’t provide value to the real estate agency and hence will not be successful. A successful portal ultimately needs to attract a significant number of visitors to get advertisers excited. The stats that www.onethehouse.com.au are quoting a very good, and if they continue growing at their present rate then we very well may have another significant player in the real estate portal market in Australia. Something I am sure we would all like to see.