Industry Analysis & Industry Trends
Few industries do well during economic downturns, and this industry is not among them. A fall in property prices during 2008-09, combined with risk-averse lending institutions making finance harder to come by, cut revenue for real estate agencies. The worst year was 2008-09, when an 8.5% fall in revenue triggered office closures, staff cuts and pay freezes in the industry. Overall, industry revenue is expected to remain stagnant with annualised growth of 0.2% over the five years through 2012-13.
The outlook for the industry in 2012-13 is not improving significantly. General economic conditions are faring worse despite improvements with commercial real estate values and yields... purchase to read more
Industry Report - Industry Investment Chapter
Real estate agencies generally require a high exposure location for their offices, but these are commonly rented rather than owned, leaving store fit out and office equipment as the main items that incur depreciation. On the other hand, labour costs account for a major portion of a typical company's revenue in the industry, with the service-based nature of real estate agencies meaning that staffing requirements are generally quite high.
As total wage costs have diminished since the financial crisis, they have also diminished in relation to depreciation. The wages to depreciation ratio is expected to be 38:1 in 2012-13, indicating that despite the lowering of relative reliance on labour, it remains a highly dominant means of how the industry operates... purchase to read more