Weekend 3

Here we go again – three topics, three minutes – the best value speed-read you’ll get all weekend.

1.  Trumped

The debate is over; the big Donald has had the final say – if you cannot sell your property, don’t fire your real estate agent, fire them up!

This comes from Donald Trump (he used to sack agents who couldn’t sell his “beautiful” buildings) in his address to the Australasian Real Estate Agents conference on the Gold Coast earlier this week.

Now he pays 7% to 8% commissions and he believes this works a treat.

I don’t disagree, and on several occasions, when it came to selling my own home, paid a financial incentive to get a higher price.  Not every agent took the money, instead donating the balance to charity.

According to IBISWorld, 5,000 people lost their jobs in the real estate industry in Australia over the last five years.  Revenue in the industry has dropped by close to 10% since 2007.

As we wrote a few weeks back – click here to revisit  – it is defying gravity to expect real estate agents to work on a 2.5% commission structure.

Virtually no other business on the planet works off such low sales margins.

Good advice DT, but really, “beautiful”?

2.  More resources

According to ABARES, there are 94 major mineral and energy advanced developments taking place across Australia.  These total $173.5 billion and importantly, they are advanced – meaning approved, with most underway.

A breakdown of these projects is as follows:

35 energy projects  – $116 billion total

35 mineral projects – $33.6 billion total

20 infrastructure projects – $19 billion total

4 mineral/energy processing projects – $5 billion total

Most are in Western Australia, with 39 projects totalling $109 billion, followed by Queensland with 28 projects for a combined $49 billion and New South Wales with $8.2 billion.

Again, as discussed last week – click here – this isn’t a flash in the pan or fly by night operation, but major long-term developments.  These projects amount to some serious economic grunt and provide strong pillars of support.

3.  Division of labour 

I read something recently in the Economist, to the effect that men are selfish layabouts.  Really?  I can only imagine the resounding guffaws from the fairer sex: “Tell us something we don’t already know,” they are yelling.

But you see – and I just love this bit – there’s apparently a reason for it.

An American study has found that….wait for it…..the amount of housework a man does, depends on how much he dislikes it.  The more a male likes a task, the more of it he will do and vice versa.

Not exactly revolutionary stuff; but it does give me incentive to confess a dirty little secret.  I do the clothes washing at my house – each weekend, dutifully sorting the whites from the darks.  It’s therapeutic, and well, everyone in the family agrees I’m just better at it.

But back to the study, the flip side of this finding is that the amount of housework that women do has nothing to do with how much they might like or dislike a task.  Women just get on with the job and do what has to be done.

Good-on-ya girls!  We really didn’t need a study to tell us.  Where would we be without you?

And for all those males suffering from SLS (selfish layabout syndrome), you may now take solace from the fact that your condition is officially verified.  You are not alone.

Matusik Pulse

This week’s poll question is about Aussie house sizes.  “If our housing is really too big, what should we forego?”  Again, this will take just ten seconds of your time.  Answers out next Saturday.

Want more? Including charts?  Then don’t be shy click here.

Enjoy your weekend, and remember…. pass this Missive on to 3 others.

If you want to keep your comments private and confidential contact me directly on michael@matusik.com.au

Follow me too on twitter and connect via LinkedIn.

8 thoughts on “Weekend 3

  1. texac1 says:

    Hi Michael,

    I have to disagree with you on the way you are calculating an agent’s margin. I really feel this is grossly incorrect. A Real Estate Agent’s Margin should be calculated as follows:

    Gross Margin = (Revenue from Sales – Cost Of Goods/Services Sold)/Revenue

    ie at no point in the calculation of an agents gross margin does the cost of the property come into it

    Here is an example of how an agency’s gross margin should be calculated

    Gross Margin = (Commission – cost of selling agent)/Commission

    So lets assume the agent and agency split the commission 50/50 then we are left with the following situation on a $500,000 property based on 5% of first $18,000 and 2.5% of the balance:

    Gross Margin = ($12,950 – $6,475)/$12,950

    Gross Margin = 50%

    now, perhaps the agency is taking less than I am saying and of course there are overheads which aren’t accounted for in this, however, you can see my point. A Real Estate Agents COGS does not include the purchase of a property so the cost of the property is largely irrelevant.

    Perhaps a real estate agent could correct me on the normal break-up of the commissions between the agency and the individual agent but unless agents want to start buying my properties from me and reselling them they will not be including my developments as part of their COGS!!!!

  2. Jo says:

    Re men and housework studies show more housework /cooking men greater the sex and passion. My own experience confirms this after 28 years it’s still a dream run for us both.

  3. Mike says:

    “I don’t disagree, and on several occasions, when it came to selling my own home, paid a financial incentive to get a higher price. Not every agent took the money,”
    An honest agent will be aware that it is illegal in Queensland to accept any payment or gift in addition to the legislated commission payable to an agent for selling real estate. For those willing to pay it to an agent dishonest enough to accept it, the question the seller should be asking of the agent is what else haven’t you told me OR what untruth have you told me OR perhaps could the agent got more for the property had the agent not be more concerned with simply earning and hiding his illegal bonuses.

    • Big assumption that they were in Qld or even Australia and it just shows how stupid the existing system is … If I want to pay someone more for any service that should be up to me – really some of people are so righteous it is bordering on hysterical

      And if you think agents or others selling new property are getting paid REIQ then you are off with the pixies

    • Mike – I am a property marketing agent based in Brisbane and you are correct in your comment about ‘Commission’ however there are other fees that a seller can legally pay to an agent for selling their property. Provided these fees & the Commission are disclosed to the buyer by the agent on the PAMDA FORM 27c (don’t get me started….) then everyone is above board from a compliance perspective.

  4. Rita Avdiev says:

    Why only one option in the quiz? There are several spaces that can be eliminated.

  5. Anonymous says:

    definitely bathrooms – too many and too big

  6. What about INPEX? $33 billion in NT thats just one project.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: