Home » Conveyancers Hub » Webinars » Trends and Opportunities

Trends and Opportunities for Practitioners

Date presented: Tuesday 28th March 2023
Presenters: Julie Toth (PEXA), Les Vance (PEXA), Bill Lang (Small Business Australia)

The conveyancing and property law sector has significantly changed over the last three years. Looking forward, the future changes coming due to the broader use of digital technologies, changes in customer and referral partner needs and the volatile economic conditions will be significant. These changes are already impacting the building sector and the number of property transactions and demand for property legal and conveyancing services.

The following videos have been recorded from our monthly webinar and edited into sections for your convenience.

Click to jump to a section below:

Section 1

Video length 03:29

Trends and Opportunities for Practitioners
More ways to help support your business

Section 2

Video length 02:36

Australia’s property markets are being pulled in different directions by multiple local and global factors.

  • Interest rates
  • Demographics and migration
  • Inflation and cost-of-living
  • Jobs and incomes
  • Global financial & geopolitical disruptions

Section 3

Video length 01:36

Demography is destiny
Adult population growth recovered quickly after the COVID-19 years.

High population growth by international standards

  • Fundamental support to our housing markets.
  • Resumed quicker than anticipated after COVID-19.
  • Set to continue at current pace, possibly stronger.

Net migration contributes most of our growth

  • Majority of arrivals are temporary not permanent visa holders, so the ‘churn’ of people is high.
  • Majority of arrivals are working age adults, so they add immediately to demand for housing.

Section 4

Video length 01:57

The Great (interstate) Migration
State pop growth and migration point North

Qld currently has highest population growth

  • Strong interstate arrivals from NSW, Vic.
  • More international arrivals are now landing first in SEQ instead of Melbourne.
  • Younger, more mobile population profile.

Vic population fell, now recovering slowly

  • Gov expects Vic to regain pre-COVID growth rates but recovery
    is slow.
  • Vic pop growth highly dependent on international student and
    worker arrivals.

Section 5

Video length 02:02

Smaller households spread across more houses
Average household size is in long-term decline

New household formation rate averages about 2% p.a.

  • This is higher than population growth (~1.8% p.a.).
  • Recovered quickly after COVID-19 disruptions.
  • Significant driver of demand for new housing.

Average household size is in long-term decline.

  • More homes required for same or fewer people.
  • Turbo-charged during COVID due to separations, regional migration and WFH needs. RBA estimates this contributed 120,000+ households to housing demand in 2020-21, despite zero population growth.
  • Household density may unwind a touch from here.
  • Important implications for the number of homes we require, also their size, type and location.

Section 6

Video length 02:48

Sydney always leads the pack
State housing markets: house price cycles

Sydney traditionally leads our residential price cycles

  • number one destination for international arrivals
  • high turnover of people and households
  • highest prices + largest mortgages = more sensitive to changes in interest rates & credit availability
  • first market to turn up or down
  • larger price swings up or down

Brisbane (SEQ) has moved into second place as our largest,
most dynamic housing market

  • stronger adult population growth & net migration
  • stronger growth in new housing (but significant loss of habitable housing stock due to repeat flood events)

Perth is remote and somewhat unique, in that it tracks mining cycles

Section 7

Video length 03:07

Activity is settling back toward pre-COVID volume trends
State housing markets: settlement and refi volumes

Settlement volumes moving back to pre-COVID levels

  • Peaked in all mainland states in 2021
  • Now returning to pre-COVID levels
  • Qld settlement volumes likely to stay higher than Vic & NSW due to stronger demand & market turnover rates

Refinance volumes are set to remain elevated in 2023

  • Elevated refi activity likely to continue due to unusually high numbers of fixed-rate loans due to expire. RBA estimates 880,000 in 2023 and 450,000 in 2024, spread fairly evenly across geographies.
  • ABA estimates that 70% of all loan refinancing moves to a new lender (directly or via a broker).

Section 8

Video length 01:59

Fastest steepest interest rate rises on record
Interest rates are close to their peak in this cycle

Interest rate impact on housing markets

  • Fastest steepest rate rise on record in 2022-23.
  • Immediate impact on property sales because around 80% of
    property sales require finance.
  • Delayed effect in 2023-24 as fixed loans roll over.

Interest rate trajectory from here

  • One or two more cash rate rises (25 bp each) are possible due to
    persistent inflation and strong local labour market, but the case for more rate rises is diminishing rapidly.
  • Cash rate pause is increasingly likely as risks rise.
  • Increasing risk that retail lending rates will adjust independently of
    the RBA cash rate due to global credit market disruptions & risk

Section 9

Video length 04:01

What next in 2023?

Australian property positives

  1. Strong adult population growth
  2. Slower but positive activity growth (slow GDP & jobs)
  3. Trough forming in residential property prices & volumes

Australian property risks

  1. Rising unemployment & minimal income growth
  2. Lingering inflation and high interest rates
  3. Tighter credit availability and lending standards

Global positives

  1. Inflation pressures easing
  2. Slow but relatively stable in China and Asia
  3. Supply chain and trade disruptions diminishing

Global risks – but also some sources of opportunity

  1. Financial market volatility and risk aversion
  2. Flight to safe investments and safe assets (e.g. in commodity markets, gold up but oil down)
  3. Increasing risk of recession in US and EU (recession conditions
    already apparent in UK and likely to continue)

Section 10

Video length 09:44

Build trust and repeat business – Attract and retain clients

First time property buyers

  • No to very low knowledge of process
  • What “value added” to the end-to-end of buying process?
  • TRUST – Credentials, Experience, Personal Referral

Sellers and re-buyers

  • Past experience with you?
  • Do they remember you?
  • What “value-added” did you offer to past clients so they remember, refer and reuse you?

Section 11

Video length 05:04

Your formula for success – Understanding value creation

SPV = Superior Perceived Value

Value = (Benefits + Quality) – Price

Section 12

Video length 00:26

What conveyancers and solicitors are investing in – Working on your business

Top Business Improvement Priorities

Section 13

Video length 00:26

What conveyancers and solicitors are investing in
Getting a RoI on business improvement strategies

  1. Increase fee per client
  2. Reduced time/costs/stress serving clients
  3. Reduced Risks
  4. More referrals, more clients
  5. Less stress and more success for the owner

Q&A 1

Video length 01:19

What key technology trends might practitioners want to be mindful of when running their business?

Q&A 2

Video length 00:40

How can practitioners manage their cyber security?

Have a specific question? Ask the coaches.

Ask our coaches for confidential advice about a business issue or opportunity. Simply complete the question form and we will allocate the appropriate coach for your response.

All confidential advice is bought to you by our Small Business Australia coaches. Please note that the advice provided by our coaches is general business information only. We do not provide legal or financial advice.