Reduced volume and higher costs point to a year of consolidation

Never before has the rollercoaster nature of the real estate market been so strong.

After the 2009 collapse, a slow recovery produced several very strong years before Covid reset the dial for 2020 and 2021.

Then last year we had a quick recovery and relative boom.

Now, however, the war in Ukraine and higher interest rates have eroded confidence and values, and transaction volumes have slowed despite a booming economy.

In a market where people aren’t sure what’s going to happen, the easiest thing to do is to do nothing, and that’s the dynamic that reduces transaction volume.

Agents perform best in a fast-growing market, and even a fast-falling market can be profitable, but a stalled market hits sales fast.

These comments are particularly true in the investment market, where companies typically derive most of their revenue, but office business is also slowing.

Retail will continue its gradual recovery and logistics will remain the star.

The big overhead for companies is staff, and some of the global brands have been announcing job cuts since late last year.

Hopefully Ireland, which is an economic outlier with its thriving economy, remains protected from much of this.

However, there have already been some layoffs in architecture and surveying firms following the slowdown in new construction.

Firms will fill vacancies with internal candidates, there will be no pay rises this year, and there will likely be fewer graduate recruits.

Finding the right balance in headcount is a real conundrum for companies.

More than one company told me last year that they have laid off too many employees during the pandemic and have been unable to capitalize on the market recovery, and “yo-yo” hiring and firing patterns are hurting morale and of long-term planning.

Pricing is still being talked about in the market.

Asset values ​​have inevitably fallen as interest rates have risen, and since there aren’t many shops, there is conjecture as to where the values ​​actually are.

I think we’ll “discover” quite a bit in a month or so as some deals agreed in the last quarter of last year close and hard evidence emerges.

It’s time to get back to basics. Get even closer to your customers. Winning instructions become paramount.

A regime change in Russia or a worried government suddenly lowering VAT on new homes will cause a new spike.

Be ready.

Pack more clout

I firmly believe in taking as much advice as possible from successful people from all walks of life and there is no better source of inspiration than The Pendulum Summit.

Over 8,000 business people will attend the two-day event at the Convention Center Dublin on Wednesday and Thursday next week.

Wearing my motivational speaker hat, I have the honor of interviewing boxing legend Barry McGuigan about his life and his tips for peak performance and well-being.