Joseph Fairchild always had a keen interest in property investing, which led him on a journey to a real estate career.
He took over Metro Realty in 2009 and leads the team in sales and property management. He talks about his passion for real estate, and why service is at the core of what Metro Realty does.
Hi Joseph, tell us about how you got started in your real estate career?
I have a degree in computer science and ran my own IT business for a while. But I always gravitated towards real estate because I was a keen young property investor. I had an investment property and I wasn’t happy with how it was being managed, so I decided to solve it by managing it myself. Then that progressed to managing properties for friends and family. Over time it gradually grew into sourcing, buying, and selling property and I got my Real Estate Licence. It ended up that real estate was my passion. So real estate as a career was really a natural progression for me.
Metro Realty was established in 1990, but I incorporated the business in 2009 and later bought it. Most real estate agencies are sales agencies and their property management arm comes about indirectly. But Metro Realty started the other way round, with property management as the base. We grew it into something awesome.
What do you enjoy about working in real estate?
Real Estate is a service-based industry, so if you’re selling or managing a property, you’re providing a service. We are the custodians of these assets for our clients. And there’s a lot of trust in that.
We are specialists in our local area so over time you become very familiar with the economics of the transactions in that area. If you mention a building in the city, I’ll likely know it, and be able to tell you the value and the demand for it, or how much it’s selling for and who is buying it. It allows you to become an expert and a specialist.
I’ve worked in real estate through several property cycles, and you get to see the trend of property prices growing. On average, property prices double every 7 to 10 years, so they go up 7 to 10% on average every year. After a period of fast growth, people think maybe it won’t last, a bubble may burst. But historical data shows that it usually does continue to increase over time, even at a different pace. The good thing about investing in real estate is that your rents are protected against inflation – if bread and milk go up, rents will usually go up.
Do you have a real estate philosophy?
In terms of property investment, I usually advise people to buy and hold for the long term because it’s capital growth that builds wealth. We have it really good right now with record low-interest rates and ease of borrowing, so it’s important to do whatever you can do to get that deposit together and get into property if that’s what you want to do. Then you can reap the benefit of the long term gains.
The rent may help pay off the mortgage, but holding property grows wealth. There is obviously a time to sell, but you need the right strategy and that depends where you are in life. I don’t believe in leveraging too much, and a good loan to value ratio is around 60%. You can afford to make mistakes when you’re younger. If you pay too much for a property, the capital growth will mean the market will forgive you. You need to learn as much as you can about the property market. It’s like business, even if you don’t buy the right property it’s a big learning curve.
Talking about the business, you’re the principal selling agent so can you tell us how the Metro Realty team works together, and how Metro Realty does things differently?
When a client gets me to sell a property, in reality, they’re getting a whole team to work for them. A lot of sales agents are lone wolves, working for themselves under a brand. But at Metro Realty we all work together to achieve a collective outcome. This means there is team support and resources, and greater communication, customer service and buyer management available to each client. Maintaining good culture within the team is important. We run “make it happen sessions” and regular team meetings, and we worked together to create our 10 core values. We don’t see real estate as a one-off transaction. It’s an ongoing relationship with a lifetime client and we are there to provide a service. There’s a lot of great technology used in real estate these days, and while it’s really important, there’s also a big relationship component to real estate, particularly around advice and negotiation.
Serving the community by helping them with their property journey gives me great satisfaction. I enjoy seeing the impact of the service we provide – watching people achieve their retirement goals or move into their dream property.
What changes have you observed in the real estate industry over your career?
Old fashioned bricks and mortar businesses with properties advertised on a shop window are no longer needed. You still get foot traffic past a window display but technology has given us a broader reach and allowed buyers and renters to search for property online – wherever they are and no matter where they want to buy or rent. I’ve also seen a lot of sales agents come and go over the years. In a good market, everyone wants to sell real estate. But when the market changes they drop away. The agents who make it through the ups and downs are usually in it for the right reasons.
What’s the state of the CBD and inner-city market and what do you expect to see as the year unfolds, and into 2022?
Strata units in Sydney’s CBD have been greatly impacted by the lack of international students due to border closures. We have seen rents decrease and some small drops in value during 2020. Overall the market recovered well from the first wave of the pandemic in 2020, and we were more prepared and the market knew what to expect when the second wave hit in 2021. Sales prices have remained steady, but rents did drop.
I believe we have some catchup to play in terms of value. We’re sitting at pre covid prices, and supply is currently a little higher than demand for strata units, but that will level out. The empirical data suggests good price growth in 2022, unless finance is significantly altered with a big rise in interest rates, which seems unlikely at this point. So I’m looking forward to price growth for sales and rentals in 2022.