PHOTO: A PROPERTY SOLD SIGN IN AUCKLAND, 2017 (PHOTO: FIONA GOODALL/GETTY IMAGES)
Real estate firms are hanging on to millions in wage subsidies despite a red-hot housing market recovery since June, reports Brent Melville of BusinessDesk.
Three of the country’s leading realtors — Harcourts, Bayleys, and Barfoot & Thompson — claimed a combined $8 million in wage support for more than 1,000 employees when pandemic-induced lockdowns were imposed during March and April. Many, including Harcourts and Bayleys, went on to claim the subsidy extension.
And while they may be the biggest firms, it will be the tip of the iceberg for a sector with almost 19,000 registered agents.
The Real Estate Authority lists 15,218 active real estate staff employed by 892 listed firms. In a June survey of its members, 88% of the more than 2,500 respondents confirmed they had applied for government support, translating to a potential $94 million in claims across the first round of wage subsidies alone.
Not so bad
Barfoot, Auckland’s biggest seller of housing, has been vocal about the minimal impact of the Covid lockdowns on its market. The $4.1 million claimed for its 603 staff was the sector’s biggest, while Bayleys received a combined $1.7 million for the 253 staff across its real estate, valuations and property services businesses, plus $552,936 in extensions.
Harcourts claimed $1.18 million across three separate applications for a combined 177 staff, adding $230,000 as an extension for 31 staff. Harcourts International also took a subsidy and extension totalling $318,674 for its 28 staff.
In reality, it’s a major exercise to work out what was claimed because many of the regional firms are standalone businesses in their own right and responsible for their own salary administration.
Ray White, for example, was listed by Work and Income as receiving a modest $91,000 for its 13 staff, while Mike Pero Real Estate claimed $154,651 for its 22 staff. Major commercial property firms also claimed, including Colliers with $130,700 for its 19 staff and CBRE at $851,952 for 122 employees. Carey Smith, chief executive of Ray White — the only top executive of a “big four” agency to respond to BusinessDesk — said wage relief was claimed specifically as a franchisor to the network members under the level four lockdown.
And that lockdown walloped the industry. Smith said his firm’s sales dropped more than 91% in April and another 48% over May. Real Estate Institute of New Zealand numbers reflected a combined 77% decline during lockdown months.
READ MORE VIA THE SPINOFF
