PHOTO: Perth, Western Australia. FILE
The state is witnessing a decline in the number of real estate agents, primarily due to a historic low in available houses for sale, making it challenging for agents to sustain a viable income.
To adapt to the current market conditions, agents are resorting to new strategies, with a significant number accepting commissions below 2% to secure business opportunities.
Paulette Contessi, a real estate agent, emphasized that challenging market conditions have prompted many agents to exit the industry. According to Contessi, an agent must sell a minimum of 18 homes annually to achieve the average Australian wage.
Ray White agent Laura Johns said real estate agents are exploring both traditional and contemporary marketing methods to get listings.
Contessi Properties director Paulette Contessi, based in Claremont, highlighted the critical role of property listings in generating income for agents. She explained that with the median house price in Perth at $660,000, an agent typically receives $11,892 in gross commission, of which about 50% goes to the agency. Additional expenses like taxes, marketing, and fuel further impact the agent’s earnings.
Data from Consumer Protection as of January 2024 reveals a notable decrease in the number of licensed real estate agents and registered sales representatives compared to the previous year. The shortage of house listings, reaching a record low of 3648 in December, is identified as a significant factor contributing to this decline.
Real estate agents are resorting to off-market sales due to the historically low stock levels, resulting in homes selling rapidly. Ray White Dalkeith Claremont agent Laura Johns acknowledged the challenges in the market, with some agents leaving the industry due to difficulties in increasing their supply.
Real estate agents are selling houses off market with stock levels at historic lows. CREDIT:DION GEORGOPOULOS
Johns highlighted that, apart from low stock levels, factors such as the demanding nature of the job, the need for constant availability, and intense competition contribute to agents exiting the industry. She also noted that the industry’s portrayal on social media often overlooks the substantial behind-the-scenes work.
Cath Hart, the chief executive of REIWA, mentioned that industry numbers have been on a downward trend, with agents facing long hours, intense competition, and delayed income. She pointed out that even in a fast-paced market, agents handle numerous offers for a single property, and the emotional aspect of the job can be challenging.
Despite the perception that quick property sales make the job easier, Hart emphasized that agents face complexities such as managing disappointed buyers and navigating negotiations. She also dispelled the notion that a small percentage of agents dominate the market, revealing that about 46% of agents collectively handle around 85% of property sales.
In response to the tight market conditions, agents are adopting innovative tactics, including off-market sales and negotiating longer settlement terms. The average commission for agents is noted to be 2%, but many are lowering their fees to secure listings in the competitive market.
SOURCE: WA TODAY