PHOTO: FILE
Extra work and fewer sales are prompting some real estate salespeople to leave the industry.
Brooke Gibson, a real estate salesperson for 18 months, observes that the current market is tougher than previous years, requiring more effort from salespeople.
“To be honest, it’s a buyer’s market. We are having more problems with finding buyers,” she says.
Data from the Real Estate Authority shows a year-on-year decline in the number of active salespeople for the past couple of years. Currently, there are 15,460 active real estate licenses, down from 16,053 in April last year and 16,780 the year before that.
This decrease coincides with a drop in housing market turnover. In late 2020, over 10,000 houses were sold in a single month. By April this year, that number had fallen to 5,559, roughly one sale for every three licensed participants.
Additionally, the national median sale price has dropped from $925,000 in November 2021 to $790,000 last month.
Gareth Kiernan, Infometrics’ chief forecaster, reports that the total value of residential property sales peaked at $91 billion in the year to July 2021, but fell to $61.2 billion by April this year, a decline of about one-third. In May last year, annual turnover was down 40 percent from the peak.
This downturn means agent commissions have also decreased by a third, from about $1.82 billion in the year to July 2021 (assuming a 2% commission rate) to $1.22 billion in the year to April this year. On a $790,000 sale, agencies typically charge $20,000 to $29,000, with salespeople often receiving half. This is compared to commissions of $23,000 to $32,000 on a $925,000 sale.
Gibson notes that while no salespeople in her office have left yet, she knows of others who are taking on full-time jobs and “moonlighting” in real estate.
“I don’t think we’ve seen the worst of it yet,” Gibson says. “Tough times make strong people and we’ll see the good ones hang around. It’s been so easy for so long there are people who probably shouldn’t be here.”
She suggests that some might not renew their licenses, which must be renewed annually, if it’s not worthwhile. She predicts the industry will likely shrink further.
“It hasn’t probably hit rock bottom yet,” she adds.
Belinda Moffat, chief executive of the Real Estate Authority, cites various factors influencing licensee numbers, including fluctuations in new applications. The number of new licensees increased significantly from 2020 to 2022 but has gradually decreased over the past 18 months. The Authority does not track reasons for leaving the profession, which may include retirement, moving abroad, career changes, or difficulties in securing listings or sales in a tough market. Some leave due to regulatory non-compliance.
SOURCE: RNZ