Real estate agents exit as earnings fall

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The number of real estate salespeople has dropped year-on-year for the past couple of years. File photo. Photo:

Extra work – and fewer sales – may be prompting some real estate sales people to leave the industry.

Brooke Gibson has been a real estate salesperson for 18 months. It has been a tougher market than in years prior and she says salespeople are having to work harder.

“To be honest, it’s a buyer’s market. We are having more problems with finding buyers.”

Real Estate Authority data shows the number of salespeople in the market has dropped year-on-year for the past couple of years.

The number of active real estate licenses – including agents, branch managers and salespeople – is now 15,460.

That is down from 16,053 in April last year and 16,780 a year earlier.

It follows a decline in turnover in the housing market.

In late 2020, at the busiest time of the market, more than 10,000 houses changed hands in a single month. That number was 5559 in April – or about one sale for every three licensed industry participants.

Meanwhile, the national median sale price has dropped from $925,000 in November 2021 to $790,000 last month.

Infometrics chief forecaster Gareth Kiernan said the total value residential property sales peaked at $91 billion in the year to July 2021, and was $61.2b in the year to April – about a third less.

In May last year, annual turnover was down 40 percent on the peak.

That means agent commissions are also still down a third from the peak – from about $1.82b in the year to July 2021, assuming a 2% commission rate, to $1.22b in the year to April this year.

On a $790,000 sale, agencies will generally charge anything from $20,000 to $29,000 depending on their structure and the salesperson would often get half of that.

That is compared to commission of $23,000 to $32,000 on a $925,000 sale.

Gibson has not seen salespeople in her office leave yet but is aware of some in other firms who are taking on full-time jobs and just “moonlighting” in real estate.

“I don’t think we’ve seen the worst of it yet,” Gibson said.

“You do what you do to get through. 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 said some people might decide not to renew their licences just because it was not worth their while. Licences have to be renewed each year.

The industry was likely to shrink further, she said.

“It hasn’t probably hit rock bottom yet.”

Real Estate Authority chief executive Belinda Moffat said there was a number of factors that could influence licensee numbers.

“One is the fluctuation in the number of new licensee applications. We saw a significant increase in new licensees in 2020-2022, and the number of new licensees has gradually reduced over the last 18 months. We do not hold data on why people choose to leave the profession.

“There are a number of reasons including: retirement, moving off-shore, changing careers, or challenges securing listings or sales in a difficult market. A smaller number leave due to cancellation for failure to meet regulatory obligations.”