Real­tors face ‘bloated’ job market

The Southland Times - - BUSINESS - SU­SAN ED­MUNDS

Al­most 16,000 real es­tate sales­peo­ple had just 5428 res­i­den­tial prop­erty sales be­tween them in Septem­ber, data shows.

That means at least two-thirds of agents went through the month with­out a pay cheque.

Real Es­tate In­sti­tute of New Zealand (REINZ) sta­tis­tics for Septem­ber show the num­ber of prop­er­ties sold dropped 26.2 per cent, year-on-year.

The drop was not just in Auck­land, which has led the market slow­down. For the whole of New Zealand, ex­clud­ing Auck­land, vol­umes dropped 23.7 per cent, com­pared with 2016.

Econ­o­mist Shamubeel Eaqub said life would be tough for some real es­tate agents.

He said the market was ‘‘very bloated’’ with a high num­ber of sales­peo­ple com­pared to sales, and a lot of companies would start to shed staff in large num­bers if market con­di­tions did not change.

‘‘Real es­tate agents are the ul­ti­mate in the gig econ­omy – no care and all re­spon­si­bil­ity for the agent,’’ Eaqub said.

‘‘They take all the re­spon­si­bil­ity; they take on a lot of risk. The re­wards are there but when the market is down the com­pany can walk away from it.’’

An­to­nia Baker, who runs Auck­land agency The Prop­erty Market, said she too ex­pected a drop in the num­ber of sales­peo­ple in the market. ‘‘But in re­al­ity we were prob­a­bly car­ry­ing too many in the first place, any­way.’’

She said the strong run of high house prices in the past cou­ple of years had led peo­ple to think they could eas­ily give up thier jobs and go and sell houses in­stead.

‘‘That’s all very well in a hot market but it won’t work in a slower market. I don’t know if they made much of a go of it any­way.’’

She said, un­der nor­mal con­di­tions, there were only about four prop­er­ties sold per agent per year.

A small num­ber would sell many more than that, leav­ing oth­ers barely mak­ing an in­come.

‘‘The vast ma­jor­ity [of sales­peo­ple] who get into the in­dus­try drop out in the first three months. It’s such a waste of time and money for so many peo­ple. It’s soul-de­stroy­ing.’’

All 16 re­gions had a drop in the num­ber of prop­er­ties sold in Septem­ber com­pared with the same month the year be­fore.

Turnover dropped 37 per cent in Tas­man, 34 per cent in South­land, and 31.5 per cent in Auck­land. Marl­bor­ough ex­pe­ri­enced the small­est num­ber of sales since Jan­uary 2012.

The coun­try’s me­dian house price lifted 1.2 per cent year-onyear, to $525,000.

House prices out­side Auck­land in­creased 5.7 per cent, while Auck­land’s were flat.

On a month-on-month ba­sis, Auck­land’s me­dian house price in­creased by 1.2 per cent or $10,000.

REINZ chief ex­ec­u­tive Bindi Nor­well said: ‘‘Prices across the coun­try in­creased in all but three re­gions, ev­i­dence that the market con­tin­ues to grow de­spite some chal­leng­ing con­di­tions – in­clud­ing the LVR [loan-to-value ra­tio] re­stric­tions and banks con­tin­u­ing to tighten lend­ing con­di­tions.’’

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