The real estate industry is estimated to have earned $402 million in residential commissions in the first quarter of this year. It was the calm before the storm

The real estate industry is estimated to have earned $402 million in residential commissions in the first quarter of this year. It was the calm before the storm

By Greg Ninness

The real estate industry is estimated to have earned a whopping $402 million in gross residential sales commissions in the first quarter of this year, in spite of the COVID-19 lockdown impacting sales in March.

That was up 14% on the first quarter of last year, giving the industry its highest first quarter earnings from residential sales since began estimating gross commission levels in 2016.

The robust commission earnings were the result of buoyant sales levels and record selling prices being achieved in several regions.

Commission levels for the first quarter would have been even higher if the lockdown had not virtually closed the market down in late March.

In January and February sales were running 7% ahead of the same period last year and the industry was heading for a bumper first quarter, with March usually being the busiest month of the year.

But the abrupt slowdown towards the end of the month meant sales in March ended up about 1% down on March last year, taking the shine off total commissions.

Even so, commission were at a a very healthy level for the time and year, especially in Auckland. It is estimated agencies earned $155 million in gross residential sales commissions in Auckland during the first quarter of this year, which was up a whopping 30% on the same period of last year.

Commission levels in Auckland had been relatively subdued compared to the rest of the country for the last couple of years and the Auckland market was was just starting to spring back into life over summer.

But the effects of the lockdown will really start to bite the industry this month, with sales levels likely to remain at barely a trickle even if the lockdown is reduced form Level 4 to Level 3.

It is likely that even at Level 3, agents will not be able to hold open homes and it is doubtful that they will even be able to give individual people private viewings of homes, so it is likely that the industry won't start to get properly back on its feet until the restrictions go back down to Level 2.

By then we will be heading towards winter and with many economists picking that the country is sliding into recession, it could be a long time before the real estate industry starts earning the sort of money again that it did in the first quarter of this year.

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Yes, we all can be assured - the first beneficiary of these countless handout during the the deep rooted F.I.RE economy - private/commercial landlords, banks, RE investors - that how it has been designed by neoliberal architect.
Ouh, asking another handout, despite already being made as the first beneficiaries for this wage subsidy:

I’d be concerned with even more Kiwi homes being snapped up by foreigners
The Chinese are presently buying up Italian businesses & property due to coronavirus ruining Italy
Expect Australia to receive similar treatment albeit they’ll complain China is taking over but they’ll take the cash.
Who really cares about Real Estate agents ? They’ll survive


REA's, enriching themselves by ruining FHB's futures.


Perhaps if they cut down on lattes and avocado on toast they wouldn't need handouts

The joys of the internet.. Poe's Law in action

Wish there would be something that you could use to be able to tell how many avocados and lattes you need to not to have so you can save for a deposit. Total fallacy my friend

You're in luck b21, Here you go: BBC The avocado toast index: How many breakfasts to buy a house?

What a brilliant resource. So to buy that property would mean giving up somewhere between 10000 and 20000 avocados on toast. I'll have plenty of time for joyful anticipation of my new property, while waiting until I'm 120. Already dreaming.

Or just wait a year or so, with house prices at least 20% cheaper than now. This is a lot of less avocados.

Haha, awesome. Although it does not take into account that people need to eat something else instead, which would probably double those periods.


That was the top of the market in hindsight now for the opposite to take effect starting from the regions that were last to join in to the boom all the way back to Auckland. This will be great in the longrun as we have to stop playing monoply and now invest in industries that will create longterm jobs for real people not realestate agents.


Yes absolutely!! We've got to get rid of the false economy mostly created by nine years of National government that led to just relying a FIRE economy (Finance, insurance, and real estate). We need to focus on supporting our real economies for GDP growth: Farming, Fisheries, Manufacturing, Tech, Education etc...

We all know that the NZ false economy is on very thin ice by creating more and more debt, Winter may be almost here but it's time to prepare for Spring before that thin ice melts.

National's nine years were the best nine years of our entire generation , they were our glory years as a nation, historians will look back fondly on those wonderful years of leadership of John Key .

Particularly after the horror years of Ms Clark , and that awful little Communist Michael Cullen , it was lovely to see our new PM , John Key come on the stage that evening of the election results , with his wife and young family, someone normal , someone we could relate to .

National steered us through the GFC , achieved almost full employment , ran budget surplus even with the GFC , the tide lifted all vessels and wealth trickled everywhere.

Dubbed the Rockstar economy, Bill English tipped as best FM in the OECD , we saw rising living standards , huge economic growth and increase in GDP , it was wonderful, just wonderful

Every New Zealander should feel proud and privileged to have lived through those wonderful 9 years

I'll look at those years as the time the NZ environments downhill slide accelerated and backed the country into a financial and ecological corner.

I'll look at those years as the time the NZ environments downhill slide accelerated and backed the country into a financial and ecological corner.


If you actually want to discourage investment in land and encourage investment in productive capital, you need to shift the incentives back. Bring back land value tax unloopholed and reduce taxes on productivity like GST and create an income tax free bracket with the proceeds.


Yes even the UK had the good sense to reduce their Business rate tax to 19%. I vote we do the same to encourage and support real economies, but exclude FIRE related economy business form that new tax rate. Finance, Insurance and Real Estate business can pay the current higher rate of 28% corporate tax rate. All other business should benefit from the lower corporate tax rate of 19% to help them grow.

Also here's a list of the global Corporate Tax Rates, as you can see NZ's is quite high in comparison to the rest of the world at 28%. Here's some corporate tax rates examples from around the world: Hong Kong is 16.5%, UK 19%, Germany 15%, Singapore 17%, Switzerland 8.5%, USA 21%, Russia 20%.
Link: Deloitte Corporate Tax Rates 2015-2019, International Tax.

UK was supposed to have gone down to 18% this month too but a pesky matter of a global pandemic changed the landscape.

Yep I wonder how on earth the UK is going to handle Brexit as well in the next few years whilst we all recover from this pandemic.

How many in fact GET that commission?
Abut 30% of agents have about 70% of the listings
6500 agents in Auckland, 2500 roughly sales pcm.
So, on average (ha) each will get one comm every 3. months.
Assuming a $900k house and 3% comm, and agent getting 65% of the comms, that is an income of $17,550 every 3m or $70,200 pa. Not a princely sum.

$70,200 pa less tax, expenses?

Tax needs to be deducted from that.

Agreed ,those statistics need to be broken down ,in the area of sales commissions in any industry , there will be a few high performers making a lot ;but,generally most would be just getting by.

Would be good to know the median houses sold per year by an agent — one sale every three months seems very low. Perhaps a lot of that 6,500 aren't active or full time.


I have always thought that the only thing that would turn the house prices around would have to be something significant, A natural disaster etc With all that is happening in the world and to our own economy there is only one way the property market would be heading. It's unfortunate as a lot of people will be hit hard.


Good they can afford to take the hit now as have been minting money for over a decade. and more so in the last five to seven years.

So now should not try to fleece money by promoting false Propoganda despite being fully aware that the housing market is going to take a hit.

Karma is a Great Leveller besides being Bitich.

Good critique Greg of the Auckland market over the past year. Its exactly my experience. After the slowest winter in years brought about by all the wait and see of government rule changes the market quickly caught on fire (or sectors of the market did) after the mid Spring interest rate drops. Suddenly mid range buyers were bankable for buying stock $100k higher than they were over the winter and liked what they were seeing at that level a lot better. We were still ripping in March but now running out of good stock. I sold 4 houses in March (by 17 March), but I expect if will be years before that type of vitality in the market resumes.
As for the detractors please remember we are first and foremost agents and marketers. The ones making the real money are our Vendors. To have the knowledge and ability to gain listings and make decent money in this industry does not come without the same type of dedication that it takes in any other high value sales position. I don't know any agents on the upper end of the scale who work less than 50 hours a week to stay at the top, and generally it takes many years of experience in your market to get there-Most don't. And are there some bums out there-yes, but the Vendor's who fall for them usually haven't done their homework.

No worries as long as Karma is clean, one does not need to worry and if not........

Bears repeating because not many put it all in one place: interest rates fell, a lot 2003 - 20. Immigration rose a lot, as did population, and housing stock
In 2003-04 (12m to end of March) NZ had 121, 190 sales. In 2019-20 it was 78,291.
In Auckland the 2003-4 level was 40,170 and in 2019-20 it was 23,561.

Sales are the "market" - where buyers and sellers interact. Price is the median between buyer and seller.

Clearly, price rise has been too much for average buyer.

For some reason, many contributors do not like to admit that prices are too high and that is why sales have fallen, despite all the factors they constantly cite as "drivers" of the market.

ohhh, the anger and bitterness is strong today

400,000 employed in tourism. How many of those will be struggling to stay in their homes-or even just pay the rent? Now I think the Aucklander's who rushed to the Regions for "yield" will be the ones most vulnerable to the long lasting tourism downturn, as the Regions will be most affected.

And probably around 350k of them are here on work visas...

Sir John Key warning........ article in NZ Herald.

Wonder what is it that he is saying that is not already in public domain.

Not only NZ but world economy is going to suffer like never before.


This worlds insane. Tony Blair who invaded Iraq (with no WMD's) then became the middle East Peace Envoy, Robert Mugabe who destroyed Zimbabwe's economy and health system was given the title of "goodwill ambassador" by the current conman leading the W.H.O. Next our Sir John Key will be employed as New Zealand's homeless ambassador in charge. It will be his job to look after the homeless people he made homeless through his constant denials of a housing crisis being caused by foreign buyers, whilst at the same time selling his home for enormous profits to a foreign buyer. What is happening to NZ?

A very strong result for Re agents, hopefully it will help them in the lean months ahead

Lean YEARS ahead, not months. The economy will re-balance from parasitic house speculation to the productive real economy. After the GFC, sales decreased significantly for years. It is going to be a hard, long slog for the real economy - which means no much money left for speculative activities that suck on the real economy.

Arguably, RE Agents commission are just about to soar! As a wave of distressed sales sweeps through the economy, and they'll be run off their feet passing properties from one owner to the next. But for one thing......
Most RE Agents are also property owners themselves; portfolio owners, even, and the last thing they want is for prices to fall with any increase in turnover. So, they are caught between the support of their wages ( commissions) and the support of their assets.( prices)
Trying to support the latter is likely to be at the expense of the former, and as prices 'ease' so will commissions as the velocity of transaction slows.


Er no.
Sales in last 2008-10 decline fell 30%. Bound to be worse this time.

Interesting comment. I expect there will be a mass exodus from the industry pretty sharpish, and those left could indeed do quite well. Actual turnover of homes was high in the USA during the GFC, with most proprerties sold in certain areas distressed sales. Whether NZ agents can adapt to selling under such conditions I don't know. It requires a very different selling approach and the easy money is gone. Talented, hard-working agents who know how to actually value a property (in short supply here) could do very well.

There is a typo in the title of this article, it says that the used house sales industry EARNED $402m??


A whopping $402 Million in residential sales commissions. For services largely unproductive . Adds nothing to the value of the house.Only adds to the Price!!

One thing for sure is that Real Estate Agents are going to have to take a drop in their over bloated sales commission rates in order to attract property listings. Since London REA's only charge 1% commission rates that included marketing as well then so can Auckland REA's. That's how you get property prices to reduce softly to realistic levels without crashing.

Unfortunately the RE industry has the same issue in NZ as telcos and supermarkets- that being market dominance by several large players who are hell bent on maintaining the 4% plus model. When you think the 4% model probably was realistic in the days of houses being 3-4 times the average wage, the cut is so far out of whack these days with Auckland running at a whooping 10 of 11 times household income! (Note the multiplier has moved from average wage of an individual to household income)

Some additional figures would be interesting, like how much the legal sector made from those sales, how much the valuers, building report companies, banking (fees etc), all made from those sales. Just interested, that's all. Afterall, isn't this the reason that the property market has become so essential to the economy, not necessarily the increase in asset value, but the money made(spent) each time a unit is bought and sold. The increase in price simply increases those costs, (or earnings).

I think there will now be less of the popping of champagne corks and more of pop goes the weasel. The RE agents are in real trouble now and many will be pulling the pin on it. I even had an e-mail a week ago advising of one who had already quit.

Vultures are not as loved as much as the Lions but are just as important none the less under the present system.

I mean you don't have to pay them commission, you can sell the house yourself, or if you use them you could pay them like your lawyer, value, and accountant in that every time you speak to them you get an invoice.

Go on.

Interesting you would put them in the same category as educated professionals such as lawyers and accountants?

Not really, but I suppose you can read anything into it depending on your view. And you missed out I mentioned valuers as well.

My point was that you pay by the hour for others involved in the property transaction process, why not RE. or conversely why not pay the others on commission?

Sale of a house
Solicitor- several years study at university. Navigated through all the conditions in the S& P Agreement, transfer of property & registration in Purchaser's name, charged as collateral to bank, received keys to vacant possession. Invoice- Less than $3,000.

Real Estate Agent - a has-been at several jobs where she obviously did not do well, largely a housewife, spent equally as much ( if not more ) time chasing fresh listings than the sale of the property. 3 open homes. Invoiced $53,000 plus.

Would a minimum wage earner have that sum for a whole year's work?

Would a highly-skilled surgeon earn that much for the same hours & effort ?

Where's the logic, where's the justification ? Go figure out, mate

Mac, firstly if the solicitors bill was just under $3k for conveyancing for a purchase of a home I suggest That it was an expensive solicitor.
Secondly $53k commission for the sale of a home?
Was clearly a luxury home and did the agent achieve a price more than what a private seller would’ve received?
If so then It was money well spent, if not then it was not money well spent.
However I would point out that a good agent is worth their weight in gold, and if you believe it is an easy job, then go and give it a go and see how long you last!,,

During the boom the agent could have been a cardboard cut out and still got the same super high sale price.

V data driven commentary.
Why do you not try a little research and comment on how much the 1% or even 0.01% of share holder rich do for their returns??

Here's an interesting read regarding what's going on in the Australian property market at the moment. The New Daily: Why the coronavirus could slash property prices by 30 per cent. "SQM Research chief executive Louis Christopher has described the coronavirus pandemic has an economic “tsunami” that could slash property prices by up to 30 per cent".

"Such an outcome is based on Mr Christopher’s worst-case scenario, where Australia either experiences a second wave of infections after restrictions are lifted, or its new case count never reaches zero".

Instead of worrying about how much a Real!estate agent receives, isn’t it more appropriate to be more concerned about how much people are receiving in welfare handouts?
There are far too many people in NZ that believe it is up to the taxpayer to support their lifestyle by way of weekly benefits!
How is paying out these billions of dollars of benefit to NZ?
I think that it is time that this rort was stopped and people required to work for their weekly payment.
Real Estate Agents clearly are required or they would be extinct.

Yes they should contribute back in exchange for the bene which would help their mental wellbeing and sense of worth. Excellent point TM2

OK then TM2 a taxpayer and never having been on a benefit, I will stop giving my taxpayer dollars to you, in the form of the "accommodation supplement", so your tenants can afford to pay your rents. As you are such an astute business man, and run such a great business model, you should be able to find a way around it :) Happy Daze !

Get rid of state houses as well. How stupid giving people false reality paying a meagre 80 bucks to live in a home worth a million. Now would be a very good time to sell off the housing stock. Why? 1.) Flood the market and bring down property values. Tick. 2.) 6 month rent freeze in place for tenants. Tick. 3.) New owners will spend money to upgrade the homes and this will help kickstart the economy. Tick. 4.) Healthy Homes implementation dates will be brought forward under private ownership. Tick. 5.) Cash inflows for govt to cover the deficit.. tick tick. just don't get it do, do you ? Keep those "earned" taxpayer dollars out of the "F.I.R.E" economy and use them to create new industries, research and development, expand and "value add" to existing industries and their products and services etc. This will enable your tenants to have increased wages, to pay your rents - instead of my taxpayer dollar going to "prop up" some landlord somewhere, who believes things will "never change" .....and property is the ONLY way to create wealth.

If you don't like the fact that tenants in state houses are only paying "80 bucks a week" make the Government "an offer they can't refuse", to buy the house :) In reality, it's "true" market forces that should dictate house prices .....not tax breaks for landlords, accommodation supplements, no capital gains tax, no land tax etc etc

They dont call you crazy for nothing haha joking. Did you even read my post before the ad hom ... you say to remove AS but you cant do that and have state housing. AS was brought in about 30 years ago so that non state tenants could get access to subsidies too. Do you think it's fair to only provide subsidies to one group and not another?

You still don't get it do you ......there should be no accommodation benefits of "any kind" ....if a tenant can not afford the rent, live somewhere that they can afford ....if the landlord can't charge the rent needed to keep the "negative gearing" machine going, that's not the taxpayers problem. So brings me back to my comments above, for creating an economy that can pay better wages in the first place !

I'm sorry you live in fantasy land. You don't want AS but happy to an equally distorting state housing. You also keep harping on about better wages from new industries and business. If you remove the safety net and and support of lifestyle you might find that there would be a lot more innovation. The benefit defeats personal endeavour. Btw what do you think of the subsidies paid to social housing providers of which there are many. Conflicting eh. Have a good evening comrade

HW do you understand the simple concept that people actually earn wages from working in a job. Perhaps you don't considering you've never even had a real job or earned a wage. It's because you're so blinkered you can't see how a real economy works!

Landlords rely on the fact that people work hard for wages. Its that very thing that they plan to leverage to pay their mortgages/subside bank profit.

Going to be a super interesting election. It will be the workers vs the leveraged. So far all Nats have voiced is reopening NZ up to China and selling all on NZ off. Its is hard for the COL to say that they want to change the renting dynamic in NZ because of the impact it will have on everyone. Hopefully they realise they have the best excuse in in history to drive change, "Covid".

You know very little about me CJ. Have a good day

"for creating an economy that can pay better wages in the first place"

Tell me how many businesses (manufacturing or other types and here in nz) you have created paying top wages. Quit with the cop-outs of pointing the finger and saying it's for others to do

Next you'll be saying that the NZ housing market is going carry on as usual after this pandemic, continually propped up by a never ending stream or credit. It's you that's in fantasy land HW.

That's right don't answer the question or attempt a response. You behave like this but become completely offended at the slightest bit of banter. That's fine, now I have free rein to mock and criticize you back cheers

Funny both you and the boy2 decided to go off at tangents in regards to my post about how things were going in Australia and their declining market due to the corona virus. Avoiding that subject altogether.

Calling The Man a disparaging nickname is offensive. That makes you a foolish thin-skinned hypocrite CJ.

Sorry dp

Crazy Horse,no idea how many of our tenants get accommodation supplement, but doubt it would many going by who we have as tenants!
Get rid of it if you wish, wouldn’t worry us one iota.
Get rid of the benefits and our taxes would drop.
If the tenant can’t afford the rent we want, then they won’t be renting from us, very simple.
Reality is that the welfare system is not great for NZ as there are just so many that believe it is their entitlement to be given money to live without doing anything for it!!!
Why pick on Real estate Agents when we have this welfare rort going on, is hard to understand?

"If the tenant can’t afford the rent we want, then they won’t be renting from us, very simple" That's very disappointing! Many times in the past you mentioned that you are a caring landlord and providing a service to the community..!

@Chairman Moa .....yes, the "true colours" of TM2, houseworks et al are really coming out in this thread. Great point CM about the "caring and empathetic" landlords and providing a "social service" BS they have been giving us for these last few years.

I used to be a property manager back in the mid 2000's and met many landlords ....some absolutely fantastic, generous, obliging and kind (and who probably wouldn't be on this humble apologies if you are) ...but others who were just extremely mean, charge "maximum" rents, do absolutely no maintenance, treat their tenants like a "cash cow" etc etc

Anyway, I wish houseworks, TM2 etc all the very best and truly hope they have contingencies in place, to handle what is coming up in the next few months, rest of the year and into next year.

Y'all have a wonderful day :)

Crazy Horse
Beneficiary of the FIRE industry complains people dont start businesses and build the economy by paying huge wages. He doesnt do that himself either... of course.

Houseworks quote your comment today to CJ @ 10:39am …..”You know very little about me. Have a good day”


Austraya on fire smoke seen across the planet. Now boooommmming. It's the lucky country mate ... just not if your kiwi HAHAHA

You and Houseworks showing true predictable colours here.
Not a word about crony capitalist practice of legislative capture round world, stock market buy backs and then having handouts form Fed worth $1.7 trillion.
Plus, you will find that poor folk having no income means you sell them more debt, which is how we got in this financial hole in last 40 years thanks to your lot

Mike Kirk you're the real estate agent you did the debt selling mate. As investors we're the ones that got sucked in to your rhetoric of never ending gains. So now if we have to sell up and cash out then you and your REA mates will get in there boots and all stuffing your pockets with commission. Of course you want that.

Record sales based on the drop in official cash rate in Q1. The next four quarters will be super interesting for sure.

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