Real estate agencies estimated to have earned $440.5m in residential commission in Q3

Property / news

Residential commission for real estate agencies rose 10% in the third quarter year-on-year, showing signs of steady growth

23rd Oct 24, 11:30am by Greg Ninness

Residential real estate agencies appear to have had a reasonable third quarter this year, with total sales commissions up almost 10% compared to the third quarter (Q3) last year.

Interest.co.nz estimates the industry earned $440.5 million in gross residential sales commissions in Q3 this year, compared to $400.9 million in Q3 last year.

As the graph below shows, quarterly commission levels have climbed slowly but steadily this year. In Q3 they were at their highest level in any quarter since Q1 2022, which was at the tail end of the post-Covid lockdown boom.

However commission levels are still well below the estimated record high of $693.4 million achieved at the peak of the boom in Q4 2020.

The latest result suggests industry revenues are now well up on where they were prior to Covid, and are showing some signs of ongoing growth. However, they show no signs of returning to the extraordinary levels achieved in the Covid-era boom of 2020-2021.

But neither do they show any signs of an imminent crash, unless there is an unexpectedly significant decline in sales over the coming summer months.

Around the main centres, the sale of residential property in Auckland earned the industry an estimated $164.7m in gross commissions in Q3, followed by Canterbury $65.0m, Wellington $42.2m, Waikato $41.6m, Bay of Plenty $28.8m and Otago $23.4m.

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34 Comments

by Chairman Moa | 23rd Oct 24, 11:36am 1729636581

It's a funny industry, only the top 5% are earning extraordinary amount of money, the remaining are just making ends meet.

by Zwifter | 23rd Oct 24, 11:57am 1729637837

So pretty much exactly the same as the rest of the available jobs out there then ? The top 5% are the only ones making big money.

by Yvil | 23rd Oct 24, 1:44pm 1729644264

So pretty much exactly the same as the rest of the available jobs out there then ? The top 5% are the only ones making big money

by Slapheid | 23rd Oct 24, 2:29pm 1729646971

Sorry to see that your still suffering the Palilalia. Best of luck...

by Yvil | 23rd Oct 24, 4:19pm 1729653599

by Llama_360 | 23rd Oct 24, 2:39pm 1729647569

I know of one agent who works Mon-Fri in a vape shop and sells houses in the weekend.

by Averageman | 23rd Oct 24, 11:39am 1729636744

Bolly darling. Will have been a while between drinks for a few.

by yeahrightmate | 23rd Oct 24, 11:54am 1729637678

Why is it that i loath these pin striped suit, veneered teeth, leased Audi types so much?

by WestieAJ | 23rd Oct 24, 11:56am 1729637816

You reckon you can sell my house for 1 million. How about I give you 50% commission on anything you get over 950K and nothing if it sells under 950k. No!!

I didn't think so.

by Murray Falconer | 23rd Oct 24, 1:45pm 1729644359

Too right. That's a great offer for anyone able to walk their talk about being able to sell for more than you could privately.

by Zwifter | 23rd Oct 24, 11:58am 1729637932

That cannot be right Greg, the market is tanking according to most one here. No room for any good news on this site.

by J.C. | 23rd Oct 24, 12:22pm 1729639347

If it's any consolation Z, I'll come in and bat for you and the REAs. I've always believed commission-based gigs selling houses and cars are unfairly looked down upon. The scorn and condescension are unwarranted, particularly by middle-management public sector types who collect a paycheck regardless of what they actually achieve. Honestly speaking, I've thought about throwing my hat into the ring and sell houses. Have a mate who's a natural salesperson and has done well in the game. Used to be a DJ.

by Kohukohunui | 23rd Oct 24, 12:37pm 1729640253

particularly by middle-management public sector types who collect a paycheck regardless of what they actually achieve

Well, that's not setting the bar very high.

by J.C. | 23rd Oct 24, 12:42pm 1729640537

I think you understand what I'm saying. The REAs and car salespeople cannot sit back and expect a weekly pay cheque. Different incentives.

by Zwifter | 23rd Oct 24, 12:56pm 1729641374

Its actually a pretty hard job if done right and anyone who has been in sales will know, the rest are clueless. You have to be there for a while, the best have been doing it like 20 years because its based on repeat business on a very slow cycle of 4 plus years. Do a good job and you will get the same buyer and seller back the next time they are looking for a house. The hours are horrible, weekend open homes and follow up call sometimes till 9pm at night they don't really stop its a 7 day a week job.

by Yvil | 23rd Oct 24, 1:47pm 1729644463

It's also a job were you have to say goodbye to your weekends and not party excessively on Fridays and Saturdays.

by kiwi_overseas | 23rd Oct 24, 12:23pm 1729639429

Absurd.

They get paid a fortune as the middle men overseeing NZers wastefully bidding up land prices against each other with zero productivity gain.

NZ has wasted $500bn bidding up land prices that should have gone into productive businesses instead.

by J.C. | 23rd Oct 24, 12:38pm 1729640299

NZ has wasted $500bn bidding up land prices that should have gone into productive businesses instead.

Like ZURU? To be fair, not everyone is like the Mowbrays.

by Blackbeard | 23rd Oct 24, 2:17pm 1729646261

Unfortunately the RBNZ uses property as a mechanism to inject $NZ into the economy via bank mortgage lending. My argument is why not hold the OCR at say 6% and use tax fluctuation as a means to stimulate the economy, would be far reaching and farer. Tax is used as a mechanism to decrease or destroy $NZ in the economy, as is someone paying off their mortgage.

by Kohukohunui | 23rd Oct 24, 12:24pm 1729639461

Interest.co.nz estimates the industry earned $440.5 million in gross residential sales commissions in Q3 this year

Did it really though?

by tomjones_04 | 23rd Oct 24, 12:57pm 1729641455

"Earned" !!!??

by starrider | 24th Oct 24, 10:59am 1729720793

Clipped

FTFY

by Yvil | 23rd Oct 24, 1:49pm 1729644564

Residential real estate agencies appear to have had a reasonable third quarter this year, with total sales commissions up almost 10% compared to the third quarter (Q3) last year.

How is this possible, when there are fewer sales and lower prices than a year ago? Something doesn't add up. (their commission's haven't increased on aggregate)

by Greg Ninness | 23rd Oct 24, 3:17pm 1729649877

Sales volumes were up slightly year on year while the average commission was down slightly.

by Ty Coch | 23rd Oct 24, 4:08pm 1729652928

Wouldn't sales volumes have to be up at least 10% to offset a drop in average commission and still result in a nearly 10% increase in total commission?

by ozzzy2 | 23rd Oct 24, 3:14pm 1729649648

So, (don't you just hate it when people start a conversation with, So) So, house prices have doubled in the past 5 years as has there commission, yet they are/were often selling within days.. It's an industry that has no (Gov) regulations, and, easy money always attracts its fair share of unscrupulous sharks too. Just saying.

by 21Trillion | 23rd Oct 24, 8:47pm 1729669661

Who would've thought that selling ponzi schemes was so lucrative

by agnostium | 24th Oct 24, 12:08am 1729681689

Headline: Eleven bidders slug it out for worst house on best street

Real story: sold for 2.6M = 1 million under CV.

When you're having to start bidding by discounting 45% from peak value then you're probably going to get some bidders. Consistent with prices being roughly 30% from peak (and still falling).

https://www.oneroof.co.nz/news/eleven-bidders-slug-it-out-for-the-worst…

by Murray Falconer | 24th Oct 24, 12:12pm 1729725153

Villa that had been vacant for 10 years fetches $2.66m at auction.

Which is why I want a Land Value Tax. Every year the owner would either contribute to govt tax take or sell/rent and increase supply (something Lab/Nat seem to want even if they're too thick to realise there are ways to increase supply without building a thing).

by 1689 Baptist | 24th Oct 24, 9:29am 1729715394

I'm trying to figure out what has happened here. Has Zwifter-Yvil inadvertently outed themself for having duplicate accounts?

Did Yvil mess up trying to cite Zwifter?

Are the two users of such unity of mind that they said the same thing with the same words?

Why does Zwifter's have a full stop and not Yvil's?

This mystery fascinates me.

by Zwifter | 24th Oct 24, 2:11pm 1729732286

Great minds think alike.

by Yvil | 25th Oct 24, 10:44am 1729806266

I'm trying to figure out what has happened here. Has Zwifter-Yvil inadvertently outed themself for having duplicate accounts?

Did Yvil mess up trying to cite Zwifter?

Are the two users of such unity of mind that they said the same thing with the same words?

Why does Zwifter's have a full stop and not Yvil's?

This mystery fascinates me

by Yvil | 25th Oct 24, 10:48am 1729806512

Actually, I was going to write a very similar reply as Zwifter, so I thought it was easier and faster to copy and paste. I just didn't quite copy the last fullstop. I also didn't copy and paste the last point of your comment, since you missed the point of my comment. ;-)

by ChrisOfNoFame | 24th Oct 24, 12:25pm 1729725943

We need laws in NZ to price things - like commissions, council fees, etc. - to the actual cost to perform the service rather than linking the cost to some other asset price.

Hidden price increases, because services are charged by percentages of another cost, is screwing NZ Inc. and massively distorting the effect of 'inflation'.

For example, between 2019 and 2021, house prices went up dramatically. Did the cost to sell - to the agent - go up by a similar amount? Hell no! But because they charge by a % of the sale price ... They made out like bandits to do nothing more than they were doing already!

The same - by the way - applies to banks, councils, etc., that link fees and/or services to the asset price - rather than to the work they actually perform.