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Vendors paid an estimated $1.77 billion in residential real estate sales commissions last year

Property / analysis
Vendors paid an estimated $1.77 billion in residential real estate sales commissions last year
28th Jan 25, 12:05pm by Greg Ninness
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The real estate industry enjoyed a strong recovery in residential sales commission last year, although it still remained well below the 2021 peak.

Interest.co.nz estimates real estate agencies earned $1.77 billion in gross commissions from residential property sales in 2024, up 16% from 2023.

Last year's results brought an end to the two year decline in commission revenue for the industry following the 2021 peak, when total commissions were estimated to have topped $2.34 billion. See the chart below for the annual trend since 2018.

The growth in commission levels last year was mainly driven by an increase in sales numbers rather than an increase in selling prices.

Interest.co.nz recorded more than 70,000 residential sales last year, up 14% compared to 2023 but down 19% compared to the 2021 peak.

The growth in sales volumes last year, and the consequential rise in commission levels, was solid, with sales in all four quarters of 2024 running ahead of where they were in the same quarter of 2023.

The average gross commission paid by vendors last year is estimated at just over $25,000, up 2% compared to 2023 but down 7% compared to the 2021 peak.

The growth in agency commission revenue last year doesn't just signal a significant improvement in the industry's fortunes compared to the previous two years, it also marks a return to growth from pre-Covid levels.

The figures also underline that the main driver of the industry's fortunes is the number of sales made, rather than the prices achieved.

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21 Comments

by  Gummy Bear Hero  |  28th Jan 25, 12:10pm 1738019435

... real estate commissions are up ... I'm not sure Greg , if we're meant to applaud that news  ... or to hiss derisively ... 

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by  sammnz  |  28th Jan 25, 12:21pm 1738020097

I have been seeing new RE agent firms pop up locally, hopefully that will start encouraging competition and lower fees for selling property. I don't know how people choose a selling agent these days, but if I were in the market I'd be looking at cost first, because I don't think there's as much value as what agents think there are by listing with a 'TOP AGENT FOR X REGION 2022', a billboard on a bus stop and some flyers force fed into your mailbox .

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by  Gummy Bear Hero  |  28th Jan 25, 12:29pm 1738020553

... a couple of agents here have set up their own boutique agency with the claim that their fee tops out at $ 12 500 ...

I like that ... some healthy competition within the sector ...

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by  RealAgent  |  29th Jan 25, 8:46am 1738093585

Here’s the Cold, Hard Truth About Selecting an Agent

Hire a cheap agent, and you're screwing yourself. They won't do anything more than you can do on your own, which makes them the most expensive mistake you can make.

A killer agent isn't some billboard clown or slick salesperson from a big-brand agency. The right agent could charge 5%, blow past your asking price, and make every cent worth it.

Ready for some uncomfortable facts?

  1. No one ever buys a property because of the agent.
  2. The agency brand means nothing to buyers.
  3. High-profile agents are just high on ego.
  4. Selling hundreds of properties doesn’t make you great—it makes you a conveyor belt where you don’t have time to do the best for your clients.
  5. Being in the game for decades just means you’re old, not good.
  6. "Local expert"? More like local myth.
  7. Stay away from agents who market themselves as a “TEAM”—you only need one agent to sell a property.

Stop being fooled by big brands (built on clients' marketing dollars) and shiny brochures. Get an agent who doesn’t need to market themselves on your dime, knows how to close deals, and makes you money—because that’s all that matters.

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by  linklater01  |  29th Jan 25, 9:09am 1738094965

RealAgent,

The cold hard truth is that RE agents in NZ are vastly overpaid. When I sold my home in Scotland in 2003, I paid the standard commission of.....1% with no extras.

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by  Mr Ed  |  28th Jan 25, 12:25pm 1738020310

The Buzzard's wings are flapping again.

Cue increased high-profile advertising of gormless individuals in their clone uniforms of cheap suits with blue/white shirts,  insincere poses, and claiming to possess  "integrity" 😂

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by  Toye  |  28th Jan 25, 12:25pm 1738020318

Before the spruikers wet themselves add the line for available stock versus sales numbers.

No, it's not good. 

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17
by  Yvil  |  28th Jan 25, 3:40pm 1738032056

I thought you wouldn't like the news that RE agents made more money in 2024, and that you would somehow spin it into your beloved bad news.  Mission accomplished, lol.

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by  Toye  |  28th Jan 25, 4:14pm 1738034087

No spin. You can choose to keep your eyes closed. That is your prerogative.

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by  RookieInvestor  |  28th Jan 25, 5:12pm 1738037571

That has nothing to do with RE and their commission, only Toye Boy making sure he spreads the word that he wants the NZ housing market to burn.

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by  interesting1234  |  29th Jan 25, 8:08am 1738091285

I wouldn't say burn, but another healthy drop will be better for the long term future of New Zealanders. It is a crying same that many have to choose between having children or spending another several years into their 30's saving to by a house. We need this to keep communities strong, instead of continue the growing divide between the haves and have not's. 

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by  Averageman  |  28th Jan 25, 1:07pm 1738022839

Take out 2021, the year of policy stupidity, and it looks like a more or less normal year for agents.

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by  ozzzy2  |  28th Jan 25, 1:12pm 1738023178

Probably one of the most easily manipulated and rortable industries out there. 

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by  agnostium  |  28th Jan 25, 2:53pm 1738029186

https://www.rnz.co.nz/news/in-depth/540017/hundreds-of-new-builds-in-au…

I wonder how much of that commission revenue was earned selling to gullible people in flood zones. 

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by  safeashouses  |  28th Jan 25, 4:04pm 1738033441

Good news and bad news

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by  Dick Mammoth  |  28th Jan 25, 8:54pm 1738050892

Two things i have noticed this time around on the circus is that agents now get a listing and pretty much its up to you to make the moves , very little follow up from the agents . You either like their listing or find something else.The other thing is the selling commission with a bit of an arm twist is 2%

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by  IT GUY  |  28th Jan 25, 10:06pm 1738055193

Few of them would understand chains...

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by  Mr Ed  |  1st Feb 25, 9:25pm 1738398321

Start at 1.5% and work downwards

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by  Active relaxer  |  29th Jan 25, 9:21am 1738095704

Late to this, but I’ve questioned the value of RE commissions for a long time. To the point I have sold three of my own houses through private sales over the years. 

 

You’ll have heard the advice given to buyers to be aware that the agent is not their friend, they work for the seller. My view is that agents don’t work for the vendor either, they work for themselves (or their franchise).

 

As this article says, it’s the number of sales that earns income for REAs, not the sales prices they achieve. Do the math - on a flat percentage commission, what’s the incremental value of achieving an extra $50-$100k on a $1m plus sale? Esp when they have to share the commission with their boss. The agent’s incentive is to sell, minimise their costs (mainly their work hours) and move on to the next sale. 

 

Like all salespeople, agents put the bulk of their effort up-front, into selling themselves to the vendor. They get the seller to pay all the extra costs such as marketing, website listing fee, staging and home improvements to make the house more appealing. The final cost to the seller can be enormous (and includes GST of course). Once the vendor has paid for all that, the agent has also benefited by collecting a number of helpful new buyer and seller leads. Who benefits the most from that for sale/ advertising sign on your fence?

Yes, an agent will do some open homes and take calls, but that is easy and can even be delegated. There is some benefit in having a negotiator to close the deal at the end. 

 

There is a wealth of market information available now to allow vendors to understand the value of their homes and who wants to buy. You can hire specialists to do the photography, maintenance and staging etc. Everyone looks at Trademe, so you don’t need to do a lot of marketing - but you can if you want.

We don’t need agents and we don’t need to pay their massive commissions.

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by  Averageman  |  29th Jan 25, 10:14am 1738098859

Yep. Have sold three houses myself. If you have half a commercial brain its not as hard as you think. Just don't get emotional. A lot of data re other sales is free online these days, or available via agents thinking they are getting a new listing. Clean the place and de clutter, take nice photos, make a brochure, purchase a standard sale and purchase agreement via your lawyer (read and understand it), Trademe listing and.....save a shed load.

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by  mikekirk29  |  29th Jan 25, 10:33am 1738099980

NZ total sales 2004: 184,504

2009: 115,551

2019: 139,995

2021:174,370

2024:105,058

Add in what pop of NZ was in those years.

That tells you what state of housing "market" is in NZ

Fairly plain that price means fewer buyers can afford to buy.

Auckland sales 2012: 58,186

2009: 35,248

2024: 31,243

2004: 58,313

 

Lot more people and a lot fewer sales.

By the way, a lot of REA don't sell many per year. About 50% of sales are to 20% of Agents in Auckland.

if you go through all the Agents in an area like Hibiscus Coast, as I did a few years back, and check how many listings are held by each, it's easy to verify this.

Sales in 2020-21 were hyperbolic due to ludicrous interest rates.

That is not coming back

And bond market won't allow rates to drop more than .75% in total in next 2 years. 

Price increases, if any , will choke off FHB purchases.

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