New Zealand real estate agencies made a reasonable start to the year, with sales commissions in the first quarter (Q1) well up on the same period of the previous two years.
Interest.co.nz estimates NZ agencies received $455 million in gross residential sales commissions in Q1 this year, up 14% compared to Q1 last year, and up a whopping 44% compared to Q1 2023.
However, commission revenue in Q1 remains 23% lower than the Q1 peak in 2021, and is only marginally above where it was pre-Covid. See the graph below for the quarterly trends.
That suggests although commission levels have recovered from the slump of the last two years, there has been very little long-term commission revenue growth for the residential sales industry.
The recovery in commission levels over the last two years has been entirely driven by an improvement in sales volumes, with the estimated average commission declining by 0.9% between Q1 2024 and Q1 2025.
NZ real estate agencies are estimated to have received $1.828 billion in gross residential sales commissions in the 12 months to the end of March this year. That's up 14% on the previous 12 months.
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15 Comments
$25k - $60k to sell a house, really?
Yeah - it's back breaking work wearing down stubborn vendors to capitulation....
Sell it yourself. All sale data pretty much public info do you can see the facts to be realistic on price. In a declining market saving yourself a large commission is seriously not that hard.
Have you sold yourself before ?
I have, more than once however a while back so not in the post 2021 market.
Very straightforward process: agree terms & exchange solicitors contact details to formalise contract.
Whether you get the best price is of course the key question.
Multiple times.
Selling by yourself, in a declining market, would be the most difficult time to do it. If agents are struggling to sell, why do you think you'd be able to it any better?
I'd did say to look at successful recent sales data and be realistic. Aka "the market". Often quoted as prices flew upwards. Now seeming ignored as gravity kicks in.
Agents are often stuck in lala vendor land expectation aka the price they presented to secure the listing. In a boom market it's easy as a little bit of time masks any lies told. In a declining market that doesn't work. Property sits unsold for months and in some cases years as the price further declines #notwinning.
Agents use recent sales data to assess potential sale price. As you said, it's usually the vendor that's in lala land. Majority of vendors are emotionally attached to their home & have unrealistic expectations, therefore would find it hard to meet the market on their own accord.
I agree the record number of unsold listings only points to lala and further falls.
Not all will go to the agent themselves of course, but that's also the case in countries like the UK where commission is more like 1% (I paid 0.8% for my last house sale there).
I often think the situation would be better with half as many agents selling twice as many properties for half the commission, and spending less time on advertising. Not sure how we get there though, other than sellers negotiating and walking away if a reasonable commission isn't offered - there are agents out there that are cheaper.
In a few overseas countries eg Malaysia RE agents commissions are paid 50/50 by both buyer & seller. The intention being to promote agents who represent both parties interests adequately. I've thought that should help reality checks & constrain agents excess enthusiasm for maximum price
In the US you have a buyers and a sellers agent and they charge 2.5% each. Doesn’t seem to be much give in that either.
Holy mother of GOD,
DO NOT GIVE THEM IDEAS!
Epsom ArtsAndCrafts, why don't you give up your job and open up a RE agency, charging only 1% commission then ?
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