NZ real estate agencies earned an estimated $455m in residential sales commissions in Q1 this year

Although real estate agencies' commission revenue has improved substantially over the last two years, there's been very little long-term growth

Property / news

Although real estate agencies' commission revenue has improved substantially over the last two years, there's been very little long-term growth

24th Apr 25, 9:29am by Greg Ninness

Image: StockCake

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

by EpsomArtsandCrafts | 24th Apr 25, 10:25am 1745447141

$25k - $60k to sell a house, really?

by Retired-Poppy | 24th Apr 25, 11:00am 1745449223

Yeah - it's back breaking work wearing down stubborn vendors to capitulation....

by Averageman | 24th Apr 25, 4:40pm 1745469639

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.

by Yvil | 24th Apr 25, 12:52pm 1745455954

Have you sold yourself before ?

by kiwikidsnz | 24th Apr 25, 3:55pm 1745466907

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.

by Averageman | 24th Apr 25, 4:29pm 1745468978

Multiple times.

by Nifty | 24th Apr 25, 12:54pm 1745456076

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?

by Averageman | 24th Apr 25, 4:40pm 1745469611

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.

by Nifty | 24th Apr 25, 7:42pm 1745480548

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.

by IT GUY | 24th Apr 25, 7:02pm 1745478131

I agree the record number of unsold listings only points to lala and further falls.

by mfd | 24th Apr 25, 1:12pm 1745457166

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.

by kiwikidsnz | 24th Apr 25, 3:54pm 1745466856

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

by DonKerrBab | 25th Apr 25, 9:24am 1745529886

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.

by IT GUY | 25th Apr 25, 11:52am 1745538762

Holy mother of GOD,

DO NOT GIVE THEM IDEAS!

by Yvil | 24th Apr 25, 1:19pm 1745457571

Epsom ArtsAndCrafts, why don't you give up your job and open up a RE agency, charging only 1% commission then ?