Real estate industry estimated to have earned half a billion dollars in residential commissions in Q2

Property / news

Real estate agencies estimated to have earned almost $2 billion in residential commissions in year to June

18th Jul 25, 10:31am by Greg Ninness

Image: StockCake

The housing market may be in the winter doldrums but real estate agents shouldn't be complaining. That's because the industry earned an estimated half a billion dollars in residential sales commissions in the second quarter (Q2) of this year.

Interest.co.nz estimates that real estate agencies earned $501 million in gross residential sales commission in Q2 this year.

That was up by $80 million (19%) from the $421 million the industry is estimated to have earned in Q2 last year, but still down by 15% from the second quarter record of $592 million the industry is estimated to have earned in 2021.

The increase in commission in Q2 this year compared to Q2 last year was mainly driven by increased sales numbers, which were up by 20% in Q2 this year compared to Q2 last year.

The average gross commission has been relatively flat at about $25,000 for the last two years.

Unsurprisingly the most lucrative market for real estate is Auckland, which accounted for around 30% of national residential sales in Q2 this year, earning Auckland agencies around $178 million in commissions.

The average commission in Auckland was just under $30,000.

In the 12 months to June this year real estate agencies throughout the country are estimated to have earned $1.9 billion in gross residential sales commissions.

That figure excludes any additional costs vendors may face such as auction fees, valuations and property presentation costs.

Add on legal costs and the total amount of money being spent selling residential properties each year is likely to be in excess of $2 billion.

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36 Comments

by NZGecko | 18th Jul 25, 10:49am 1752792545

Mongrels and Artful in Deception, the lot of them.

by Phoenix (FKA JC) | 18th Jul 25, 11:39am 1752795584

Mongrels and Artful in Deception, the lot of them

Why? You think REAs should work for free?

by 11boomer11 | 18th Jul 25, 1:05pm 1752800752

Gecko is out debugging, I'll answer for him. REA dont add value by simply swapping the names on a piece of paper. Sharebrokers aren't much better but at least charge less

by AN Other | 18th Jul 25, 1:27pm 1752802055

I'll add more. Their commission percentages haven't changed since house prices were affordable (my first house is now valued 4 - 5 times higher than when I bought it in 1997 and I doubt many of us have stayed in the same job and had a total pay increase that matches that).

by Phoenix (FKA JC) | 18th Jul 25, 2:32pm 1752805946

REA dont add value by simply swapping the names on a piece of paper. Sharebrokers aren't much better but at least charge less

I would say most property sales involve an agent. People exercise their right to use agents. They don't have to, but they do. Ashley Church might not do so, but that's beside the point.

Mate is a high performing REA. Used to be a DJ. Very good salesperson and has the demeanor to work the top end of town. All power to him IMO.

by 11boomer11 | 18th Jul 25, 6:04pm 1752818677

Paula Bennett Sally ridge Matt Chisholm rawdon Christie amongst a list of others

They do sweet FA, but want the big bucks from the big deals

by Phoenix (FKA JC) | 18th Jul 25, 8:53pm 1752828781

I thought Paula Benefit gave up the commercial property sales gig. Too much like hard work - closing sales. She's the Chair of Pharmac (with zero experience in pharmaceutical procurement) and Director and Strategic Advisor at Bayleys (sounds like a meaningless role).

by linklater01 | 18th Jul 25, 2:35pm 1752806102

Phoenix,

To answer, no, but much less. In Scotland I paid the Agent the standard commission of 1% with no extras. He still drove a BMW.

by Phoenix (FKA JC) | 18th Jul 25, 3:12pm 1752808340

Negotiation. Good work.

by mfd | 18th Jul 25, 4:24pm 1752812665

Pretty standard in the UK. I sold my house over there for 0.8% - normal rate is 1% but a small discount as they already managed the property.

Not an expensive house either, but they still showed up and did a good job for the equivalent of $3k or so.

by linklater01 | 19th Jul 25, 8:47am 1752871633

Phoenix,

No negotiation. As I said, that was the standard rate of commission. What I didn't say was that it was only as high as 1% when a certain price was reached, though that was not too demanding. What is entirely clear that agents here are grossly overpaid.

by NZGecko | 18th Jul 25, 3:17pm 1752808637

Hi Pjc, yes and about 0.8%, same as a share broker.

The stories they can spin are notorious.

by powerdownkiwi | 18th Jul 25, 11:09am 1752793787

Earned?

Parasitically syphoned-off, more accurately.

by Zachary Smith | 19th Jul 25, 8:13am 1752869639

"Sigh".

by EpsomArtsandCrafts | 18th Jul 25, 11:32am 1752795136

I've sold your house, that will be $50k please

Thank you so much, I'll transfer it to you right away

by Phoenix (FKA JC) | 18th Jul 25, 2:35pm 1752806128

I've sold your house, that will be $50k please

OK. Then think about banks. They create the mortgages to enable the transactions. No money transferred from anywhere to credit the loan. The ledger is created by keystroke.

Then they charge you for it. For most of your working life.

by mfd | 18th Jul 25, 4:25pm 1752812718

That doesn't help me make sense of $50k for a simple sales process, personally.

by powerdownkiwi | 18th Jul 25, 4:58pm 1752814717

Well, is should.

Because it is the bigger parasitism.

By far.

by mfd | 18th Jul 25, 5:07pm 1752815223

Yes, but if someone steals my wallet I don't feel any better if they point out that someone else has stolen my car.

by powerdownkiwi | 18th Jul 25, 6:14pm 1752819260

No, but your anger is at least proportionate.

Unless of course your car-keys were in your wallet...

by mfd | 18th Jul 25, 9:04pm 1752829494

If there's ever a time to talk about real estate agent commissions rather than bank profits, I think it's under an article on real estate agent commissions. Obviously there are more important topics, but...this is the topic.

by Zachary Smith | 19th Jul 25, 8:58am 1752872287

I can help you understand the commission fees. People believe that an agent can get them more than 50k for the cost of 50k and, more often than not, they are probably right. A bonus is that the seller can also sit back and relax.

by mfd | 19th Jul 25, 9:44am 1752875076

I'd feel better if the commission structure was actually aligned to the sellers interests. Say, 1% commission up to an agreed reasonable value and 5-10% on any exceptional performance beyond that. I don't think I could stomach paying 3% even if they do a half-arsed job.

by rolande | 18th Jul 25, 12:33pm 1752798827

As Finance Insurance Real Estate (FIRE) section of economy expands its crowds out the productive sectors.

Would be interested to see a good % time series applied to NZ

by AN Other | 18th Jul 25, 1:30pm 1752802225

Off on a tangent: Looking at that photo at the top of this article I notice that there isn't a hand holding the middle champagne flute.

by mfd | 18th Jul 25, 4:26pm 1752812779

It's the invisible hand at work.

by Zachary Smith | 19th Jul 25, 8:06am 1752869193

Also one glass appears to be missing a stem and base and the hand in the right foreground appears to have six fingers. It's a classic A.I. creation! The sloppiest of A.I. slop.

by EpsomArtsandCrafts | 18th Jul 25, 3:10pm 1752808248

Kiwi vendors are too soft negotiating with the agent from the outset which is why the commissions are still so high. I don't think the commission rates will be like that in 10 years time though

by Averageman | 18th Jul 25, 4:04pm 1752811446

Yawn. Sell your house yourself. Biggest issue is having a realistic price expectation. The last ten years of sell has been easy pickings. Most listings still "price by speculation"...aka no price listed.

by Active relaxer | 18th Jul 25, 5:38pm 1752817120

Lots of wasted money in that sum. I sold myself last year - for the third time - and happy with the outcome. I think, how long would it take the average person to earn back that commission money on a salary? It's hidden by the house inflation over time, but really it's time out of their life that they're losing.

I don't think REs are highly dishonest, it's just the commissions (incl GST) are too expensive and at least half goes to the agency doesn't it? The flat percentage doesn't reward the agent for getting that last extra 5% the seller might want on the sale price.

I've found when agents are being used, it's often the sellers who are being dishonest. They can hide behind the agent and not disclose things that they'd have to if selling directly. Agents don't ask any hard questions, but why should they, that's the buyer's responsibility.

When selling yourself, it pays to be open about the price range you're aiming for and fix any problems to make it easy for people to buy. Pay for professional photos and do some decent marketing.

by powerdownkiwi | 18th Jul 25, 6:15pm 1752819350

My better half reckons I couldn't sell myself.

Says there would be no takers...

by Active relaxer | 18th Jul 25, 6:25pm 1752819903

Ha ha

by IT GUY | 18th Jul 25, 9:56pm 1752832578

Good on them for making hay while the sun shined.. now is not the time to make hay

It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.

~ George Soros

You must lose you ego to be a great trader.....

by Zachary Smith | 19th Jul 25, 8:29am 1752870589

Sounds like there is still plenty of life left in the Real Estate industry. That's what probably irks many of the commenters here.

by nktokyo | 19th Jul 25, 9:30am 1752874245

What is the point of this article? It's not useful news in any way and I dont see it on any other business publication. Disappointing click bait.

by Zachary Smith | 19th Jul 25, 9:00am 1752872459

I actually thought that too. It makes assertions without supplying any data. Just because the total of commission value has gone up doesn't necessarily mean they are living the high life. What if there are more agents? What if they were barely getting by before? What if it is not being fairly distributed? What if costs have gone up?