The real estate industry is estimated to have earned just over $400 million in residential sales commissions in the second quarter of this year as sales volumes bounced off their lows

The real estate industry is estimated to have earned just over $400 million in residential sales commissions in the second quarter of this year as sales volumes bounced off their lows
Photo: Nick Youngson -

By Greg Ninness

The housing market has bounced off the bottom and sales volumes are now picking up again, according to’s latest quarterly analysis of housing market activity and real estate industry commissions.

According to the latest Real Estate Institute of NZ figures, about 20,400 residential properties were sold in the second quarter (April-June) of this year.

That’s up 10.2% compared to the first quarter, but more importantly up 6.7% compared to the second quarter of last year.

It is the first time quarterly sales have risen versus the same quarter of the previous year since a serious decline in sales volumes began in the second half of 2016.

However the number of homes sold remains down 20% compared to the second quarter of 2016.

The numbers suggest that the housing market went into a serious decline in 2016 which bottomed out the first quarter of this year with sales now picking up again.

The sales increase will be particularly welcome news for people working in the real estate industry because it has a flow on effect on agency commissions. estimates the industry earned $402 million from gross residential sales commissions in the second quarter of this year, up more than $34 million (+9.3%) compared to the second quarter of last year, but still down by almost $67 million (-14.2%) compared to the second quarter of 2016.

The downturn has been especially tough for many commission-based sales people, because according to Real Estate Authority data, the number of registered sales people working in the industry has been at a record high of just under 16,000 since the end of last year.

The combination of a high number of agents chasing fewer sales has seen the average annual number of sales per agent drop from 6.5 in June 2016 to 4.7 sales a year in March this year, a decline of 27.7%.

With more agents chasing fewer sales there has been less commission money to go around, so the recent uptick in sales will have been a welcome development for the industry.

The sales downturn has been particularly hard for agents working in the Auckland market, where the number of licensed sales people is also near a record high and the average annual number of sales per salesperson has steadily declined from more than five sales per salesperson in late 2015 to just over three in March this year.

The upturn in sales that occurred in the second quarter was evident in all regions except Otago, where second quarter sales were largely flat compared to both the first quarter of this year and the second quarter of last year, although rising prices continued to push up the total estimated commission the industry earned in the region.

Although commission rates vary between agencies, people selling an average home on the West Coast of the South Island could expect to pay around $10,000 in gross commission (including GST) while those in Auckland probably be looking at something closer to $26,000.

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poor Real Estate Agents.....someone please set up a give a little page please

Oh, nah, she's right, I might just sit this one out.

$26,000 of commission.

That's 130 hours' work at $200 per hour.

That's similar to a consultants charge, but doesn't mean they are consistently getting that every hour through the year

Rick ,your a financial genius.

Rick ,your a financial genius.

Indeed, mea culpa. And you're a linguistic genius.


Multiplied by the march average number of houses sold per annum - 4.7 - and that's $122k a year.

Damn, I should jump on that boat too!

Remember that most agents will only get about half of the commission, with the agency taking the rest. Top agents get to keep a bit more....

The $26k is in Auckland where the average agent sells 3 houses per year. $78k sounds pretty bad, especially as there will be costs involved.

From having family in the game.. I think you find the curve is nothing like a bell curve. you have to stick at teh game for a long time to build the network to truely do well, and a whole heap of agents that are new to the industry don't make the first year, they can't sell enough to keep their heads above water. And i don't particularly think its from lack of skill or effort, its from not being a known face and having the profile and referrals.

80 hours work @ $200 per hour = $16,000.


Haha, whoops...shoddy misreading of 10,000 and 26,000 and ending with 16,000. Thanks.

Always a pleasure, Rick!

Though mistakes like that I usually associate with Retired-Poppy and Nymad.


Meh, that presumes a real estate agents time is worth $200/hour. They aren't on a par with Laywers or Doctors or CPAs.

Or even the local lawnmowing franchise owner who keeps the gardens looking tidy and has just as good an idea as anyone of the state of the local housing stock and infrastructure....

Alas, good lawyers, (specialist doctors) and accountants earn far more than $200/hour these days.

But they are professional people.........


And honest, caring, etc. Don't usually throw their clients under the bus to make a buck.

Chessmaster, you do know TTP is a Real Estate Agent - right?

(rhetorical question)

meow splat !

Typical "Bull Trap" is happening

These figure cant be right

Gross commissions of $402M between 16,000 RE agents = $25,125 average gross per agent for the quarter.

Take away the agency fees, tax and having to work nights and weekends, youre getting close to minimum wage!

Don't forget they have to pay for the business expenses, i.e. cars, offices, etc.

So an increase in transactions but noticeably at lower prices. Hardly coming out of the bottom. The phases of a bear market.
1. Denial
2. Acceptance
3. Panic
4. Capitulation
I would say that we are just coming out of phase 1. The market is starting to realise that it doesn't 'Always go up!'
This is also the classic 'bear trap' or 'dead cat bounce' before the next phase of unwinding. I'm guessing that by Christmas we'll be where the Aussie market is now, Acceptance and the mainstream (bank sponsored) media unable to hide the realities any longer, by that point we'll have had 6 more months of monthly price falls in the major centres.... What will people talk about when they can't talk about their house going up in value anymore? 'Well Cedric, mine only lost $15,000 last month! how much did you lose?'

Yep, denial. Must say Im constantly impressed at the level of denial, or perhaps commitment, from the Bulls so blindly refusing to shorten sail or change direction in the face of ever increasing headwinds. If this keeps up they will soon be sailing backwards trying not to sink under the weight of their debt. Fun read...

“We also know that some interest-only loans were not investors but they are actually first-home buyers encouraged to go in at the top of the market.”

Ouch. That is sad.

Nic J... I might argue that we are simply going thru a protracted consolidation... ( which is what normally happens ).
For there to be a Capitulation ( your 4 phases of a bear mkt ) , I'd argue that there would need to have been an extreme credit driven blowoff phase , first. ( eg... 16%+ credit growth/yr)
The RBNZ bringing in the LRV rules helped to mitigate that.
For NZ Real Estate to collapse, I think would we would end a deep recession first.

Ricard Vague has written a small book that I think is pretty good .
He argues that all financial crisis is preced by high private sector debt levels, and The "kicker" is that there is a rapid growth in that debt .
His 2 metrics are:
1/ Private sector debt/gdp Ratio
2/ Extreme growth in that ratio over 5 yrs ( implies a debt driven extreme boom in a particular sector, which far exceeds income growth )

Nz has the high private sector debt levels, but it has not had the rapid growth in that debt , that might result in a financial crisis.. ( real Estate crisis )
Debt servicing levels in the Household sector are at pretty safe levels...

Hi Roelof.

I can recognise your arguments and viewpoint, I just have a slightly different one, possibly because I have seen the other side of the coin regarding what is truly serviceable (mortgages) and what is not and I believe that the multiples of income in the Southern hemisphere have got out of whack with sustainability - ie. if Northern Rock and RBS were foolish lending 5 and 6 times multiples (when northern hemisphere rates were similar to southern hemisphere rates are now) then the Aussie banks have been lending like Northern Rock on steroids.

Never before has the Southern Hemisphere been so exposed to Interest Only lending as well. Not in the 2000's, definitely not in the 1990's and no where near in the 1980's.. 12 months from now I believe the credit environment will be nowhere near as loose as it has been over the last 7 years. And in my view It is credit availability and the credit cycle rather than indebtedness or a simple view on recessions that will lead to the next downturn which is only embryonic at this stage but will (like in Oz) have a fairly rapid gestation period.

I'm sure we can agree to hold different positions for now - I'll be interested to see what happens when the veil of secrecy is lifted between the banks and the reserve banks' confidentiality agreement rather than public investigation.

As for your comment on private sector debt levels not having had rapid growth. That's not true, debt levels have nearly doubled between 2011 and 2018.. It's just been masked by lower interest rates and cheaper serviceability.. My argument is that that won't continue as the credit cycle turns and debt will get more expensive as the banks take loses on some of the bad loans they have made. Time will prove me right.... or you right perhaps.

Hi Nic,

As far as I know housing mkt credit was $173 billion in 2008 ..Today it is about $270 billion..
That works out at a compounded growth rate of less than 5%. ( Historically , this might be considered to be a modest growth rate. )

In 2008 medium wage was $729 .. in 2018 it is $959 .. ( compound growth rate of about 3 % ).
Debt servicing as a % of income are almost half of what they were in 2008..

I'm not seeing a large increase in mortgagee sales.... and I'm not really expecting to.. ( unless there is some kind of economic black swan event )

I'm not arguing that you are wrong.... just offering my perspective...

I recommend the linked book... This guy paid a research team to find out what essentially caused the GFC...( what causes financial crises)... and whether there was commonality between all the previous Financial Crises..
The Book made sense to me

Lets compare notes in a couple of yrs..!


Rather than looking at the debt growth rate over a 10 year period, what does it look like over say the last 5?

according to RBNZ c5 series data.
6.50% over 5 years
4.67% over 10 years
7.79% over 15 years

OH NO !! not again ... we didn't even finish celebrating the low numbers published yesterday ....

Damn, have to wait a bit longer to see the crash ...

The Return of the Oozlum Bird!

Very much like an Ostrich, except for the fact that it buries it's head in a different location!

Eco Bird now admits there's going to be a crash. We are just going to have to wait a bit longer (in his view). Birds do fly backwards!.

hahahahahaha ... in your world ? Yes , everything flies backwards including birds , exactly like your yields on TD returns lol....poop miserable poppy !!

Eco Bird, Auckland house $1m -0.7% = $993,000.00 vs term deposit $1m @ 3.6% = $1,036,000.00. That's a before tax $36,000.00 gain, its risk free and it's banked!

Spot the difference? Best leave rent yields out of the equation as they, as you know, after expenses are negative anyway.

That said, sounds like you need a financial health check up with your Bank Manager ooops, "business partner" The palpitations will only grow stronger the longer you remain on the tracks! You will recall an incident when you experienced immense difficulties calculating yield percentages and severely embarrassed yourself during an attempt to compare capital gain % with term deposit %pa. This explains your ignorance of term deposit returns. Its sad your missing out on risk free at a time of rising risk ;-(

lol, got your wires crossed again pooppy ?
I never compared CG with TD % returns, ... but hey anything goes for you ... hahahahah

but will do that now , just for you mate:

lol, $1M invested in property in Auckland since 2014 is now $1,7M Plus the rent yield to pay for the expenses adjusted for inflation Plus tax credits Plus depreciation loses claimed + + .... so actual overall gain was at least $700,000 in 4 years and that can be banked anytime. Did your TD do 1/2 of that in real value ?

Not sure where did you get the -0.7% ? did you select a vintage year or .. , lol ?

Funny you mentioned my business partner, she called few days ago to explore more business opportunities and if I had plans to expand ... translation: Ready to lend me more money for a new investment .... so not sure which planet are you living On poops....surely not mine!

Call a Sparky to correct your crossed wires mate ... or maybe a Plumber could do a better job !! lol

And within the text of that almost decipherable prose from the 'Oozlum Bird' is in a nutshell, the massive issue that NZ faces!

Confidentiality agreements in place or otherwise, between the Reserve Bank and the Aussie 4 (sounds like a cartel/ or something from the wild west that description of NZ's banks), I will wager that the regulators have not been keeping an eye on the either, the idiocy of bank lending multiples or the regulation of the idiots that have been able to acquire the credit.

What a bloody mess when the market for credit dries up.....


Below is a lesson from the property world about leverage and making acquisitions with debt when the market was already too high. This is the largest estate agency in the UK who were previously successful and out buying other companies in 2014 - 2016 (with a bit of debt) - Share price has been hammered - it's worth a read.

UK average property price £227,000 in May 2018.. or around $450,000 NZ dollars.... that's including several million London homes. Enjoy the read

you seem to be a very bleak person who likes to live on disasters and drama selecting what suits you to feed that dark pessimism inside yourself. there are millions of similar stories, just like there are other millions of success stories ....

Not sure why you want everyone to follow you into that darkness - I guess you think that you are providing genuine advice and opening the eyes to the coming acolopolips ....

Well, good for you ... do that while you respect yourself and others who beg to differ ... if you don't want to learn from others or their success and that bothers you too much , then stop calling them names or mock them around ... That kills any credibility you may hold ...unless you are young and reckless and don't care about that either !


Do you know what, I have absolutely no idea what an 'acolopolips' is but it sounds like something you may need antibiotics to get rid of?

As for being bleak, how could that ever happen as long as I have your writings to laugh about each day. It's too late for you I think but I hope my writings will provide some thought to those that haven't seen a housing crash before and believe me there is a big one coming to NZ.

Toodle pip


Ha-ha-ha :) Eco Bird, funny you think I need a plumber when your "alleged" UNBANKED gains have sprung a leak - and you know it! What happens to those small leaks if left unattended? As a, ah-hmmm, "professional" Landlord, you would not need metaphors to explain the fallout!

A question for you. How can you bank these gains without the IRD claiming CGT? Then there's agents fees and legal costs. Interest, insurance and rates have had a good go over the years too. Going long on an asset you know has become value pumped with leverage is a gambling man's game. Profile seems to fit.

Term Deposit are not risk free despite popular belief to the contrary. Lower risk yes, risk free absolutely not, and first in line for a haircut under OBR, especially if you're into the $millions level.

RMNZ, spreading deposits among all the major trading banks will go some way in mitigating this risk.

Some way yes, along with a structured laddering approach but its a poor form of diversity, and in a OBR event the government sets all the rules so even TD's below $100k are not "safe".

As they say "patience is a virtue".

Here is a stat for you 85% of real estate sales people fail in there first 12 months and leave the industry. So if you think it is so easy have a go and see how good you are. If you don't wish to have a go button up. I had a go and I tell you its not easy. The top agents earn very good money and they deserve it.

Works out on par with Sturgeon's law and start up fail rates. Where close to 90% fail to hit the mark/market.

We are going up boys, fasten your seat belts, prepare for take off and fly until November 2018 for the next breather. Volumes are just one of the indicators for increased appetite - There is good demand out there. Prices will start a moderate rise from here, nothing like we saw before but, rise it will.

Anyone who has a deposit and can service a loan should explore and buy in the next 30 days, fix his loan for 2 years ... and relax.

Those who choose to wait hoping for a disaster and sitting the market out for the last 12 months still have a chance to get in now.

Why? ... in view of fundamentals , nothing has changed and the Supply side is worse than last year. Demand is on the rise, be it net migration, better wages, and record employment numbers and opportunities. ... Rents are on the rise and yields are improving, people with spare cash will look at properties again. ... The housing market proved its resilience since its bottom in July 2017 and there are no signs of Supply or Policy improvements.

In view of macro economics, the world is heading to a turmoil again, the share markets ( including ours) might take a hit after a good run for few years now, money could easily find its way back into the safe haven of property market after holding Gold and Cash proved to be a joke ... Also, should our economy head south again, thanks to the CoLs, then there is nothing safer than the good old B&M.

Below is a lesson from the property world about leverage and making acquistions with debt when the market was already too high. This is the largest estate agency in the UK who were successful and out buying other companies in 2014 - 2016 (with a bit of debt) - Share price has been hammered - it's worth a read.

UK average property price £227,000 in May 2018.. or around $450,000 NZ dollars.... that's including several million London homes. Enjoy the read

Business has taken on too much debt to pay for acquisitions ... Could be near breaching limits debt covenants. They could have financed their acquisitions with their shares to have maintained leverage at levels to withstand a downturn.

I think there is going to be an earthquake, the bird senses the housing market is about to crack, just like an

Sounding desperate Ecobird

There is plenty of supply and still super low sales volumes. Trade me still has 11000 listings and in the spring there will be a glut.

The market is heading for a crash, buyers should hold on to their cash and buy when the market has corrected.

if you think world wide turmoil is going to strengthen our property market you are sadly mistaken, it will do quite the opposite as liquidity drys up.

Couldn't be a worse time to buy than now!

I would only buy property now if I had 100% cash and needed a house to live in.

Leveraging to buy when commentary from NZ to Aus to the USA are talking asset babbles bursting, not if but when, seems a very reckless gamble to me.

Imho sell up and clear any debts is the best investment to be made at present.

With knowledge like this you should apply for a job at BNZ. Tony Alexander watch out!

Came across this and was astounded. 1 agent - 93 sales ($115m) confirmed over 24 months; 21 sales $ TBC.
Not too shabby.

Property is on the up until the next global event. At present its still business as usual and everything that's reasonable still has SOLD signs on the boards after 6 to 8 weeks tops. Sorry but waiting for a CRASH is an act of desperation, good luck with that attitude to life. Yes it could happen next week, or in October 2018 as some predict but it also may not happen for another 10 years and by then a CRASH would see prices back to where they are right now.

Waiting for a crash is not an act of desperation. It is an inevitable outcome following money printing and ultra low interest rates.

The desperation is believing these artificially inflated asset prices will hold (in fact they aint).

The presence of sold signs indicates the wise one is bailing...and a sucker has arrived.

Feel free to base your world view on real estate signs in NZ.

Its not hard to be a real estate agent at all. All you need is a good network, some basic people skills and a market that is ticking along ok. Anyone with the Grammar network kills it. I'd kill it, but I would much rather fly a Jet. Being an RE Agent might earn you a bit of cash but will never earn you much respect.

And flying a jet engenders respect? "I'm a glorified bus driver" and that's directly out of the mouth of an Emirates Captain with 17 years of big jet experience.

Sure they are a glorified bus driver....but only right up until the second shit happens and they have to make life or death decisions. Sorry but you don't just get to pull over to the side of the road when the engine stops.Perhaps he was a lousy pilot, some of them made terrible decisions if you ever watched air crash investigation. A decent pilot would recognize the skills required and so would members of the public that had a brain.

Hahaha you get more and more infantile by the day, how old are you again?
I would take my job over yours anyday! I've been an Accountant easily one of the most boring jobs on the planet.