Salary for real estate agents will drop 20% as market downturn continues
According to Infometrics forecasts, real estate agents will likely see their take-home pay drop by one-fifth due to falling house prices and sales volumes.
Infometrics chief forecaster Gareth Kiernan said that with inflation around 7%, the fall would look more like a 30% drop.
The drop in commissions is explained by the decrease in sales on the market and the drop in house prices.
“There’s a significant downturn and downturn there that will likely extend into 2024 as well,” Kiernan said.
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Sales volumes stood at over 100,000 a year in the middle of last year, and that had fallen by about a quarter to around 75,000, and is expected to fall further.
“We expect that as we move into 2023, those sales volumes will drop further below 70,000 per year,” Kiernan said.
At the same time, house prices had fallen about 10% since the peak at the end of last year, so for every sale made there was less commission for the real estate agent, did he declare.
The number of real estate agents had skyrocketed in 2020 and 2021 as others were lured into the industry by the high incomes that could be had.
“The increase was about 12% or 13% in terms of the number of officers during that time,” he said.
In June, there were 16,866 estate agents active in the market, according to the Real Estate Authority, compared to 15,520 in the same month two years earlier.
“We expect the number of agents to decline over the next two years,” Kiernan said.
In 2017 and 2018, when the market last slowed, the number of agents fell by about a fifth, but Kiernan said the current downturn was much larger.
Reinz data used by Infometrics showed the number of home sales in the quarter ending June 30 was down 32% from the same period last year, from 22,973 to 15,689.
The average sale value had fallen just over $90,000 between the quarters ending Dec. 31 and June 30, to just over $1 million.
Lower sales numbers and home prices caused total sales value to drop by more than $22.5 billion to $15.7 billion between the quarter ending June 30 last year and this year.
The Real Estate Institute‘s active chief executive, Rowan Dixon, said as with any profession, workloads go up and down.
“With the current shift in market sentiment and in conjunction with the calmer winter months, the pace of sales has slowed, seeing sales volumes and median prices decline across the country,” he said. declared.
Two real estate agents give their perspective on the market as the downturn continues and headcount dwindles.
“That being said, people are still buying and selling homes, and making life-changing decisions, that’s a constant.”
He said that in the current market cycle, estate agents needed to adapt their approach, and it was “not for the faint-hearted”.
“Those who are willing to work hard will still see results,” he said.