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Housing slump drives agents out
5:00AM Tuesday July 01, 2008
By Eloise Gibson
The property slump has driven about 10 per cent of Auckland's real estate agents out of the business.
Some had gone months without income.
Nearly 700 agents, many of whom work solely on commission, have left the real estate industry since December and agencies predict they will lose more before the housing market picks up.
Real Estate Institute of New Zealand figures show the number of sales staff employed in Auckland fell from 7824 in December last year to 7150 at the beginning of June.
Barfoot and Thompson director Peter Thompson said some agents had left after going two or three months without a paycheque.
"With a family and a mortgage to pay, that's pretty tough," he said.
Auckland has been hit harder than the national average by falling property sales.
Residential sales for March, April and May were less than half the number for the same time last year.
This leaves agents competing for a much smaller pool of sales.
Ray White New Zealand's chief executive, Carey Smith, said that a year ago, each agent had about 1.5 sales a month available to him or her.
Now there was only 0.6 of a sale an agent a month to go around.
Mr Smith said the industry had lost 22 per cent of its staff in the past year, and with agents having to pay fixed business costs from fewer sales, that could rise to more than 30 per cent.
The downturn may also spur those thinking of leaving the industry for other reasons.
Les Smith, of Smith Realty in Belmont, closed his agency last month after more than 20 years in the business to devote more time to his role as a justice of the peace.
"I've been thinking of getting out for some time," he said. "It's a good time to leave because the industry is slowing down."
Agency heads said the fall in staff numbers was not all bad news. Agencies said they were losing part-time and less-experienced sellers, but keeping the top sellers.
Real Estate Institute president Murray Cleland said people who went into real estate during the property boom were now realising it was not easy money.
"I don't think it's a bad thing to lose a few people," he said. "The people who were just hanging on will disappear and leave it to the people who have the skills to negotiate."
Mr Smith said part-time sellers had all but disappeared.
"It's a high-risk business at the best of times. The majority of the industry works on commission."
But his top agents were making more sales than ever, which he attributed to vendors seeking better agents to sell their properties in tough times.
Harcourts New Zealand CEO Bryan Thomson said career real estate agents were still doing well.
* The figures
Real estate agents employed in Auckland:
December 2006 7434
June 2007 7577
December 2007 7824
May 31, 2008 7150
5:00AM Tuesday July 01, 2008
By Eloise Gibson
The property slump has driven about 10 per cent of Auckland's real estate agents out of the business.
Some had gone months without income.
Nearly 700 agents, many of whom work solely on commission, have left the real estate industry since December and agencies predict they will lose more before the housing market picks up.
Real Estate Institute of New Zealand figures show the number of sales staff employed in Auckland fell from 7824 in December last year to 7150 at the beginning of June.
Barfoot and Thompson director Peter Thompson said some agents had left after going two or three months without a paycheque.
"With a family and a mortgage to pay, that's pretty tough," he said.
Auckland has been hit harder than the national average by falling property sales.
Residential sales for March, April and May were less than half the number for the same time last year.
This leaves agents competing for a much smaller pool of sales.
Ray White New Zealand's chief executive, Carey Smith, said that a year ago, each agent had about 1.5 sales a month available to him or her.
Now there was only 0.6 of a sale an agent a month to go around.
Mr Smith said the industry had lost 22 per cent of its staff in the past year, and with agents having to pay fixed business costs from fewer sales, that could rise to more than 30 per cent.
The downturn may also spur those thinking of leaving the industry for other reasons.
Les Smith, of Smith Realty in Belmont, closed his agency last month after more than 20 years in the business to devote more time to his role as a justice of the peace.
"I've been thinking of getting out for some time," he said. "It's a good time to leave because the industry is slowing down."
Agency heads said the fall in staff numbers was not all bad news. Agencies said they were losing part-time and less-experienced sellers, but keeping the top sellers.
Real Estate Institute president Murray Cleland said people who went into real estate during the property boom were now realising it was not easy money.
"I don't think it's a bad thing to lose a few people," he said. "The people who were just hanging on will disappear and leave it to the people who have the skills to negotiate."
Mr Smith said part-time sellers had all but disappeared.
"It's a high-risk business at the best of times. The majority of the industry works on commission."
But his top agents were making more sales than ever, which he attributed to vendors seeking better agents to sell their properties in tough times.
Harcourts New Zealand CEO Bryan Thomson said career real estate agents were still doing well.
* The figures
Real estate agents employed in Auckland:
December 2006 7434
June 2007 7577
December 2007 7824
May 31, 2008 7150
mfao!
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