Photo: 123RF
New Zealand's real estate agents only make roughly four sales per year each, on average, new data shows - but the amount they are making has increased year-on-year.
Real Estate Authority data shows the number of licensed real estate salespeople dropped 2.5 percent in September, compared to a year earlier.
There were 15,497 active licences at September 30, down from 15,893 a year earlier.
Sales volumes were up 12.2 percent over that same period, Infometrics chief forecaster Gareth Kiernan said, but average sales values were down 0.4 percent.
He said the fact there were fewer agents and more sales meant that the average number of sales per agent rose from 3.86 in the year to September last year to 4.44 this year.
"Commission per agent rose by 14.6 percent, from $107,800 to $120,300."
That is an average and some salespeople will have made significantly more and many significantly less.
He said commission per agent was about 7 percent below the average since 2013 and 39 percent below the peak of 202 and 2021.
There was a spike in real estate salesperson numbers in the middle of 2021, when more than 1000 joined the industry in a year. But numbers dropped as commission started to fall from October that year and more people have been leaving than entering the industry since the start of 2023.
Kiernan said, based on his current forecasts for limited house price growth, there was unlikely to be a big pick-up in agent numbers.
Economist Ed McKnight, from Opes Partners, said it was a reflection of the wider market.
The number of property sales fell from a peak of more than 100,000 in a year to just under 60,000, or a 42 percent decline.
"On top of that, property prices fell 18 percent. If fewer houses are selling at lower prices, then that is a lot less commission for real estate agents overall.
"At the peak agents were selling almost $100 billion of real estate per year. That fell to $54b per year at the bottom of the market.
"So at the highest end, real estate agents could have taken a 46 percent hit in revenue. Though that's likely over stated because real estate agents have a tiered commission structure."
Salespeople usually split the commission with the firm they contract to. A split could be 50/50 for a newer agent but their share would increase as they became more successful.
Jen Baird, chief executive of the Real Estate Institute said it was harder for salespeople when the market was soft because they were usually paid only when they made a sale.
"In these markets really established real estate professionals continue to do really well but it can be challenging for other people."
She said there had not been huge numbers of people leaving the industry.
"It's much more a longer-term career choice than it used to be."
But she said the institute's chair of its rural sector group, Conrad Wikshire, had commented to her that it was the perfect time to get into real estate because salespeople would learn good habits when things were difficult.
"If you learn your craft when things are tough, when things are good you're still a really great real estate agent but you can handle the other side of the cycle."
Shamubeel Eaqub, an independent economist, said real estate was a profession that people could change in and out of relatively quickly.
"The barriers to entry are quite low… the market moves quite flexibly."
He said, because salespeople were often self-employed, the work could be precarious, but also could be lucrative when the market was busy.
The big swings in activity seen turnover would make it harder for different models to work, he said.
"You don't get many markets where the change [in activity] is that big. How do you have a workforce that's stable in an industry like that?"
As house prices have increased, so too have commissions, in general.
But Eaqub said because selling a house was an infrequent activity for most people, they were happy to rely on the expertise and trusted brands of well-known salespeople to make it happen.
"They're willing to pay quite a lot for it. Fixed price and low-price models haven't really caught on."
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