Estimated commissions from real estate agencies down by more than a third over one year
Estate agents’ estimated commissions are at their lowest level since New Zealand entered its first Covid lockdown in March 2020
The latest real estate commission estimates won’t do much for agencies, with commission levels well below last year for the second quarter in a row.
Interest.co.nz estimates that estate agents across New Zealand earned around $378 million in gross residential sales commissions in the second quarter of this year, down 36% from the second quarter of 2021.
It was the lowest since the second quarter of 2020, when transaction activity largely came to a halt during the first round of lockdowns from the Covid-19 pandemic.
Other than that, this is the worst second quarter the industry has seen since 2017, and follows a weak first quarter of 2022 when the estimated commission level was down 23% from the first quarter of the year. ‘last year.
However, the latest drop in commissions comes after a period of exceptionally high commission levels.
Interest.co.nz estimates that between the third quarter of 2020 and the fourth quarter of 2021, total gross residential commissions were well over $500 million per quarter and in a few quarters were well above at $600 million, which was the first time. this kind of figures had never been reached.
So, the latest commission levels are dropping from an unusually high level, but they are doing so at a significant rate, and there could be worse to come.
Commission levels typically decline between the second and third quarters of the year, and the monthly trend so far this year suggests that may well be the case again.
However, even if the market recovers slightly in the second half of this year, it is very unlikely to return to the levels seen since the second half of 2020.
For now at least, the cream has come out of the top.
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