Fierce competition taking toll on estate agents

By Carly Udy
More real estate agents are expected to quit the industry as competition in the Western Bay residential property market hits fever pitch.
John O'Donnell, principal at L J Hooker in Mount Maunganui, said while the industry overall was looking "pretty good" there were more agents than there were houses to sell.
"Properties are still selling. We don't have any staff turnover at the moment but having said that we're lucky in this office. People have been here for a while, they're very solid in real estate. "There are people still leaving the industry, quite a few left a few months ago."
Mr O'Donnell said he had worked out there were about 49 or 50 sales at the Mount in May. "That tells you 62 people didn't do anything," he said.
"And it's actually worse than that, because I know in my office about two guys made more than three sales each, so there's about four or five sales. The top 10 agents will probably sell two a month, a lot probably won't sell anything for a while. I mean 49 sales and 112 agents? Somebody's got to miss out, don't they?"
Last July, the Bay of Plenty Times reported agents were quitting the industry amid a slump in sales activity.
Mr O'Donnell said there were some real estate agents for whom the industry was a lifestyle - "they don't treat it like a career".
Other agents spoken to by the Bay of Plenty Times echoed those sentiments, saying the volume of the market had dropped.
But times weren't always bad, as agents who should "never have come into the industry in the first place" often dropped out after "freeloading on the good times".
"We're certainly interested in people who are career-minded and wanting to contribute to the industry and not take from it," one said.
Institute president Howard Morley backed their comments, saying activity showed the property market was resilient, though in most regions it was taking longer to sell houses. He said listings were down overall last month and competition was stiff.
"However, the good [agents] are going to shine through," he said.
Ross Steele, principal for Westbay Real Estate in Tauranga said, "These things are always cyclical," adding that it could appear more agents were leaving the Bay when they were actually just moving outside of Tauranga, not out of the industry.
Neil Hamilton, principal at First National in Tauranga, said the most noticeable change he'd seen in recent times was that vendors were now having to be more flexible in their asking price, where previously they had been the ones who dictated prices.
Meanwhile, Mr Morley said that on a national level the median house price rose slightly, from $305,000 to $305,500.
Latest figures from the Real Estate Institute show 188 residential houses were sold in Tauranga in May, compared with 141 the previous month. But the city's median house price dipped $2000.
In the Mount Maunganui/Papamoa area, 114 houses were sold in May, up from 68 in April but again the median house price plunged, by $7000.
Mr O'Donnell said because results for the Mount and Papamoa were combined he felt it didn't show the true picture at the Mount.
"At Papamoa there'll be a a lot of houses selling in the $200,000 mark. Our average sale through this office [for May] is $452,000. The Mount is probably an average $100,000 ahead of Papamoa on price." Rurally, the median price for farms in the Bay of Plenty rose substantially to $1,355,000 in May, up from $1,050,000 in April. In total, 22 farms sold during the month, nine more than the 13 sold in April.
The 22 farms sold consisted of 13 horticultural, five grazing, two dairy and two forestry properties.Westpac economist Nick Tuffley said large numbers of properties were selling - a sign of strength - but it was taking longer to sell them, a sign of weakness.