Government authority spells out trends affecting real estate agent numbers. Photo Getty / Images
Fewer people became licensed real estate agents in the last six months but numbers are still high, according to the Government agency which regulates the sector.
The Wellington-headquartered Real Estate Authority said in the year to June 30, 2022, New Zealand had 16,866 people and entities licenced to sell real estate which was historically high.
But numbers fell lately by 198 licences to 16,668 licences.
“The growth has also slowed over the last six months, but remains high,” the authority said today.
A key indicator of employment in the sector is the number of new licence applications. The authority said that can be a bellwether, showing the level of interest in selling properties for a living.
The data indicates the number of active licences is softening from the high numbers between July 2020 to May last year.
“On a month-by-month basis, approved applications reached historically high numbers through much of 2021 and while they remained relatively high in the first half of 2022, in the second half of last year we began to see the number of new licence applications soften to levels more in line with longer-term trends,” the authority said.
A rise in the number of people temporarily shelving their certificates and fewer entering the sector was an indicator of change.
“More people are voluntarily suspending their licences and fewer people are applying to become a real estate licensee. Some are choosing to leave the industry. A large number of licences are due for renewal in March. We will have a clearer view on the overall numbers at that time,” the authority said.
Agents, branch managers and salespeople must renew licences annually to practice. They pay an operational levy of $597, a disciplinary levy of $33 and $94 GST.
To get licenced to begin with, they must pay the authority $939.55.
The market downturn might be responsible for some leaving the market but the authority said several factors influenced licence numbers including market conditions, retirement, and employment opportunities in other sectors.
The conduct regulator said it recognises market conditions are challenging but its focus was on supporting real estate licensees to maintain high standards of conduct, irrespective of pressures the market may bring.
Licensees finding the market difficult can suspend their licence, rather than letting it expire.
It’s also hard to take any point in time to work out numbers.
“Renewals for licences occur throughout the year, in alignment to the date that people were licenced,” the authority said.
“Licensed real estate professionals or licensees that were already licensed when authority was formed in 2009 were issued with a renewal date of March 31, which is why there is often a large number of licences getting renewed at that time.”
Not everyone holding a licence will be actively working in the sector. Some people might still hold their licence but retire, go overseas or shift to work in a different sector.
They might let the licence lapse on their anniversary, not proactively surrender it.
That blurs the data.
“They therefore may still appear as active in our license data until they choose not to renew their real estate licence on its annual renewal date,” the authority pointed out.
Of16,668 licenses issued, 13,298 were to salespeople, 2053 were to agents, 914 were to companies and 403 were to branch managers.
An agent is a licensee who owns and/or operates the business but a salesperson is the person engaged by or works for the agent.
By December, there were 7728 individual active licences issued in Auckland.
Canterbury/West Coast had 1860, Waikato 1312, Wellington/Wairarapa 1188, the Bay of Plenty 1004, Otago/Southland 937, Taranaki/Whanganui/Manawatu 729, Gisborne/Hawkes Bay 500, Nelson/Marlborough 417 and Northland 528.
Jen Baird, Real Estate Institute chief executive, said it was hard to forecast changes in agent numbers.
“But we would expect as market conditions slow that agents are thinking about their futures and what makes sense for them and their families. As the cycle slows, a number of agents will choose to do something different, whether permanently or for a short period of time. It’s interesting we haven’t seen that yet,” Baird said.
Renewal dates tend to be when many agents decide whether to stay or not. Many licence renewal dates occur in March, she said.
REINZ has 17,500 members. Some are property managers but 96 per cent of all licenced agents are members, Baird said.
John Waymouth, a real estate barrister, expects numbers to fall this year as people don’t renew certificates.
“The key question is how many are going to renew? This year, they’ll make that decision. It’s interesting that the authority sees a softening of applications. That could mean fewer people renew but it won’t show till some time throughout this year,” he said.
“When people get back to work, the renewal comes up and they have to pay that money - all of a sudden, they might change their minds about working in the sector. The statistics won’t show anything dramatic until the year progresses,” he said.
Sales had slowed but the number of agents hadn’t really dropped yet.
“There will be a growing number of people who have not earned a realistic income and those people will have to decide whether they get a more regular income. The average sales per salesperson and commission have dropped,” Waymouth said.
“There’s a double whammy there.”
He doesn’t see many agencies closing. Many people could be earning around $50,000 while others could earn $400,000 or more annually.
“It varies depending on what sort of market the agents are working in and the average prices which determine their commission.”
Mortgage brokers, conveyancing solicitors, valuers and others could have less work as the market slows.
The election could add more uncertainty. Winter’s arrival could make it especially tough on many working in the sector.
The Herald reported in December that national residential sales volumes fell 12.4 per cent to the end of November.
Then, 28,449 properties were for sale, up 47.7 per cent, the Real Estate Institute said on December 12.
Listings were down 26 per cent annually to 10,185. All regions saw listings decrease compared to November last year, although Marlborough’s remained static.
The median number of days to sell a property in November was 41, up 12 days annually.
Auckland house prices, up 24 per cent last year, fell annually by just over 18 per cent or $235,000. The city’s house prices fell 18.1 per cent from the end of November 2021 to the end of last month.
That compares to a national annual house price drop of 12.4 per cent from $925,999 to $810,000 in the same period.
'Apartments on the site and more than likely offices' – Andrew Moore, CMP Construction.