KEY POINTS:
The dire state of the country's house sales sector is being blamed as one of the reasons for the failure of rebel real estate agency The Joneses.
One industry chief says people still desperately want an alternative to mainstream agencies but the timing was all wrong.
Alistair Helm,
chief executive of realestate.co.nz, which is partly owned by the Real Estate Institute, said The Joneses' model was not flawed but market conditions had worsened since they started in 2006 and they had suffered the effects.
Institute figures show houses are taking much longer to sell and average prices are falling, from $345,000 in December to $340,000 last month, well off the peak of $352,000 in November. Instead of selling 10,000 houses a month, agents sold just 5186 nationally last month. And instead of taking a little over 20 days to sell, places now take an average of 38 days.
"Time was not on their side," Mr Helm said of The Joneses, adding that if they had another year they might have survived.
The Joneses had about 300 houses listed for sale this week when its director, Chris Taylor, announced voluntary liquidation. He cited the state of the sharemarket and inability to raise capital as reasons behind the move.
But Mr Taylor said money paid in advance by vendors was safe because it had been put in a trust account.
Mr Helm cited Nielsen research commissioned by his business which showed half the people trying to sell their homes planned to go private and bypass agents.
Sellers blamed high commissions and undue pressure from agents for their decision, Nielsen found, a move Mr Helm said was a wake-up call for his sector.
Peter Hammond of commission-free private property sales specialist Green Door said his business was flourishing, despite the downturn. People still wanted an alternative to big agencies and Green Door had 19 franchisees which sold about 80 houses a month, he said.
"Our business is growing - we're up 30 per cent on this time last year," Mr Hammond said.
Sue Blair, licensee of tiered commission agency Go Gecko in Tauranga, said she had been operating for more than two years and sales were still strong.
Brian Gaynor of Milford Asset Management blamed The Joneses' failure partly on the sharemarket downturn - one of the worst in recent times - but he also questioned the financial strength of the business, which had more liabilities than assets.
WHAT WENT WRONG
* The Joneses predicted last month there would be 100,000 national house sales this year "even in a downturn".
* The business had sold just 433 houses in its first 14 months to November last year, in a runaway market.
* Since then, house sales have almost halved, from 10,000 a month to 5186 last month.
