Word on the Street

Real Estate agents are finding things tough. Many are leaving the industry.

Data from the Real estate Authority show a year-on-year decline of active salespeople. Currently there are 15,480 active licences – down from 16,053 in April 23 and 16,780 in April 22.

In late 2020 the number of houses sold a month was over 10,000. In April 24 that number was 5,559.

Looked at another way that’s one sale for every 3 licenced sales people.

Add to that the fact that the average sales price has fallen from $925,000 in November 2021 to $790,000 in April 24 you can see that the income potential for sales people has also fallen dramatically – down 15%.

This is unsustainable – perhaps it is past time that the industry reviews its employment model.

Economist and commentator Shamubeel Eaqub believes “the reality of renting has become a lot harder over the past decade but that the regulatory settings are improving.

“We need to ensure that there are sufficient renters’ rights …. Because in New Zealand renting is so insecure”.

He says “I have been a long-time fan of institutional landlords rather than accidental landlords. When you are in the business of ‘landlording’ you want as little turnover as possible whereas accidental landlords are return focussed”. (We couldn’t disagree more. NO landlord seeks constant turnover – this is a myth. Stability is in the best interest of both landlord and tenant. What has been misdirected over recent years were the numerous tenant-focussed directives which made being a landlord very unattractive).

“I am encouraged to see new supply coming into the market”. (Note ED – Over the past 60 months the number of new properties entering the market (up 6.3%) has been greater than the increase in population growth (up 9%)).

“The increase in build to rent is encouraging. Build to rent offers two types of security – tenure security and financial security”.

ASB Housing Confidence Survey:

  • A slight upturning of sentiment although considerable uncertainty continues.
  • More NZ’ers expecting interest rates to fall over the next 12 months.
  • Belieif that OCR has reached its’s peak.
  • Cloudy economic outlook created uncertainty over timing to buy or not.
  • Purchasing confidence remains low.
  • Pricing forecasts being revised as the market has been slow to lift
  • Number of properties listed for sale at a 10 year high.

Comments from Tony Alexander:

  • Little positive news in the sector for some time
  • Recent review of monetary policy by the RBNZ last month was more bad news.
  • They are more concerned about inflation
  • They have delayed their indicative date of OCR cuts from first half to second half of 2025.
  • House price increases are going to return but will be flat to slightly falling for the next 6 months or so.
  • Sharp increases in council rates and insurance are not helping the market (or rent levels).
  • Deterioration of the outlook for construction continues – with further liquidations forecast.