Predictions real estate agents will drop out as house sales plummet
Almost 16,000 real estate salespeople had just 5428 residential property sales between them in September, data shows.
That means at least two-thirds of agents went through the month without a pay cheque.
Real Estate Institute statistics for September show the number of properties sold dropped 26.2 per cent, year-on-year.
The drop was not just in Auckland, which has led the market slowdown. For the whole of New Zealand, excluding Auckland, volumes dropped 23.7 per cent, compared to 2016.
Economist Shamubeel Eaqub said life would be tough for some real estate agents. He said the market was "very bloated" with a high number of salespeople compared to sales.
A lot of companies would start to shed staff in large numbers if market conditions did not change, he said.
"Real estate agents are the ultimate in the gig economy," he said. "No care and all responsibility for the agent. They take all the responsibility, they take on a lot of risk. The rewards are there but when the market is down the company can walk away from it."
Antonia Baker, who runs Auckland agency The Property Market, said she expected a drop in the number of salespeople in the market, too.
"But in reality we were probably carrying too many in the first place, anyway."
She said the strong run of high house prices in the past couple of years had led people to think they could easily give up thier jobs and go and sell houses instead.
"That's all very well in a hot market but it won't work in a slower market. I don't know if they ever made much of a go of it anyway."
She said, under normal conditions, there were only about four properties sold per agent per year. A small number of agents would sell many more than that, leaving many people barely making an income.
"The vast majority of [salespeople] who get into the industry drop out in the first three months. It's such a waste of time and money for so many people. It's soul-destroying."
All 16 regions had a drop in the number of properties sold in September compared to the same month the year before.
Tasman's turnover dropped 37 per cent, Southland's 34 per cent and Auckland's 31.5 per cent.
Marlborough had the smallest number of sales since January 2012.
The country's median house price lifted 1.2 per cent year-on-year, to $525,000.
Outside Auckland, house prices increased 5.7 per cent while Auckland's were flat.
On a month-on-month basis, Auckland's median price increased by 1.2 per cent or $10,000.
Bindi Norwell, the chief executive of the Real Estate Institute, said: "Prices across the country increased in all but three regions, evidence that the market continues to grow despite some challenging conditions – including the LVR restrictions and banks continuing to tighten lending conditions. Much of the increase has been driven by the buoyancy in the regions."
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