Many agents not earning 'living wage'

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Wellington real estate agents were the best paid in the country last year, according to Properazzi’s Alistair Helm.

Wednesday, June 26th 2013, 12:00AM 1 Comment

by The Landlord

He has done an analysis of the value of sales, the amount of commission and the number of agents operating in regions around the country and found the average income for a New Zealand real estate agent was $43,372 last year.

But there was a lot of variation between the regions.

Wellington’s agents pulled in an average $93,952 each in 2012. Auckland’s were the next highest-earning, with $76,147.

The lower figure in Auckland may be because there are more real estate agents – the most successful agents were earning more than $1 million a year each in the country’s biggest city.

But in four regions, the average was below $25,000 last year.

Northland agents earned an average $24,851, followed by Coromandel with $22,875, Wairarapa $21,666 and West Coast $19,173.

Out of that income, agents would also have other costs associated with running their business.

After an adjustment for tax, the average is reduced to $35,000, below the “living wage” of $38,000, Helm says.

Helm said commission was a very inefficient way of remunerating real estate agents. “I think the system has to change. The industry needs a degree of reinvention.”

Agents added the most value, he said, during the negotiation stage of a sale. And negotiating with six buyers on a $600,000 home would be harder work than negotiating with two on a $2 million sale – but the more expensive sale would be much more lucrative.

Helm said agents should be able to charge a good hourly rate for their negotiation and facilitation of a sale but they couldn’t because they weren’t able to unbundle the process of negotiating a deal from the very inefficient methods of canvassing for new listings.

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