Key Facts
- There has been no significant growth in the real estate industry’s residential commission revenue over the past year.
- Real estate agencies throughout New Zealand are estimated to have earned about $399 million in gross residential sales commissions in Q1 2021. This is a 26% increase compared to Q1 2020, which was significantly weak for sales.
- Total commission levels are still lower than the peak of nearly $700 million in Q4 2020 and remained above $500 million for six consecutive quarters between 2020/21.
- Since Q2 2020, commission estimates have remained relatively flat, which suggests that industry commission revenues have stabilized around the higher end of pre-Covid levels.
- With no revenue growth for the past year and uncertainty in the market outlook for the rest of the year, real estate agencies are likely concentrating on improving their competitive advantage and controlling costs.
Article Summary
Despite economic instability and uncertainties in the housing market, the real estate industry’s residential commission revenue has remained rather steady over the past year. Residential sales commissions for real estate agencies across New Zealand reached an estimated $399 million in Q1 2021, reflecting a 26% increase compared to the same period last year. However, this figure is still considerably lower than the nearly $700 million peak witnessed in Q4 2020.
Furthermore, since the second quarter of 2020, commission estimates have been remarkably steady indicating that industry commission revenues have now normalized around what was the upper end of pre-Covid levels. This flatlining reflects the current economic situation and its effects on the real estate market.
The stagnant revenue growth and uncertainties lying ahead might prompt agencies to focus on enhancing their competitive edge and maintaining a strict control on costs. Overall, despite the lack of significant growth, the industry seems to be faring well given the challenging pandemic-induced circumstances it is confronted with.
