Real estate agency commissions picked up in the second quarter but remain soft in Auckland

By Greg Ninness

The real estate industry's fortunes improved in the second quarter of this year, with estimated industry revenue from residential commissions up 5.4% compared to the same quarter of last year.

Interest.co.nz estimates real estate agencies nationally earned around $398 million in gross residential sales commission in the second quarter of 2023.

That was up by $20m (+5.4%) compared to the second quarter of 2022.

That is still well down on the estimated $592m the industry earned in the second quarter (Q2) 2021 during the last housing boom. But it's slightly ahead of the estimated $391m earned in Q2 2019 prior to the outbreak of the Covid-19 pandemic.

Essentially this means industry sales revenue has now returned to pre-pandemic levels. (See the graph below for the quarterly trend).

However, there were significant regional differences with the Auckland market in particular remaining soft.

Estimated gross commission revenue in the Auckland region was down 10.6% in Q2 this year compared to Q2 last year, even though the number of properties sold was almost unchanged. That suggests weaker selling prices in Auckland pushed down average commission levels.

In other main centres the estimated commission revenue in the Wellington Region in Q2 2023 was up 6.7% compared to a year ago, while Canterbury was almost unchanged.

Overall, most agencies are probably relieved the slide in revenues occurring after the market came down from the 2021 boom appears to have been arrested. But at this stage they probably aren't seeing much change in their commission revenue streams compared to pre-pandemic levels, unless they are gaining or losing market share to or from other players.

This story was originally published on Interest.co.nz and has been republished here with permission.