Real estate agents starve amid property boom

An interesting development is happening across Australia’s real estate agencies.

Despite Australia experiencing its strongest synchronised property boom in decades, real estate agencies are duking it out to secure the limited number of listings on offer.

The situation has become so extreme in Tasmania that the Real Estate Institute of Tasmania is literally “begging” agents not to discount their commission as they compete for scarce listings so as to avert a possible “race to the bottom” for the industry:

“It’s brutal. It’s a matter of survival, there’s no doubt about it,” Harcourts Signature director Gary Quan said…

He said some agents had not had a listing for three to four months.

“They prospect all day, make calls, it’s quite demoralising,” he said.

“Everyone’s prospecting madly trying to drum up business, talking to people, talking them into putting their property on the market, offering longer settlements.

“It’s almost a race to the bottom particularly with commissions and agents out there offering very good deals in terms of free advertising, low commissions.”

My anecdotal experience is that listings have dried up immensely in my area (around Ashburton, Malvern East and Glen Iris in Melbourne). I have never seen so few for sale boards as the past six months. We are also regularly bombarded with calls and mail seeking out whether we are interested in selling.

CoreLogic’s listings data shows that while new listings have finally recovered (after falling badly behind average earlier this year), total listings remain around 30% below the five year average:

Property listings

Total listings remain around 30% below average.

For an industry that makes ends meet via turnover, this is bad news – even when prices are growing strongly.

You know it is a strange market when a once-in-a-generation property price boom is met with starvation from real estate agents. I doubt few people are feeling any sympathy.

Unconventional Economist
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Comments

  1. The situation has become so extreme in Tasmania that the Real Estate Institute of Tasmania is literally “begging” agents not to discount their commission as they compete for scarce listings so as to avert a possible “race to the bottom” for the industry:

    I wonder what the ACCC think of all this?

    Anecdotally, one of the agents near us (prominent office near a high pedestrian intersection) is closing. Might be a racial element that one on though.

  2. The charts actually contradict the headline. If we have similar number of new listings as previous years and a lower number of total listings, then more properties are selling faster. Isn’t that better for agents? They are basically talking their own book for more listings.

    Listings might be low where you are Leith, but within your five kilometre radius you will find plenty of For Sale signs in Carnegie, Caulfield East, Oakleigh East, Clayton.

  3. Should be able to buy sell property without an agent. An App could do it all. Heck, buying an apartment has bugger all warrsnty, you dont need an agent to buy a toaster which has more warranty.

    • You can buy/sell without an agent. We letterbox dropped and bought our last house this way. Agents have done a great job of conditioning people agents are a dependency for a sale.

  4. Sorry, I just had to pick myself up from a puddle on the floor. I nearly drowned myself in crocodile tears.

    • I hope they don’t start eating each other like the mouse plague BWAHAHAHAHAHAH

  5. MichaelMEMBER

    “so as to avert a possible “race to the bottom” for the industry”

    They are the bottom.

  6. It is their own fault for talking the market up so much. Why would you want to sell when every man and their dog is saying if you hold off till later you can sell for more. Only people who have to sell are selling.

  7. As the listed to sold percentage improves (from 65% to 100%) and yer days on market until sold reduces immensely (from 80 days to 20 days . Damn right you drop your fees. Thats a whole lot less work.

  8. “I doubt few people are feeling any sympathy.” Sorry don’t you mean “any”

  9. What’s the lowest commission folk have been able to negotiate to sell a house or apt during 2021 ?? I’m looking at selling my first home soon…. hoping for 1.5%, else I’ll just DIY the listing

    • TailorTrashMEMBER

      6 Years ago
      1.4 % …..and more for anything over the agreed
      Target price ……

  10. TailorTrashMEMBER

    Why would anyone want to sell a house that assures them a cool $100 K a year ……just sit tight and get rich
    …..the less houses for sale the bigger the price
    …how many real estate agents have sprung up in straya in the last 10 years ?…..a sh1t load ……time for them to feel pain ……good good

  11. Lord DudleyMEMBER

    They’d better be sending some donations to the Scotty government with a request for 500,000 new immigrants per annum. That’s the only way Australia will get the vibrant and prosperous economy it needs, one where those that have a go get a go.

    If one of the most important careers in Australia… Real Estate Agent… becomes unattractive, what will there be for young, ambitious lifters to do? Coffee franchises? Debt collection? Selling timeshares? If the government won’t support Australia’s shining star economic sector, then Australian productivity will collapse!