PHOTO: Some Australian salespeople have taken to social media discussing difficult buyers, low offers and changing market conditions.
Australia’s property downturn is producing something New Zealand real estate agents have already experienced: empty open homes, tougher vendors, aggressive buyers and a sudden realisation that houses don’t always sell themselves.
For years, booming property markets made real estate look deceptively easy.
List a house.
Put it online.
Hold an open home.
Collect multiple offers.
Put up the SOLD sticker.
Repeat.
But when buyers disappear and vendors refuse to accept that yesterday’s price is no longer today’s price, the real job of being a real estate agent begins.
And some Australian agents are now discovering exactly what their New Zealand counterparts learned the hard way after the Kiwi property boom ended.
Welcome to the market where agents actually have to sell
Australian property prices reportedly fell 0.7% in July and 1.9% over the quarter, and signs of stress are beginning to emerge among agents.
Some Australian salespeople have taken to social media discussing difficult buyers, low offers and changing market conditions.
One Australian agent, Liam Cromarty, recently warned buyers against aggressively lowballing vendors after a purchaser reportedly offered more than $100,000 below the bottom of a property’s advertised range.
But from this side of the Tasman, none of this sounds particularly revolutionary.
New Zealand agents have been dealing with versions of it for years.
NEW | Access New Zealand’s Ultimate Real Estate Agent Database — 18,000+ Agents & Agencies Included
And there may be a lesson here for Australia:
A booming market can make an average agent look brilliant
That’s the uncomfortable truth.
When property values are climbing rapidly and buyers are terrified of missing out, selling houses isn’t necessarily the ultimate test of an agent’s ability.
The market is doing a lot of the heavy lifting.
During the extraordinary property boom of 2020 and 2021, open homes could attract crowds.
Auctions produced multiple bidders.
Properties sold above expectations.
Vendors were delighted.
Agents accumulated glowing testimonials.
Then the music stopped.
Interest rates climbed, credit tightened, buyer confidence disappeared and New Zealand house prices fell sharply from their peak.
Suddenly agents had to do something many hadn’t needed to do for years:
Actually create a sale.
From 92% auction success to 8%
Auckland salesperson Diego Traglia gave RNZ a remarkable example of just how rapidly conditions changed in New Zealand.
He said his auction success rate went from around 92% in November 2021 to approximately 8% in 2022.
Open homes that previously attracted double-digit attendance could suddenly produce only one or two groups.
That’s not a minor adjustment.
That’s an entirely different business.
Traglia compared the boom market to running downhill without weight and with fresh water.
The downturn was more like running uphill carrying a 20kg backpack while drinking lukewarm salty water.
It’s a colourful analogy, but it captures the reality perfectly.
Australia’s agents may be about to discover who can really sell
This is where a falling property market becomes fascinating.
When everything sells, consumers can struggle to distinguish an exceptional agent from an average one.
A tougher market exposes the difference.
The strongest agents prospect relentlessly.
They maintain buyer databases.
They follow up.
They understand vendor psychology.
They know their local market.
They communicate uncomfortable information rather than telling sellers what they want to hear.
And most importantly, they negotiate.
That’s where the commission argument becomes interesting.
If an agent can genuinely negotiate another $20,000, $30,000 or $50,000 from a buyer in a difficult market, their fee becomes considerably easier to defend.
If they’re simply uploading photographs to a property portal and waiting for someone to make an offer, sellers may increasingly question exactly what they’re paying for.
Lowball offers aren’t the problem — they’re the market talking
There is another lesson Australian agents may need to learn quickly.
An insulting offer and a market offer aren’t necessarily the same thing.
Sellers naturally have emotional attachments to their homes.
Buyers don’t.
A buyer offering $100,000 below expectations may be opportunistic.
They might also simply have a completely different assessment of value.
Agents can complain about lowball offers, but in a falling market their job isn’t to become offended on behalf of the vendor.
Their job is to negotiate.
Find out whether the buyer has more money.
Understand why they’ve arrived at that figure.
Create competition where possible.
Test the offer.
Present evidence.
Move the buyer upwards.
And simultaneously help the vendor understand what the market is actually saying.
That’s considerably harder than putting a deadline sale sign outside.
It’s also where a genuinely skilled agent earns their money.
Vendors are often six months behind the market
New Zealand agents learned another painful downturn lesson.
Sellers don’t immediately accept falling prices.
A homeowner may remember that the neighbour received $1.2 million last year.
They may have already mentally spent $1.2 million.
Their mortgage calculations may depend on $1.2 million.
Their next purchase may depend on $1.2 million.
Unfortunately, none of those things mean their property is still worth $1.2 million.
In a declining market, yesterday’s comparable sale can become increasingly irrelevant.
This creates one of the hardest conversations in real estate.
The agent who won the listing by promising the highest price suddenly has to explain why nobody will pay it.
That’s why downturns punish agents who buy listings with unrealistic appraisals.
Eventually, reality arrives.
The listing presentation matters less than the database
Another lesson from New Zealand’s downturn is that agents can’t rely entirely on property portals to produce buyers.
In a hot market, buyers find you.
In a cold market, you find buyers.
That means databases matter again.
Prospecting matters.
Calling people matters.
Following up old enquiries matters.
Knowing who attended an open home three months ago matters.
Knowing who owns property nearby matters.
Knowing which investors are active matters.
Knowing which buyers missed another property matters.
The technology surrounding real estate has become incredibly sophisticated, but tough markets have a funny habit of returning agents to remarkably old-fashioned fundamentals:
Phone. Database. Follow-up. Relationships. Negotiation.
The real estate boom created too many passengers
There is another inevitable consequence of a prolonged downturn.
Agent numbers eventually come under pressure.
Boom markets attract people into real estate because the opportunity looks enormous.
Listings are plentiful.
Transactions happen quickly.
Commissions look attractive.
Then turnover falls.
Suddenly there aren’t enough listings to feed everyone.
The agents without established databases, repeat clients, referral networks or disciplined prospecting systems begin struggling.
That’s not necessarily bad for the industry.
As Found’s Brooke Gibson told RNZ, good agents will continue to list and sell, while booming markets can allow almost anyone entering the industry to perform well.
Tough markets effectively conduct an industry-wide performance review.
AI makes Australia’s timing even more interesting
Australian agents potentially face another challenge New Zealand agents didn’t have to the same extent when its downturn began in 2022.
Artificial intelligence is now advancing at extraordinary speed.
AI can write listing advertisements.
It can generate marketing campaigns.
It can draft vendor reports.
It can respond to basic enquiries.
It can analyse databases.
It can automate follow-up.
It can summarise buyer feedback.
It can assist with prospecting.
So just as Australian agents may have to work significantly harder to earn their commissions, technology is simultaneously making many administrative components of their jobs easier to automate.
That makes genuine human skills even more important.
Negotiation.
Trust.
Relationships.
Local knowledge.
Judgement.
Strategy.
These are becoming the agent’s real product.
Property Noise Take: Australia, welcome to real estate
New Zealand’s property downturn was brutal for plenty of agents.
But it also exposed something the boom had disguised.
A great market and a great real estate agent are not the same thing.
When houses virtually sell themselves, almost everybody looks competent.
It’s when the open home produces one buyer, the vendor wants last year’s price and that buyer submits an offer $100,000 below expectations that you discover whether the salesperson sitting at the kitchen table can actually sell.
Australian agents worried about today’s market could therefore take one useful lesson from New Zealand:
Stop waiting for the market to rescue you.
Build the database.
Make the calls.
Follow up the buyers.
Tell vendors the truth.
Improve your negotiation skills.
And prove why you’re worth the commission.
Because when the tide goes out in real estate, consumers finally get to see who can actually swim.
SOURCE: 1NEWS