PHOTO: Real estate agents. SPINOFF
According to STUFF the number of people enroling in the Open Polytechnic’s real estate agent training courses is on track to fall 35% compared to last year, the tertiary education provider reports.
Chief executive Caroline Seelig said enrolment changed year-to-year, and often followed the housing market, which is in the midst of a serious downturn.
The Real Estate Institute (REINZ) recently reported house prices had seen the largest six month drop since the institute’s records began.
Infometrics meanwhile forecasts real estate agents are likely to see their take home pay fall by a fifth as a result of falling house prices and sale volumes.
In 2021 Open Polytechnic enroled 659 equivalent full-time students in its real estate programmes.
“For 2022 we are currently forecasting enrolments of around 430 equivalent full-time students,” Seelig said.
Open Polytechnic is a subsidiary of Te Pūkenga and specialises in distance learning.
Ray White Carpenter Realty’s owner Glenn Carpenter said the industry was responding, as it always did, to a downturn.
“The industry in general will have more failures and people leaving as the market contracts, and that’s normal. I think back in 2008 during the GFC 20% of the industry quit in about the first six or seven months.
“They were generally the ones who were just hanging in there.”
Carpenter said another agent summed the situation up perfectly by describing the industry as “self-cleansing”.
In August, figures showed the number of real estate agents shrank by 235 in three months.
Carpenter said some other agencies were following a playbook whereby they went on a spree to gain more agents, which they hoped would allow them to gain a larger piece of a smaller pie.
“If the pie is shrinking you need more agents to maintain the same figures,” he said.
“I don’t operate a bums-on-seats operation – we would rather have a high quality of agents and a higher quality of training, and not have a hundred-billion people all running around fighting each other.”
Real estate agents are generally contractors and work almost entirely on commissions from sales.
A key driver of financial pressure for real estate agents is a fall in the number of sales occurring, even as supply of available homes for sale booms.
Sale volumes were sitting at over 100,000 a year mid last year, and that had reduced by roughly a quarter to about 75,000, and were forecast to fall further, according to Infometrics.
Auckland hit a 22-year low in sales in August.
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