Real estate agents flee industry as housing market plummets, new figures show

Real estate agents are fleeing the industry as the housing market cools off from the COVID-19 big boom, new figures show.

Following the highest-ever number of real estate licences issued in 2022 by the Real Estate Authority (REA), the number of active licences has started to decline. 

New figures from REA show the total number of active real estate licences has reduced by 3.6 percent since March last year, from 16,692 down to 16,099.

While new licence applications have reduced by almost 25 percent in the year to March 2023.

REA said the application numbers are heading back to pre-COVID-19 levels following a jump in licences in correlation to the housing price surge.

In the period 2020-2022, REA saw a soar in new licence applications as more people joined the real estate profession during the hot real estate market and when other industries had slowed in response to COVID-19 conditions.

"We recognise that the current market is challenging. The decision made by some to leave the real estate profession may be an indication of this," REA chief executive Belinda Moffat said.

According to QV, average house prices peaked in the seven figures from October 2021 until June 2022, and have steadily been declining since.   

Figures released on Thursday showed New Zealand house prices fell by triple figures in the year to March, according to Trade Me data. Prices fell 10.9 percent ($105,450) in year-on-year terms to an average asking price of $866,000.

"While the cooling and complex market is likely to have contributed to the recent slight decline in total active licences, people may leave the real estate profession for a number of reasons. They may be entering retirement, taking another career opportunity, or even undertaking long-term travel," Moffat said.

As of March, the average asking price was $866,000.
As of March, the average asking price was $866,000. Photo credit: Getty Images

REA figures also show an eight percent uplift in licence holders choosing to suspend their licence, which means a person can not undertake real estate agency work but it enables them to return to the sector easier at a later date.

The biggest reduction has been in the salesperson licence category, which has reduced by 4 percent. In contrast, there has been a 6.7 percent increase in branch managers, which REA said is likely attributable to the availability of a new branch manager qualification. 

Moffat said in the current market, there can be increased pressure on licensees to meet a vendor's pre-sale expectations. However, she warned agents not to cut corners.

"It is essential that real estate licensees operating in this environment communicate well with their vendor client and fulfil the fiduciary obligations which they owe them. Maintaining up-to-date appraisals to support vendors to make informed decisions is key, and understanding how and when to use a wide range of methods of sale is important. Equally important is treating all people fairly. It remains critical that real estate professionals ensure that disclosure obligations are met, and the highest ethical sales standards are upheld," she said.

"Achieving a quick sale by cutting compliance corners runs a high risk that a complaint may be made to REA. Professional obligations such as disclosure must not be overlooked, and all parties to a transaction must be treated fairly, as required by the Code of Conduct REA oversees."

Part of REA's role is to help real estate licensees meet their obligations and to be trusted, capable and professional.