Actual property businesses estimated to have earned $437 million in residential gross sales fee within the final three months of 2019
By Greg Ninness
Santa Claus brought a lot of Christmas joy to the real estate industry last year with a sharp increase in commission income in the fourth quarter (Q4) of 2019.
Interest.co.nz estimates that real estate agencies made nearly $ 437 million in gross commissions on residential property sales in the three months from October to December last year. This is its highest level since the second quarter (Q2) of 2016, when the industry earned an estimated $ 469 million in commissions, which was at the end of the last real estate boom.
The estimated $ 437 million earned in the fourth quarter of 2019 increased 10% over the same period in 2018 and increased 18% over the same period in 2017.
The increase in commissions was due to both rising sales and prices in most regions.
In Auckland, by far the largest residential property market in the country, agencies earned an estimated $ 171 million in residential property sales commissions in the fourth quarter of 2019, up 20% over the same period in 2018.
However, the largest annual growth in estimated commission was seen in Southland, where it was up 28% in Q4 2019 versus Q4 2018, closely followed by Nelson + 27%, then Bay of Plenty and Auckland with + 20% each, Tasman + 13%, Waikato + 12%, Hawke’s Bay and Manawatu / Whanganui both up + 9% and Northland + 6%.
However, several regions saw a drop in estimated commission in Q4 2019 compared to Q4 2018, led by Wellington -23%, Gisborne and Taranaki – both -7% and Marlborough -2%, while the West Coast remained unchanged.
In regions where estimated commission income declined year-over-year, the decrease was more due to lower sales volumes than to a fall in prices.
The figures suggest that the real estate market declined in the first half of last year and that estimated commission levels in the first and second quarters were lower than in the same period in 2018, but then the market rallied in the third quarter of last year when Estimated commissions were over the same 2018 period before closing heavily in the fourth quarter.
Overall, estimated commissions on residential property sales for the full year 2019 were $ 1.551 billion, up 3% from 2018 and up 11% from 2017.
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