Agencies must adjust to fewer transactions

Agencies must adjust to fewer transactions

by Simon Parker 3 comments

PERTH: Sharply lower property sales volumes - which are down by as much as 50 per cent in parts of WA post-GFC - may be here to stay, and principals must adjust their business models accordingly, the head of the Real Estate Institute of WA (REIWA) has said.

“We're probably going to do 20 to 25 per cent less residential property transactions from what we're used to,” said REIWA president David Airey.

“Those long-term averages are going to drop. If that’s the case, agents [and principals] need to cut their business cloth according to what's likely to be ahead.”

Mr Airey, who was talking to Real Estate Business on the sidelines of the WA Real Estate Open Forum, a principal-focused event run by Macquarie Bank, and Realestimations, said transaction levels were down by as much as 50 per cent in some regional parts of WA since the GFC.

“That's put a lot of different pressures on most people's businesses,” he said.

The main pressures related to costs, and too many staff.

“It has been a good opportunity for a lot of companies to go back to basics, and see what [they] actually need in the way of people and resources to run the business.

“Western Australia is renowned for high commissions to sales people, higher than the national average. I'm talking the 50s, the 60s and the 70 per cents to some extent. That's changing a lot.

“The we're probably going to keep fewer sales staff on the team, and probably have them on a retainer or a better salary base, something a little bit more permanent and secure.

“At the same time, commission will be lower. So, there's an incentive to create a career rather than just being a ‘high-flying’ sales person.”

Mr Airey's comments came at the same event that Realmark director John Percudani told principals that agents must offer increasingly demanding consumers much more than just a 'professional' service. “The real ability to differentiate yourself in the marketplace is now in the intangibles, and that is the hardest thing to address, but it is the place that's the most powerful."

Mr Airey agreed with Mr Percudani's approach.

“This downturn will sort out a lot of wheat from chaff,” Mr Airey continued. “It will bring out a lot of really good real estate agents.”

Agencies must adjust to fewer transactions
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
New Podcast: Piers van Hamburg reveals why “the relationship” is key in real estate

In this episode of the Secrets of the Top 100 Agents, Tim Neary talks to McGrath Estate Agent, Piers van Hamburg who is ranked 39 about his ...

View all podcasts

Have real estate agents become too money obsessed?

Only a small section of them, and they are giving the whole industry a bad name
Most of them, and this is why the industry has a bad name
Do you have an industry update?