The Queenstown president of the Real Estate Institute has some pithy advice for anyone entering the field right now.
“Be prepared to work hard,” Adrian Snow warns.
In the Wakatipu, 156 registered salespeople compete for what Snow estimates is an average of about 40 home or section sales per month.
Only about 120 of those salespeople are active, Snow reckons – and perhaps 25 or more are part-time.
Yet 40 sales spread among 120 salespeople mean only one agent in three makes a sale each month – the other two starve.
Based on Snow’s rough formula, the average agent would gross about $3000 per month or $36,000 a year.
With most agents being independent contractors, expenses like cars and phones have to come out of that $36,000, as well as tax.
It may be even more elitist – Mountain Scene counted 24 seasoned veterans on the register of licensed agents, each with 20 years or more experience, who probably gobble up a disproportionately large share of deals.
“It looks like a fairly simple business model from the outside but real estate is actually fairly hard to do,” Snow says.
And it’s tough out there right now: “In this climate, the first two years in real estate are likely to be very hard.”
Half of all new entrants leave within that crucial two years, Snow says.
With the new licensing body, the Real Estate Agents Authority, recently announcing a hike in its levy to $793 a year, Snow expects more drop-outs.
Of the 36 licensed but inactive local agents, he says some will have retired, some will be in administrative positions in real estate firms, and others will be property managers.
Mountain Scene also spotted a commercial property landlord, a restaurateur, an art gallery owner and a valuer on the list of licensees.
With Wakatipu property commanding the country’s highest prices, Snow puts median commission per sale at about $20,000.
Of this, the real estate firm takes about $11,000 and the remaining $9000 is split evenly between listing agent and selling agent.
If you’re good enough, real estate can be good to you – even in the current slump, top local agents still gross $200,000-$300,000, Snow says.