Perth Real Estate Agents Adapt to a Challenging Market as Unit Prices Gain Traction Nationwide

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In the ever-evolving landscape of Australian real estate, two significant trends have emerged: the diminishing number of real estate agents in Perth and the forecasted ascendancy of unit prices over houses in the coming years.

According to Sarah Brookes’ article, the real estate industry in Perth is facing a daunting challenge. The record-low number of houses on the market has resulted in a significant reduction in the number of real estate agents. As of January 2024, there were about 4500 licensed agents and 5500 sales representatives in the state, nearly 800 fewer than the previous year. This decline is partly due to the plummeting house listings, which fell to a record low of 3648 at the end of December. Paulette Contessi, director of Contessi Properties in Claremont, highlighted the struggles agents face, stating, “Without stock there is no income for agents.” She further explained the financial dynamics, noting that “the median house price in Perth is $660,000, that’s $11,892 gross commission of which on average 50 per cent goes to the agency.”

Agents are adapting by employing new tactics such as accepting commissions of less than 2 percent and selling homes off-market. Laura Johns, an agent with Ray White Dalkeith Claremont, commented on the market’s challenges, emphasizing that “the job looks glamorous on social media, but there is a lot of work that goes on behind the scenes that isn’t pictured.”

In another development, unit prices are forecasted to outstrip those of houses in the coming years, as reported by Daniel Butkovich. The national home price growth is expected to moderate to 2.7% in 2024, down from 5.52% in 2023. However, units are predicted to see greater increases, with Maree Killroy of Oxford Economics noting, “Low levels of advertised listings and affordability in pockets will prop up prices in these cities next year.”

This shift is attributed to deteriorating affordability and increased stock, leading to a softer pace of growth. While Perth, Adelaide, and Brisbane are expected to remain strong markets, Sydney and Melbourne are forecasted to see more subdued growth. Cameron Kusher, director of economic research at PropTrack, pointed out that “higher mortgage and living costs, rising unemployment and the potential for more stock coming to market could curb the runaway growth of 2023.”

In summary, the real estate landscape in Australia is undergoing significant changes. Perth’s agents are battling a tough market with innovative strategies, while nationally, the focus is shifting towards units, which are becoming increasingly attractive due to their affordability in a challenging economic environment.

References:

https://www.watoday.com.au/national/western-australia/it-s-not-million-dollar-listings-for-most-perth-real-estate-agents-abandon-the-industry-20240116-p5exr6.html

https://www.realestate.com.au/news/unit-prices-forecast-to-outpace-houses-in-coming-years/