7/27/2019 RP Data - Rising Sales to Benefit Agents (August 2013)

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Capital city12 mths to May

2013 ($m)

12 mths to May

2012 ($m)

12 mth

change

Change from

peak

Sydney $57,032.558 $54,427.313 4.8% -11.9%

Melbourne $38,374.965 $41,041.757 -6.5% -30.8%

Bri sbane $18,028.091 $17,417.934 3.5% - 40.3%

Ade lai de $10,257.810 $10,346.803 - 0.9% - 22.8%

Perth $24,012.545 $18,575.806 29.3% 0.0%

Hobart $1,276.018 $1,334.874 -4.4% -33.2%

Darwin $1,630.256 $1,306.764 24.8% -5.6%

Canberra $3,753.096 $4,086.155 -8.2% -29.7%

$0.00

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

$70,000.00

May-97 May-99 May-01 May-03 May-05 May-07 May-09 May-11 May-13

$million

S yd ne y M elb ou rn e Br is ba ne Ad ela id e Pe rt h

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

May-97 May-99 May-01 May-03 May-05 May-07 May-09 May-11 May-13

$million

0

20,000

40,000

60,000

80,000

100,000

120,000

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Jul-97 Jul-99 Jul-01 Jul-03 Jul-05 Jul-07 Jul-09 Jul-11 Jul-13

Quarterly sales (RHS) Quarterly value change (LHS)

esearch out today in the RP Data Property Pulse by analyst

ameron Kusher looks at the two main drivers of commissions ine housing market including the number of properties transactingd the value of those properties which are selling. According tor Kusher the good news story is that the beneficiaries of risingme values and a jump in sales volumes will be agents andokers with those located in Sydney the best off.

s the accompanying charts illustrate, not every city acrossustralias individual majors is showing an increase in total sales.omparing the annual total value of sales in May 2013 to May12 has shown an increase in Perth (29.3%), Sydney (4.8%) andisbane (3.5%). On the other hand, the total value of sales is

wer in Melbourne (-6.5%) and Adelaide (-0.9%).

ydney trumped as the city to record the largest total value ofles and as an example, the total value of sales results forelbourne and Brisbane is now lower than for Sydneys totallue.

lthough the total value of home sales is broadly rising, the grossmmission pool remains below its historic peaks across eachpital city except for Perth. Currently, the commission potentiala market like Brisbane is -40.3% lower than the peak of

0,217 million over the 2007 calendar year.

eal estate and broker commissions are difficult to calculatecause they vary based on the value of the home and incentives

hich may be offered. From a real estate agent perspective, wesume that commission rates are around 2.5 per cent of thelling price. For brokers, commissions vary but sit at around 0.6r cent of the value borrowed with some trail commissionsyable depending on how long the loan sits on financiers books,rKusher said.

e total value of sales over recent years has been quite flat afterling from a peak in late 2010 as home values and saleslumes began to fall. Over the 12 months to May 2013, there

as $207.9 billion worth of houses and units sold nationally.ased on the real estate agent commission prescribed previously,s equates to roughly $5.198 billion in available commission.

ssuming a typical home loan has a loan to value ratio of 80 pernt, this equates to $998 million in initial broker commissions.

With the number of home sales and values now trending higherd driven by lower mortgage rates, it stands to reason that the

mount of gross commission available for industry participants willntinue to rise, particularly as we head into the Spring Selling

eason. My advice for agents and brokers is to prepare now toap the benefits while these conditions last. Mr Kusher said.

ote: The national housing market has generally been one of

wer commissions over recent years with values and

olumes falling. Now with both measures trending higher RP

ata anticipates a steady rise in the amount of available

ommission which are both paid via sales and those available

a properties listed for sale over the coming months.

DISCLAIMER In compiling this publication, rpdata.com has relied upon information supplied by a number of external sources and RP Data does not warrant its accuracy or completeness. To the f ull extent allowed by law RP Dataexcludes all liability for any loss or damage suffered by any person or body corporate arising from or in connection with the supply or use of any part of the information in this publication. RP Data recommends that individuals undertaketheir own research and seek independent financial advice before making any decisions. 2012 RP Data Ltd.

Rising sales equates to increase in commissions for agents & brokerseal estate agents and mortgage brokers will welcome the recent groundswell in property sales across Australias capital

ties as more sales means more commissions on the back of news that transaction numbers are up by 18 per cent compared

last year, coupled with a recovery of 6.5 per cent in dwelling values since they started to rise in June 2012.

Combined capital city quarterly change in home

values vs. quarterly number of home sales

Total value of home sales

rolling 12 months

Total value of home sales rolling 12 months,

major capital cities*

Total value of home sales rolling 12 months, all

capital cities*

Source: RP Data, RP Data-Rismark Home Value Index

Source: RP Data

Source: RP Data

Source: RP Data

* Some cities may be recording a lag in results due to the l ength oftime it takes to receive a complete set of sales records

* Some cities may be recording a lag in results due to the l ength oftime it takes to receive a complete set of sales records

National Media ReleaseP Data Weekly Property Pu lseeleased: Thursday 22 August 2013