Improved operating environment for WA estate agents in 2012: REIWA’s David Airey

WA estate agents are enjoying an improved operating environment in 2012 following a difficult 2011, says David Airey, president of the Real Estate Institute of Western Australia (REIWA). 

His comments follow the surprise finding of the 2012 Macquarie Residential Real Estate Benchmarking report that 18% of WA estate agents made a loss in 2011. 

Airey attributed 2011 difficulties to “sluggish turnover” off the back of low consumer confidence. 

“Thankfully, we have seen things turn around in December 2011 and March this year, with prices up slightly and turnover jumping by 24% for the start of this year,” he tells Property Observer. 

Airey says listings have now come down to a long-term average and the market has returned to a more usual pattern after bouncing around for the past five years. 

Figures released by the REIWA on June 6 show that the number of properties for sale in Perth has come down significantly to be at its lowest level since April 2010.

The institute says the number of properties on the market including houses, units and land fell to 12,975 in early June. 

At the end of May, REIWA data showed current listings in the metropolitan region sitting at 13,291, with the number of listings trending downwards during 2012 after a peak in March of 14,358. 

“We are now at a level below the start of the year and have pretty much returned to the equilibrium we might expect from normal market conditions. 

“This is because the 2,840 listings for land is over-represented when compared with historic trends, and more developers are now listing on reiwa.com,” Airey says. 

At the same time as listing are falling, the REIWA says reported sales have been showing a steady increase as the market returns to average turnover levels. 

Airey says the high number of listings and lesser number of sales in 2011 made life difficult for many agencies, some of which were relying on rent rolls for bread-and-butter income.

The Macquarie report found that 20% of Queensland estate agents made a loss in 2011.

Real Estate Institute of Queensland (REIQ) CEO Anton Kardash says the reduction in profitability for Queensland real estate agencies in 2011 is not overly surprising "given the terrible natural disasters we experienced last year".

“These adverse weather events, coupled with the ongoing national and global economic uncertainty at the same time, meant that Queensland real estate agencies experienced some of these leanest times in many years. Indeed, many agencies choose to close their doors, reduce staff, or amalgamate to remain financially viable," Kardash says.

“This year, however, is heralding a much better period for Queensland agencies with greater overall confidence being reported in the market as well as strengthening levels of activity.

“Many agents believe the bottom of the Queensland market has passed which, together with lower interest rates and more affordable property prices, is starting to attract buyers.”