Commission cuts, agent evolutions and recovering markets ahead in 2019, network chiefs predict

Friday 11 Jan 2019

REB asked three industry leaders how they anticipated 2019 might pan out — for agents in particular, and the industry in general. Predictions ranged from changes to the agent value proposition and commission cuts to recovering markets and royal commission mop-ups.

CEO at Better Homes and Gardens Real Estate Simon Cashman said that the industry is likely to migrate from being simply transactional to becoming a full-service business in the year ahead.

In a similar vein, Purplebricks Australia CEO Neil Tavender said that “high-street” agents might not be an attractive enough proposition to cautious sellers, and he expects to see some consolidation and even branch closures in 2019. 

Executive chairman at Raine & Horne Angus Raine focused on the impact of the banking royal commission, saying now that it is mostly behind us, access to finance will loosen and some markets will get moving again.  

All-in

Mr Cashman said that the role of the agent has evolved.

“For the agent to remain king, he or she needs to be across multiple channels of the complete property journey, not an expert but the go-to guy to bring it all together — the brains trust,” Mr Cashman told REB.

“If ‘service first’ isn’t embraced, then tech will outsmart the agent, diminishing their value proposition and ability to sustain or justify charges.”

Mr Tavender said that another lever to that evolution is the pressure felt by commission-charging agents in 2018, especially in the latter part of it.

“I expect this pressure to continue in 2019, culminating in traditional agents lowering their commission rates, which in some cases have been extortionately high through the property boom,” Mr Tavender said.

“The market is poised for change in 2019 and beyond. First and foremost, we need to see more transparent commissions from traditional agents.”

Affordable 

Mr Raine said that the “grey cloud” of the royal commission will dissipate in 2019, leading to better conditions. 

“Some capital city markets will continue to rally in 2019, thanks to more natural lending conditions, continuing low interest rates and price affordability, compared to the significant southern capitals,” Mr Raine said.

Mr Tavender also expects property prices to stabilise.

He said that things might turn around quite quickly.

“By the spring sale season next year, we predict we will have seen the worst of the price drop. At this point, we may see first home owners re-entering the market looking for a bargain,” the Purplebricks CEO said.

- Tim Neary