All Flash But Little Cash For Agents

The Age

Saturday December 15, 2007

Ben Schneiders

IT IS meant to be all about fast cars, flash suits and a wallet bulging with cash.

But, instead, many of Melbourne's real estate sales agents get paid more poorly than you think, with nearly one in five earning less than $50,000 a year.

Another 24% of agents earn $50,000 to $75,000 - a range that includes overall average weekly earnings - in an employment market where most agents make their living through a mixture of commission and base pay.

A national survey of the industry by Macquarie showed that pay trends in Melbourne mirrored the rest of the country but in other ways the industry here was unique.

The average commission of 2.2% you pay an agent in Melbourne is the lowest in the four largest states surveyed and compares with a national average of 2.4%.

In Melbourne, commissions varied from 1.5% to 3.8%.

Macquarie relationship banking head of real estate Nick Dowling said the competitive Melbourne market explained the low commissions as agents were forced to compete more fiercely for listings.

Veteran agent Barry Plant said sales agent commissions tended to be lower, as a percentage, in the $1 million-plus market in Melbourne but were often above 3% in outer-suburban areas.

He said the market was fiercely competitive in some areas and less so in others.

"It's a fact of life there's too many agents in some of these areas," he said.

Competition meant many agents did not make as much money as the popular perception, the report found.

"It's surprising to a lot of people," Mr Dowling said of the results.

Earlier this year, the ACTU weighed in over agent pay and said commission-only payments were unfair for employees.

It accused employers of seeking an exemption from WorkChoices to pay a minimum wage.

The inaugural survey by Macquarie, which questioned more than 300 agencies nationwide, also showed Melbourne agents paid more of their commissions to their bosses than anywhere else in the country.

They took home, on average, 37% of the commission, compared with a national average of 40%.

But the rewards are immense for the top performers, with one in 14 selling agents in Melbourne earning more than $250,000 and in some cases more than $1 million a year.

In booming Western Australia, the top salesman in the firms surveyed made on average gross commissions of more than $370,000 in the past year - nearly $100,000 a year more than in Melbourne.

© 2007 The Age

Back to News Index | Back to Home