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New findings reveal that real estate agent commission rates are remaining stagnant or falling in key markets but rising in an unexpected place.
Commission rates have increased by a comparatively large 6.3 per cent in Western Australia, whereas markets on the eastern side of Australia mostly remained flat or fell over the year, according to data collated by LocalAgentFinder.
The highest average commission rate is in Tasmania at 2.96 per cent and the lowest is in South Australia at 1.99 per cent.
In real terms, this represents a $4,850 difference in commission payments on a $500,000 sale in Tasmania over South Australia.
Following Tasmania is Queensland with a rate of 2.62 per cent, Western Australia with 2.45 per cent and the Northern Territory with 2.43 per cent.
The ACT has a rate of 2.18 per cent, whereas Victoria and New South Wales are almost identical with 2.05 per cent and 2.03 per cent, respectively.
Over the year, Tasmania’s rates have dropped by 1.5 per cent, the ACT’s by 1.3 per cent, the Northern Territory’s by 5 per cent, South Australia’s by 0.6 of a percentage point and New South Wales’ by 1 per cent.
Queensland and Victoria were the only states where commissions were unchanged.
CEO of LocalAgentFinder Matt McCann said that the small decrease in NSW was something to watch over the coming months due to lower transaction volumes.
“Vendors could benefit from increased competition between agents if transaction volumes continue to fall,” Mr McCann said.
“Akin to New South Wales, we believe that Victoria’s low commission rate can be attributed to the fierce competition between agents across metro areas, namely the suburbs surrounding Melbourne’s central business district.”
The data from LocalAgentFinder broke down the commissions further and found that, interestingly, many states had higher rates in places other than the capitals.
Queensland’s highest rates were found on the Gold Coast as opposed to Brisbane, the ACT had larger rates in regions further afield than the Canberra CBD, and Western Australia had higher rates in regional areas while those in Perth enjoyed more favourable rates.
However, Mr McCann said that their research found that commission rates were not as influential to vendors as agents may believe.
“A recent survey that LocalAgentFinder undertook suggested that vendors want comfort that an agent’s commission rate is reasonably within the mid-range for a particular market,” the CEO said. “Once they’ve established that, they’ll move on to more important factors like the agent’s sales history, marketing fees and independent home owner reviews.”
