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As the issue of the traditional real estate commission model gathers more attention in 2019, new research has found that the average commission paid to agents nationally has increased by 0.71 of a percentage point.
The LocalAgentFinder Commissions Report has found that commissions are highest in Tasmania, where the average commission rate is 2.89 per cent, and lowest in South Australia, where it is 2.03 per cent.
The report found that on a $500,000 property sale, Tasmanians are paying $4,300 more in commission than in South Australia.
The LocalAgentFinder report analysed real-time commission data from over 4,700 registered real estate agents in January 2019 and compared that to commission data from May 2018.
Tasmania is followed by Queensland (2.59 per cent), the Northern Territory (2.58 per cent), Western Australia (2.44 per cent), the Australian Capital Territory (2.20 per cent) and an almost identical Victoria (2.05 per cent) and New South Wales (2.04 per cent).
LocalAgentFinder CEO Richard Stevens said that while not always the case, the average commission rate can often track stronger in weaker market conditions.
“Property is not selling as quickly as it used to in many markets, so where there is an uptick in the average commission rate, it may be real estate businesses looking to protect themselves in light of changing market conditions, or benefit off increased activity after a slower period.
“According to CoreLogic, Sydney recorded the largest fall in property prices in Australia last year, and our data shows that, conversely, the city recorded one of the largest jumps in the average commission rate.
“If property markets continue to be challenging in 2019, it is possible that consumers may experience further increases in commission rates in many markets.”
The report found that non-metro areas have substantially higher commission rates, at 2.52 per cent, than metro areas, at 2.09 per cent.
It also found that for property sales over $1 million, the average commission charged was 2.16 per cent.
“It might be logical to expect that consumers would be drawn to agents with the lowest commission rates, but a survey we conducted suggests otherwise,” Mr Stevens said.
“Consumers are generally comfortable with a commission rate so long as it is reasonably within the range of the average. They pay close attention to factors like sales history, agent reviews and marketing fees.”
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