Earthquake pushes agents out of real estate business

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Almost 200 estate agents in quake-hit Canterbury and neighbouring Westland have quit the industry, and another 398 have put their real estate careers on hold, in the wake of the February earthquake.

Figures from industry body the Real Estate Agents Authority (REAA) show a quarter of the region's individual real estate licences and 25 company licences were suspended or cancelled at the end of March, with one industry expert picking the number could go higher still.

Agents say a lack of listings - last year was one of the worst in decades for sales volumes - coupled with a hike in licensing fees, and the Christchurch earthquake had driven the departures.

Overall there were 13,903 licensees in New Zealand on April 30, about 20 per cent less than one year ago.

The REAA said many of those had left the industry prior to the earthquake.

Tony Brazier, of Christchurch-based Brazier Property Investments said more people may quit the industry come September 30, when the bill falls due for the 800 licensees in Christchurch who have elected to defer payment of their licence.

Of those operators who have cancelled their licences in Canterbury to date, most had been 'nudged' into early retirement, while others "can't be bothered with the likely time-frame to get back to normal, if there is such a thing", Brazier said.

Most other company operators would re-licence regardless, even if it meant spending their last dollar, he said.

"It's just too hard to let it lapse and much easier these days to be seen to still be operating even if it is with a dormant trust account.

"Real estate agents are notorious for always showing an 'everything's great' perception to the public and their competition."

Harcourts chief executive Hayden Duncan said the impact of the low sales figures and the earthquake, had not been as significant on Harcourts as the industry figures might reflect.

"Within Christchurch we anticipated a non-renewal level of 10 per cent, and have as a group ended up a lot more positive than that."

Harcourts had consolidated some of its 'multi-office' businesses as a result of the earthquake in Christchurch, but Duncan said he was not 'unhappy with the situation' given the challenges the city had faced.

"I think there have been a number of sales consultants that have operated on a part-time basis in the industry traditionally and the level of accountability, professionalism and expectations placed on realtors in New Zealand today makes it difficult for them to remain financially viable.

"This is a trend that may continue again next year before we start to see a levelling off of licensed numbers dropping, especially if the market remains flat," he said.

First National real estate's general manager John Stewart said the drop in active licenses was no surprise, even without an earthquake in the mix.

"Last year was one of the worst in terms of sales volume in decades for the majority of salespeople and offices, so when coupled with only slight lifts for some in 2011 and the increase in licensing fees, there was always going to be a big decrease this year."

Canterbury/Westland (April 30, 2011):

*187 individual licences not renewed
*6 company licences not renewed
*398 individual licences suspended
*19 company licences suspended
*800 Christchurch licensees chose to renew their licence but deferred payment of the fees and levies until September 30.