KEY POINTS:
The property downturn could see an exodus of agents from the industry, Real Estate Institute of New Zealand (REINZ) president Murray Cleland says.
House sales have hit a wall in recent months as higher interest rates put the brakes on buyer demand.
REINZ figures out this month showed just 5129 sales in March - less than half the 10,989 sales in March 2007.
REINZ chief executive Christine Le Cren today said the boom of the past few years had seen the ranks of agents swell.
Turnover of licensed agents and salespeople had been constant between 15 and 18 per cent over the past four years.
But Mr Cleland said that was likely to rise higher in the coming year.
"It is no secret that the number of sales has gone down in recent months and I think probably you will see some sales people who will drop out."
He said the downturn would hit agents in the cities the hardest.
Their comments came at a select committee hearing into legislation that would strip REINZ of its current regulatory powers and hand them to an independent Real Estate Agents Authority, which would oversee licensing, complaints and disciplinary action over the country's 18,000 agents.
REINZ was returning to answer questions from the committee.
Asked if the framework contained in the legislation would be sufficient to deal with complaints, Ms Le Cren said she believed it would struggle in the face of a predicted increase in complaints once people became aware the legislation allowed them to claim compensation.
REINZ believed three separate regional complaints committees would be needed to deal with the level of complaints that would flood in.
Under the current bill there would be one Complaints Assessment Committee.
But a spokeswoman for the minister in charge of the legislation, Clayton Cosgrove, said officials had already looked into the issue of additional resources that might be needed to cope with an initial flood of complaints.
That work would be put before the select committee which could decide whether some allowance should be made in the bill.
Ms Le Cren also said REINZ wanted the bill to be absolutely clear that agents would need to complete continuing education regarding legal and regulatory issues in order to have their license periodically renewed.
REINZ had been concerned for four years about people becoming licensed through a backdoor loophole created by trans-Tasman mutual recognition clauses in CER.
That enabled unqualified people to complete a one-week training seminar in Sydney, then demand a license from the Real Estate Licensing Board in New Zealand.
Agents usually required two years' experience to become licensed.
The minister's spokeswoman said the bill had already been changed to make ongoing training compulsory.
Industry members can be appointed to the authority. REINZ has been arguing this be compulsory.
- NZPA
