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Mortgage brokers will no doubt welcome the recent groundswell in property sales across Australia’s capital cities, with transaction numbers climbing 18 per cent over the last 12 months.
According to RP Data’s latest Property Pulse report, the Perth market has been a standout performer over the last year, with annual total value of sales climbing 29.3 per cent.
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In Sydney, value of sales rose by 4.8 per cent, while Brisbane saw a 3.5 per cent lift.
But not every capital city recorded an increase in total sales, with Melbourne witnessing a 6.5 per cent fall and Adelaide recording a 0.9 per cent drop.
RP Data’s Cameron Kusher said Sydney trumped as the city to record the largest total value of sales and as an example, the total value of sales results for Melbourne and Brisbane is now lower than for Sydney’s total value.
“Although the total value of home sales is broadly rising, the gross commission pool remains below its historic peaks across each capital city except for Perth. Currently, the commission potential in a market like Brisbane is 40.3 per cent lower than the peak of $30,217 million over the 2007 calendar year,” he said.
"Real estate and broker commissions are difficult to calculate because they vary based on the value of the home and incentives which may be offered. From a real estate agent perspective, we assume that commission rates are around 2.5 per cent of the selling price. For brokers, commissions vary but sit at around 0.6 per cent of the value borrowed with some trail commissions payable depending on how long the loan sits on financier’s books.”
The total value of sales over recent years has been quite flat after falling from a peak in late 2010 as home values and sales volumes began to fall. Over the 12 months to May 2013, there was $207.9 billion worth of houses and units sold nationally.
“With the number of home sales and values now trending higher and driven by lower mortgage rates, it stands to reason that the amount of gross commission available for industry participants will continue to rise, particularly as we head into the Spring Selling Season. My advice for agents and brokers is to prepare now to reap the benefits while these conditions last,” Mr Kusher said.
