The residential real estate industry in Australia is bracing for a significant workforce contraction as challenging economic conditions intensify. Industry insiders estimate that up to 25 percent of selling and buyer's agents could exit the sector following a prolonged period of favorable market conditions.
Jacob Caine, chief executive of the Real Estate Institute of Australia, highlighted that the current market slowdown is prompting many agents to reconsider their careers. While historically between 10 and 15 percent of agents transition out of the industry during cyclical downturns, the current environment, marked by declining sales volumes and increasing market competition, could push this figure higher. Caine noted that this shakeout may be beneficial, removing underperforming agents who have benefited from recent easy selling conditions without delivering genuine value.
The downturn has been accelerated by recent policy changes, including investor tax adjustments introduced in the federal budget and a series of interest rate rises, which have dampened demand. National real estate firm Ray White has already experienced a reduction of approximately 100 staff since May, and the total value of unconditional home sales has fallen by 15 to 17 percent over the past month, following a 20 percent decline the previous month.
Despite the contraction, Ray White’s managing director, Dan White, emphasized that the more challenging market offers opportunities for skilled agents to enhance their market share. "Good people in these times will go the extra yard, and that'll be noticed by clients," he said, adding that buyer expectations now favor agents who demonstrate energy, enthusiasm, and a strong work ethic.
The impact appears uneven across different types of agents. Sellers’ agents are holding up comparatively well, while buyer’s agents, who surged in popularity during the pandemic-driven housing boom, are facing mounting pressures. Many buyer’s agents specializing in investor clients have either pivoted their focus or downsized. Zohan Solan, president of the Real Estate Buyers Agents Association of Australia, reported observing multiple buyer’s agents attending open homes without clients, suggesting some are maintaining a presence in the market primarily to stay informed.
Both buyers' and sellers' agents will need to refine their negotiation skills in response to the softer market. Dan White remarked that the ability to use effective communication and encouragement to motivate buyers is being revisited, as these skills have been underutilized during recent years of high demand.
Notwithstanding the overall buyer-favorable environment, prominent buyer’s agent Simon Cohen stressed the ongoing value of expert representation. Particularly in the luxury segment, where off-market sales are common to avoid publicity, skilled agents can help clients secure advantageous deals and avoid overpaying. Cohen noted, “You want to be the hero who found the bargain,” underscoring the continued importance of experienced agents in navigating a shifting real estate landscape.