In the 5 year period preceding the Global Financial Crisis of 2007 there was a prolonged world wide residential real estate boom, particularly emphasised in NZ and more particularly within Auckland.
Bricks and mortar investment became almost an obsession, particularly in NZ, with individuals using whatever equity they had in their homes to make ‘paper’ fortunes.
Stories of fortunes made by Auckland Real Estate Agents also filled the media.
This created a proliferation of Real Estate Agents as the qualification was exceedingly easy to achieve, even migrants with almost no spoken English or understanding of NZ property laws entered the profession.
This, coupled with little self-regulation within the industry, lead to some very poor industry practices and low level service. The industry, quite rightly, earned a poor public reputation.
The number of Auckland Real Estate Agents far exceeded that needed to reasonably service the needs of the greater community.
Stories of “cowboy” practices made almost weekly media headlines.
As the industry was very slow to regulate these poor practices, the Government stepped in, passing the Real Estate Agents Act 2008.
The effects upon the Auckland agents of the 2008 Act, coupled with the GFC were dramatic. For the first time agents were required to obtain an individual licence, costing around $750 – previously, a practicing certificate cost in the region of $50. This cost alone caused many ineffective salespeople to leave the industry.
Secondly, there was a requirement that the educational qualification required to achieve licensee status was greatly increased, and the Act has flagged the future requirement for on-going education to retain a licence.
The third, and probably the greatest impact, was that individual licensee salespeople became personally liable for unsatisfactory conduct or misconduct with hefty fines and reparation replacing the previous maximum fine of $600 prior to the new Act.
The number of agents has dramatically declined for the first time ever, and those able to achieve a living income will see further declines into the next few years.
The decline in numbers has also put pressure on members to fund the newly established Real Estate Agents Authority and fees of up to $3000 are mooted.
With numbers declining, educational requirements increasing and penalties for misconduct increasing it is almost certain that the public will be better served by fewer, better qualified, more ethical, more professional Auckland Real Estate Agents.
This can only benefit those owners wishing to sell their home in the future.