According to academic and former real estate agent Dr. Susan Flint–Hartle, the real estate industry in New Zealand needs to address the way property is bought and sold in the country. In a recent report by the New Zealand Herald, "She says the industry cannot afford to dismiss innovation in the way property is sold – regardless of the reasons for the recent collapse of the Joneses real estate agency."
In New Zealand, the cost factor in selling property places too much risk on one side of the equation, especially with the rising risk of property sales falling through. Bearing this in mind, a lot of real estate agents now seem to be working to sell their clients portfolio for far less than they are used to.
The Joneses was an agency that fell into the above trap and went into liquidation due to the inability to stay profitable. Instead of selling their services using the traditional model, the company worked to sell property at a fixed fee and hence take a cut in their commission payments.
Traditionally, the sale of property is done by a 4% of the house value of up to A $300,000 and then 2 per cent for any value above this amount.
The New Zealand property market is not without concern. The national median house sale price dropped from A $345,000 in the month of December to A $340,000 in January. Volumes also dropped.
