Real Estate Careers: Boom Or Bust?

When the four apartments on The Block sold last week for an average of $760,000 over their reserves, who had cause to celebrate? The couples who had to give up months of their lives to work on them, the companies who got prime-time product placements, the television network? Yes, yes and yes. But there’s another group that certainly would have felt like winners: the real estate agents.

Australia’s property market seems to reach new heights with every passing auction day, so we thought it was time to take the pulse of the real estate industry and see if all this growth is a good news story for jobs. Here are your burning questions answered.

What are your options?

A career in real estate doesn’t just have to mean selling houses. Here are some of the ways you can get involved:

With many real estate jobs, a lot of important learning goes on while you’re on the job, but these courses will provide you with solid footing:

• Certificate IV in Property Services (Real Estate)
• Certificate III in Property Services (Agency)
• Bachelor of Property and Real Estate
• Diploma of Property Services (Agency Management)

If your dream job includes selling property then you will need to get accredited. Each state has its own requirements, so here are the courses that will get you on your way:
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Is it a big industry?

It might surprise you to know that the real estate sector brings in 2.9 per cent of GDP. That’s more than administration and support services, agriculture and hospitality.

In terms of the jobs market, 1.9 per cent of Australians are employed in the industry. That may not sound like much, but it’s actually the same percentage as media and communications, and mining.

Australians are big investors in real estate. A whopping 19.5 per cent of Australia’s capital expenditure (investment) goes into the ownership of dwellings, with a further 4.3 per cent going into rental and real estate investment. These sectors combine to be only slightly less than investment in mining, which sits at 26.6 per cent.

Is it still on the up?

Leading market analysts at IBISWorld expect big things, suggesting that population growth and an increase in high-density housing will drive industry expansion. They expect industry revenue to increase by 1.6 per cent a year to reach $9.8 billion in 2016-17.

What’s the job outlook?

Unemployment for real estate agents is below the national average and in the five years to November 2014, employment grew strongly (up by 23.1 per cent).

Employment is expected to increase at an above average rate over the five years to November 2019 (up by 12.6 per cent, or 27,800 jobs). The vast majority of those jobs are expected to be created in the area of ‘Property Operators and Real Estate Services.’

What’s the demographic?

The industry has a slightly higher proportion of females than the national average, and workers are more likely to be employed full-time.

What are the challenges?

There’s huge competition in real estate, so you have to be prepared to work hard. And, like any other industry, there have been disruptions to the old way of doing things. Consumers can now buy and sell their houses online, they can take advertising and marketing into their own hands, and they can even manage their own properties with dedicated websites.

Nick McGuire has been in the game since 1997, with roles as a selling agent, agency-owner (10 years) and a consultant. He trains real estate agents with PRDnationwide, and notes four significant changes:

‘The introduction of the internet and real estate portals; professional photography; database marketing; and the final one – which we are on the cusp of now – a social media tsunami.’

While these changes have brought about their challenges, there is one major challenge that any agent needs to work very hard to overcome: the perception of the real estate agent. Seller’s agent Roger Clark has over 40 years’ experience in real estate, and he’s noted the change:

‘The ability of agents to realistically, honestly and accurately appraise property has reduced to scandalous levels. Perception of respect for agents and the integrity of agencies has noticeably declined.’

A Roy Morgan survey released just last week ranked real estate agents lower than politicians and lawyers in terms of their perceived trustworthiness. The survey ranks 30 professions, and nurses were at the top with a score of 92 per cent, followed by doctors and pharmacists on 84 per cent. Only 9 per cent of the 598 survey respondents scored agents highly for honesty and ethics, meaning that the profession shares its place at the bottom with bank managers, lawyers and state and federal MPs.

On the brighter side, if you work as an estate agent you will be more trusted than advertising professionals or car salesmen – just. But that means there is also some good news: if you become a trusted agent with a loyal following, then the possibilities really open up. And the qualities you need for this? McGuire’s advice might surprise you:

‘The perception is that you’re a people person and you love to talk, but being a good agent is about being a good listener; to ask questions and to be an active listener is the most important thing in real estate. People want to be listened to.’

Sounds simple enough, but it’s going to take some effort to revise the old agent stereotype. 

 What about the pay?

The median weekly income for real estate agents is $921–$1,050. While that may sound decent enough, the earning potential for successful real estate agents goes far beyond this when commissions come into play. Commission rates vary from agency to agency and also depend on the market that you operate in. For example, regional areas typically yield higher commissions by as much as a couple of percentage points, but the higher rates exist to offset the lower turnover of property in those areas.

To give you an idea of the current state of play, here are the average commissions in each of the capital cities:

Sources: SellMyCastle, Domain House Price Report, Dec ’14

Tim Lawless, Head of Data at CoreLogic RP Data, gives some indication of how the Australian property market has fared after the GFC:

‘Sydney dwellings are now 40.2 per cent higher relative to the May 2012 trough. If you factor in the previous 2009/2010 phase of growth, Sydney values are now up 65.4 per cent post GFC … Melbourne is the only other capital city that comes close to this measure where dwelling values are 52.3 per cent higher post GFC.’

He goes on to list growth rates for Darwin (26.5 per cent); Canberra (19.8 per cent); Perth (15.2 per cent); Adelaide (12.2 per cent); Brisbane (8 per cent); and Hobart (1.2 per cent). That’s a good news story no matter where you are.

And what do higher prices mean? Bigger commissions!

McGuire says ‘if you’re not earning $100,000 then you’re in the wrong business’. And it’s certainly a great time to be in the industry if you’re an experienced agent, but the only drawback: it takes a little while to establish yourself and get some credibility. Thankfully, new starters have to go on a salary with a bonus system before they can go commission only – it gives them a safety net when they need it.

That can mean the first one or two years will be a bit lean, but if you can stick it out, the rewards are great. As McGuire says, ‘you’ve got to be able to weather the storm and have people come to you. The longer you’re in the business, the more relationships you will have developed and nurtured. It just gets easier and easier the longer you’re in it.’

Is it all just selling houses?

Well, it’s all about property, but there are lots of different ways to sell it. These days the most successful estate agencies have teams of professionals working together. McGuire notes the increasingly adopted approach of setting up Effective Business Units (EBUs), which typically include a listing agent, a buyer’s agent and a marketing professional.

There are growing opportunities for property managers, who McGuire says can now earn up to $100,000, and he also notes the emerging role of the buyer’s agent: ‘People are time poor and don’t have time to go through the process [of looking]. Sometimes the buyer’s agent can pound the pavement for you and find the property that suits.’

As the market booms, so do opportunities for other kinds of professionals such as property writers, administrators, videographers, social media managers and marketers – there are even property photographers who Photoshop in virtual furniture! McGuire suggests that the real estate sector is also becoming more sophisticated at incentivising professionals in all kinds of roles to bring in leads and reach customer-focused KPIs – extending from receptionists at the front desk to business development managers on high retainers.

What are the perks?

There are the obvious perks, such as the fact that if you’re successful, you can increase your wealth significantly – but what about the things you haven’t thought about? McGuire says he enjoys meeting people he wouldn’t get to meet if he worked in another industry – successful individuals, celebrities, architects – and getting to experience and appreciate beautiful properties.

These are pretty nice perks, but it’s the final one McGuire mentions that really gets the thoughts running: ‘the third thing is to see people make money out of properties. The experience you get at the coal face is invaluable and you get to see how others do it before you think about having a go for yourself.’

What is the industry looking for?

With a market booming before our eyes, you would think that the answer would be ‘anyone!’ – but like a gold rush or a mining boom, there are plenty of people with the same idea.

McGuire says the market will value those who can go with the flow and meet the demands of its customers:

‘The people coming into the industry understand that you have to keep adapting. It’s going to be those people who can adapt quickly that will benefit most in terms of profile, more business and more money.’

Not only that, but you need to be prepared to go the extra mile.

‘Commit 100 per cent or don’t bother. If you aren’t prepared to work on Saturdays and Sundays, if you aren’t prepared to work after hours, listen to what customers want, and listen to your boss, it will be a waste of time and money. It will work, though. It will pay off, but a lot of people don’t give it that 100 per cent commitment.’

What should you do to get started?

The first step is to get qualified, and then certified. In order to work in real estate you will need to have a Certificate of Registration (otherwise known as a real estate licence), which is issued by your state. You will need to have attained at least a Certificate IV in Property Services (Real Estate), up to a Bachelor of Property and Real Estate. New South Wales and the Australian Capital Territory also require you to complete annual courses as Continuing Professional Development (CPD).

Once you’re on your way with your qualifications, you also need to find some industry experience. Remember, it will take a year or two to establish yourself, so you’ll need to surround yourself with supportive people. McGuire believes a good mentor is crucial for new agents:

‘If you’re not getting the mentoring and advice from your principal, find another one. Find someone who’s going to be right for you. Not everyone suits each other, but in this business it’s crucial that you have training and coaching, and that you’re looked after, because it’s a tough gig.’

Still not sure?

Whether you think the bubble is about to burst or you’re settling in for the long haul, it seems that as a successful agent you will rarely find a quiet moment. I asked Seller’s agent Roger Clark if he thought it was a good time to enter the industry. His answer seems tried and tested:

‘There is no good or bad time for a good, smart, hard working agent to start in real estate: Ray White’s son, Alan White, told me 40 years ago: “When it’s good, we sell them in. When it’s bad, we sell them out!”’

Think you could make a go of it in real estate? Get cracking with our online real estate courses.