Game of Homes: Property ‘royalty’ struggles as market falls

New Zealand has a record number of estate agents but, even in a down market, disputes between them are rare, making a fight between property “royalty” all the more unusual. Ged Cann reports.

She calls herself “the queen of property”, while he calls himself the “prince” of the market.

When she announced that her company was “the most ethical”, he erected a large billboard over her Christchurch office in protest. He then took to the country’s most popular business podcast to criticize her market projections, resulting in a legal letter from her.

The dispute between Propellor Property founder Nikki Connors Y operating partners Managing Partner Andrew Nicol it occurs in a market where prices and sales are falling, and there are more people competing to sell each property.

Nikki Connors is the founder of Propellor Property.

Chris McKeen/stuff

Nikki Connors is the founder of Propellor Property.

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According to figures from the Real Estate Authority (REA), as of May 31 there were a record 16,809 real estate agents, sellers and branch managers in the market, from the previous high of 15,848 late last year.

These agents are competing in a market where 17,000 fewer sales expected this year compared to last according to CoreLogic, with house prices already falling 6% and more falls are expected.

The strain of higher interest rates, rising construction costs and falling prices is already showing, and the CEO of Master Builders said the construction industry is likely at the beginning of a bankruptcy cycle.

Three companies run by Connors are now faces liquidation following Inland Revenue requests.

Despite the market reversing in 2022, REA chief executive Belinda Moffat says the authority has yet to see an exodus of active licensees.

REA Executive Director Belinda Moffat reckons the real estate market will recede in 2022.

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REA Executive Director Belinda Moffat reckons the real estate market will recede in 2022.

change of tactics

Ray White franchise owner Tom Rawson says disputes between those in real estate are rare because the industry is regulated, but as the market falls, some agents resort to cutting commissions or overpricing sales. properties to win customers.

When the latter happens, he says his agents usually sit back and wait, because in a down market the tactic typically leads to months without a sale, after which sellers will switch to a more realistic agent.

Ray White franchise owner Tom Rawson says many agents have left the profession this year.

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Ray White franchise owner Tom Rawson says many agents have left the profession this year.

Rawson says the REA figures are lagging and only show churn when licenses aren’t renewed, which can happen months after an agent stops selling.

He says he has already seen many leave the profession this year, as sales get harder to do.

queen vs prince

Some real estate personalities, however, do not go quietly into the night.

Both Opes and Propellor work with developers, matching new builds with investors, providing financial advice and evaluation, and receiving a fee for setting up purchases.

When Nicol put up the billboard over the Propellor offices in December 2020, Connors received a late-night email with a photo of him and his colleague Ed McKnight standing underneath.

It read: “Prepared to tear this down, but also happy to extend it for a year and erect the next if you are not reasonable and accurate with your advertising claims. Let me know.”

Andrew Nicol and Ed McKnight paid for a large billboard overlooking the Propellor Property office.

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Andrew Nicol and Ed McKnight paid for a large billboard overlooking the Propellor Property office.

Connors says he found the email threatening, and a legal letter was sent warning that Propellor would drop its claim to be the “most ethical” real estate investment company, but asking the Opes couple to desist.

Things settled down for a while, but then a potential client shared some of Propellor’s projections with Opes, and Nicol and McKnight released an episode of their popular Property Academy Podcast, titled: “Propellor Property Investments: an honest review… Are its cashflow Are the projections accurate?

Andrew Nicol is a managing partner at real estate investment firm Opes Partners.

Supplied

Andrew Nicol is a managing partner at real estate investment firm Opes Partners.

This podcast prompted a second legal letter, alleging “significant factual errors” and defamation, noting that the figures Nicol and McKnight were criticizing were out of date and referred to the wrong property.

McKnight stands by his analysis, saying the legal letter does not address some of the key points criticized.

Opes Partners real estate economist Ed McKnight says he stands by his analysis.

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Opes Partners real estate economist Ed McKnight says he stands by his analysis.

Connors says he is working with his attorney on possible additional action.

Selling Sunset Makes Agent Excess Worse

Real estate competition has been exacerbated by programs like Selling Sunset, says Rawson, which have hyped up the profession and led to a glut of agents.

“It does create bursts of people.

“It attracts people with the wrong skills, the wrong expectations, who think they’re going to show up, look good and close the deals, but we all know there’s more to it than that.”

“By 2021, I would have interviewed nearly 100 agents new to the industry, and we accepted a small percentage of them who had work ethic expectations, rather than unrealistic expectations.”

Selling Sunset features glamorous real estate agents selling properties in Los Angeles.

Netflix

Selling Sunset features glamorous real estate agents selling properties in Los Angeles.

Moffat says there are “stark differences between what the show represents and the reality of working in real estate in New Zealand”.

“The fashion on the show is quite a bit, but in my experience of open houses, stiletto heels are unlikely to be welcome on some of the hardwood floors found in New Zealand homes.”

A bigger contributor to the agent boom was the overheated market of 2020 and 2021, when prices rose 42%, says Moffat.

Abigail Dougherty/Things

More than 5,000 people joined the real estate sales force during the recent boom. Now that the market seems to change, we spoke with two new agents to get their perspective.

Its main message to agents is not to allow market conditions to affect the expected standards of conduct.

“We oversee a grievance and discipline process that will hold accountable those who fail to meet those standards.”

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