Property management income rises to 42% of estate agent income: Macquarie

Estate agents are becoming more reliant on their rent rolls, with property management income rising from 36% to 42% of total income in the past year, according to the 2012 Macquarie Residential Real Estate Benchmarking Report.

The results are based on a survey of 416 real estate firms across the five mainland states conducted in February this year.

When Macquarie carried out the same survey in 2007, estate agents reported that property management accounted for just 29% of income.

The survey respondents expect property management to rise to 43% of estate agents income in the future.

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Macquarie said the tough sales environment contributed to the the increase in property management income, but was not the sole reason.

“We believe there has also been a deliberate shift as agencies across an increasingly broad scope adopt and resource growth strategies (either organically or via acquisition) within their property management business,” says the investment bank.

“The outlook from agencies completing the survey suggests this trend will continue in the future."

“The recurring, contracted nature of property management income has proved itself somewhat resilient to tight economic periods and subsequently makes it an increasingly attractive source of revenue in the tough sales environment."

“With only 30% of agencies anticipating growth of any nature in the residential housing market within the next 12 months, it would follow that agencies target rent roll growth as a means to increase revenue.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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