I think real estate commissions are so large they've become silly

I like the quote that’s attributed to Henry Ford - If I had asked people what they wanted, they would have said faster horses.

There’s no evidence Henry said it.  But, it’s all about his approach to innovation – that consumers often can’t imagine radical new solutions.

I was talking to a client today about share-broking.  Years ago, you had a sharebroker.  You rang them and they made a trade on your behalf.  I had a sharebroker.  I think they charged $70 per trade.  Now, everyone with a smart phone has low-cost access to share trading via a range of online platforms. 

My recollection is that real estate percentages are the same as 25 years ago – between 2.5%-3.5%.  And yet house prices aren’t the same.  Commissions have got so large they've become silly.  They're out of all proportion for the work involved. 

Average Queenstown house price	Average Queenstown house price	Agent commission at 3% plus 15% GST
2000	$203,000	$7,000
2010	$524,000	$18,000
2025	$1,630,000	$56,235

Motor cars must have been scary for the first drivers.  I understand selling a house using Weka seems like a radical new thing. 

But it’s not.  We use the same processes, same advertising, same skills.  We’re just a lot more cost effective because we believe things have changed in 25 years.