The Credit Thesis · Part 7

Sales are falling. Your rent roll isn’t.

John King, B Bus (Acc) FIPA · 6 October 2026

An agency has two income lines. Right now they are moving in opposite directions.

Nerida Conisbee, Chief Economist at Ray White, set out the numbers on 5 October. Across the combined capitals, dwelling values fell 4.3 per cent over the September quarter. Rents are still 5.5 per cent higher than a year ago.

She dates the split to around the May Budget. Values turned down. Rents kept rising.

For most of the market, that’s a housing story. For a principal, it’s a P&L story.

The sales line

Commission is a percentage of the sale price. When values fall, every sale pays less.

Nerida also notes investor activity has weakened since the Budget, and that the pressure is landing on the more affordable end of the established market. That’s where a lot of boutique agencies do their volume.

Lower prices and fewer investor buyers hit the same line twice.

The rent roll

Management fees are a percentage of rent. Rents are up 5.5 per cent on the year, so the fee per property is up with them.

Supply isn’t easing either. Nerida points out that fewer investors means fewer rentals being added, in a market that was already tight. Trend dwelling approvals were 18,202 in August, below the roughly 20,000 a month the national housing target needs. New dwelling costs are up around 48 per cent since the end of 2019 and still rising, so fewer projects stack up.

Her conclusion is that today’s price falls make tomorrow’s shortage worse.

For a rent roll, that means rents with support underneath them.

This is consistent with where this series has landed since Part 1. The constraint is credit and serviceability, not sentiment. Higher rates are pushing established prices down. They are not making rentals easier to find.

The catch

The fee per door is rising. The number of doors is not guaranteed.

The same investor retreat that supports rents also means some landlords will sell. Every landlord who sells and isn’t replaced takes a door off the roll.

So the rent roll is the stronger line right now. It’s also the one to defend.

What I’d do this quarter

1. Split your income every month. Know what share of revenue is sales and what share is management. Most principals know their sales number to the dollar and their rent roll income roughly.
2. Forecast cash on a lower sales assumption. Plan the next two quarters as if commission per sale stays down. If it recovers, that’s upside.
3. Look after the landlords most likely to sell. Investors reviewing their position after the Budget are the doors at risk. Contact them before they list with someone else.
4. Don’t let PM capacity slip. If the rent roll is carrying the business, the team running it has to keep up. Inspections are usually the first thing to fall behind, and landlords notice.

The takeaway

Falling prices don’t mean a falling agency.

The principals who come through this well will be the ones who see the split early, plan cash around the weaker line, and protect the stronger one.

With thanks to Nerida Conisbee, Chief Economist at Ray White, whose analysis of the post-Budget market this piece draws on.

General information only. It does not take account of your objectives, financial situation or needs.