Why million dollar agents are ‘broke’ in Australia as early homebuyers struggle with interest rates

A veteran realtor and entrepreneur has slammed high-profile “million-dollar realtors” for complaining about being broke as first-time homebuyers face an increasingly uphill battle to break into the housing market.

Podcaster and author Tom Panos, who runs Real Estate Gym, said in a video shared this week that real estate agents who rake in $1 million in commissions annually are wasting their money on extravagance.

“You want to rent a nice luxury apartment and you want a nice Maserati that rents $4,000 a month,” Mr. Panos said.

“They eat at flash restaurants three or four times a week and fly business class, now travel is allowed.”

“The reason you’re broke is because you have a little d***,” he said.

Author and podcaster Tom Panos (pictured), who runs Real Estate Gym and is an industry veteran, said “million-dollar agents” waste their money trying to look flashy

Mr. Panos said a million dollars doesn’t go as far as many would expect and that smarter real estate agents are more frugal and don’t try to appear flashy.

“When you write a million dollars (in commissions), you give your office a percentage,” he explained.

“Let’s say 40 percent, then 60 percent remains, which is $600,000.

“You probably have two employees working for you, that’s $75,000 each, and you have $450,000 left over.

“And you haven’t even started (paying the bills). You had nothing to drink or eat.’

However, Mr Panos said real estate agents are still confident because they have earned so much in commissions and would throw money around until suddenly the money is gone.

He advised agents to think about what’s “left over” when everything is paid for, not the “revenue” they’ve made.

Mr Panos said savvy real estate agents wouldn’t pay $4,000 a month for a Maserati lease or a business class flight

But while realtors continue to rake in exorbitant commissions, the real estate market for first-time home buyers remains and only gets tougher.

This week, the RBA hiked interest rates again, pushing monthly mortgage costs to near-unaffordable levels.

Borrowers and those looking to get into the housing market have been hit by a ninth straight rate hike.

The 25 basis point rise to 3.35 percent is not the last as the bank’s board adds that further rate hikes are needed in the coming months to bring inflation back on target.

Inflation is at 7.8 percent – the highest since 1990 – and the central bank is aiming to bring it back to within a 2-3 percent range.

“High inflation makes life difficult for people and harms the functioning of the economy,” the RBA said in its statement on Tuesday.

“And if high inflation became entrenched in people’s expectations, it would be very costly to reduce later on.

“The board is trying to bring inflation back into the 2% to 3% range while keeping the economy on a stable path, but the path to a soft landing remains narrow.”

While real estate agents enjoy huge commissions thanks to high house prices, those looking to enter the real estate market are faced with ever-increasing mortgage bills

RateCity says the increase will mean an additional $908 a month in repayments for the average borrower on a $500,000 loan since the RBA began raising interest rates in May.

For a $750,000 loan, the recent rate hike means an additional $114 per month, or $1,362 since the hike cycles began.

The cash rate is at its highest level since September 2012.

Treasurer Jim Chalmers acknowledged that the rate hikes that started in May – ahead of the last general election – have put additional pressure on Australians and the economy.

“It is our job to focus on the broader pressure that is coming our way from around the world and that is being felt at this country’s kitchen tables,” he told parliament.