Commercial vs Residential Real Estate: Which is Right for Your Career Start?

Ever noticed how people's eyes light up when you mention real estate? The idea of turning a rundown house into a hot-ticket listing or sealing a deal on a big office block feels like striking gold. But just as quickly as the dream shows up, you hit the first fork in the road: should you start out in commercial or residential real estate? It's not just a toss-up, either. Where you begin can change your entire career path and maybe even your life.

The Core Differences: What’s at Stake?

The gap between commercial and residential real estate isn’t some subtle line. These are actually two worlds with their own customers, rhythms, challenges, and rewards. 

Residential real estate’s all about people looking for homes. It's apartments, bungalows, townhouses—places people want to live or invest in for rent. You’re mostly dealing with families, young couples, retirees, or investors who want to get in on rising neighborhoods. There’s a lot of emotion tied up here, too. People aren’t just buying walls and floors; they’re buying a future, maybe raising kids, making memories. Conversations during open homes often reveal more about a buyer than any lending document ever could. 

Commercial real estate? Whole different beast. This world runs on numbers, risk mitigation, lease terms, and strict financial logic. It’s all about offices, warehouses, industrial parks, shops, and hotels. Your clients are businesses: think franchise owners, corporate managers, or investors looking to secure massive returns. There’s less sentiment but much bigger sums on the line. 

If you dig deep into Wellington’s property scene, you’ll find residential sales are everywhere—every suburb, every year. Commercial is a smaller pond, but the fish are much bigger. Don’t let the statistics fool you: the Real Estate Institute of New Zealand shows residential deals are around ten times more frequent than commercial ones. But individual deals in commercial property often dwarf anything you’ll see in a standard home sale.

How does that change daily life? In residential, you hustle nights and weekends, lining up viewings and negotiating every last paint color with clients. In commercial, your phone might not buzz as often, but every call can mean millions of dollars. There’s usually less hand-holding, but cold-blooded number crunching is essential.

Both paths require people skills, sales grit, and a taste for paperwork. Still, if you’re a natural at putting people at ease, residential can feel like second nature. If you get a thrill from negotiating seven-figure leases with big-league clients? Commercial is calling your name.

Earnings and Career Growth: Show Me The Money

Let’s cut through the suspense: everyone wants to know about income. On residential deals, agents tend to get paid faster and more often. There are simply more transactions in every New Zealand city. An entry-level residential agent, for example, might close 8-12 homes in their first year if they really hustle. Commissions usually range from 2% to 4% of a property’s sale price. On a $900k Wellington home—totally normal these days—an agent’s commission can clock in between $18,000 and $36,000 per sale before any agency split. That’s motivating, right?

Commercial deals pay out higher commissions per transaction, but you’ll probably do just a handful of deals each year at first. Think long deals—sometimes 6-12 months to close. Commercial commissions might be around 1% to 3% on a property that could be anywhere from $2 million to $20 million (a fully leased office building isn’t cheap). Crack just one $5 million deal, and you’re looking at a $50k take-home before agency splits, possibly even more if the terms are sweet.

The catch? You really need stamina in commercial while deals linger. Some agents survive their first year with savings or side gigs. But stick with it, and your deal value (and Rolodex) can expand fast. A veteran commercial agent with the right network might be sitting on yearly incomes that easily beat the average CEO.

Career mobility is a two-way street in both fields. Residential agents can develop specialty niches—luxury homes, new builds, short lets. Some start agencies. Jumping into commercial later isn’t impossible, but you’ll need to bring your business game. In commercial, the learning curve is steep but there’s a clear path up: bigger deals, regional projects, property management, even advisory roles for international companies. 

Pros and Cons: What No One Tells You

Residential agents enjoy direct client contact. If you’re a social butterfly, there’s nothing more rewarding than matching people to the right home. Typical weeks are packed with open homes, calls, texts, paperwork, and last-minute contract changes—all of which can get a bit exhausting. The flip side: your performance is easy to track with quick feedback. Sell a property, get paid. Fail to win listings or close deals, and you’ll know it in your bank account pretty soon.

Some headaches? Emotional clients. High competition. Lots of weekend and after-hours work. Residential markets are also highly sensitive to changes in interest rates, lending rules, or government regulations. Remember 2021’s price spike? Just as quickly, the market can freeze up. You better have backup plans when interest rates jump two points overnight.

Commercial real estate leans heavily on business relationships and market knowledge. Success is about building trust with decision makers—the GM of a logistics firm or the board of a retail chain. Deals can take time to mature, which tests your patience. You also face much stricter legal requirements and more complicated contracts. Lease terms? Rent reviews? Zoning battles? They come with the territory.

If you like independence, both paths deliver some flexibility. Residential agents might spend mornings at a café writing listings and afternoons staging homes. Commercial agents have more "desk time"—analysing markets, prepping proposals, studying comps—but a lot less pressure on weekends. Oddly enough, you might work fewer nights in commercial, but you’ll be glued to email during business hours.

The biggest pitfall in commercial is the "feast or famine" rhythm. Some quarters you’re cashing huge checks; others, you’re just grinding. The reward, though, is an unmatched potential to carve a niche in a high-stakes field. It’s perfect if you can handle the long game. Plus, thanks to New Zealand's tightly regulated property laws, both paths have solid long-term security compared to many other industries.

Tips to Decide: What Fits Your Style?

Here’s where things get personal. Your decision should line up with your personality, goals, and appetite for risk. It’s worth asking yourself some sharp questions:

• Do you feed off quick wins and regular positive feedback? Residential can deliver this in droves. 
• Are you okay working weekends and evenings? A residential agent’s schedule isn’t always friendly to family dinners or Saturday rugby matches.
• Do you love crunching numbers, reading market reports, and negotiating with people who rarely show their cards? Commercial is where those skills shine. 
• Is a higher but less regular payday worth it? If so, commercial can be king—but you'll need the patience to survive the wait.
• Are you new to sales or people-centric roles? Residential tends to be more accessible for beginners. If you already have experience in business, finance, or law, commercial offers a smoother ramp-up.

Don’t ignore your local market either. Wellington’s office leasing market boomed post-COVID, but the central city’s retail property scene took longer to bounce back. Up in Auckland, residential agents still scored record commissions after median home prices topped $1 million in 2024, despite tighter lending. Rural areas? Bare land sells better for developers, while small-town commercial might be a slow burn.

Here’s a pro-tip that never gets old: talk to working agents in both sectors. Ask them about their toughest days, their best windfalls, their long slogs. Local Facebook groups, property meetups, or even LinkedIn can help you scope out the reality on the ground. More often than not, you’ll hear straight talk—the sort you won’t get in sales pitchy training sessions. And if you’re still stuck, try shadowing someone for a few weeks. The day-to-day reality will soon tell you where you belong.

Understanding Market Trends: Timing Your Move

Getting into real estate isn’t just about your skills—it’s also about timing. Around New Zealand, market cycles cause big swings in both residential and commercial sides. For example, after 2020, residential markets went into hyperdrive thanks to low interest rates, with Wellington and Auckland prices blazing past previous records. By 2024, things started levelling off, with tighter lending and a subtle market cool-down—though values still sat much higher than pre-pandemic.

Commercial property tells another story. During lockdowns, high-street retail took a hit, but industrial and logistics warehouses skyrocketed, thanks to the online shopping boom. Now, in 2025, office leasing markets in central Wellington and Auckland have mostly stabilized, but hybrid work is reshaping the square meter rates and lease lengths. Good commercial agents spot these shifts and pivot—focusing on logistics hubs, for instance, when CBD demand dips.

Demographics play a role, too. As New Zealand’s population ages, demand for certain residential property types—like retirement villages or low-maintenance townhouses—keeps ticking up. Meanwhile, city expansions and new infrastructure projects create fresh commercial opportunities. It’s not uncommon for a block rezoned for mixed-use to be snapped up quickly as both a residential and commercial play.

One more stat: as of late 2024, the national vacancy rate for industrial property hit a two-decade low, just under 1.8%. That means strong competition for tenants and plenty of deals, especially in gateway cities. Compare that to prime residential listings in central Wellington, where days-on-market steadily rose through early 2025, thanks to buyers becoming more picky.

So why does all this matter for your career? Catching the right wave means riding strong demand, bigger commissions, and a smoother ride up the ranks. Stay flexible, keep your research up, and remember that market cycles don’t last forever. Being in the right place at the right time doesn’t just help your wallet, it also makes your job more fun.