Agent fees between states - why do they differ?

I get that the difference in population and level of competition between cities / states may alter rates (basic supply and demand, i.e. small country town with only one agent vs. a big city), but I'm struggling to understand why there's such a big difference in RE fees between two large cities, like Brisbane and Sydney for example.

I assume it's more than basic competition and it's more than just the nexus between supply and demand. Is there some sort of huge structural difference I'm unaware of? Maybe they pay more govt. fees, higher liability insurance costs, or perhaps LJ Hooker or one of the agents have a monopoly in certain states?

It seems to me if you hunt around you can get rates around 4-5% in Sydney whereas Brisbane they're hovering around 8-10% on average. I'm having trouble trying to reconcile such a large difference. If there's no structural difference, it seems to me there's an opportunity for agents to swoop in and take half the market with more competitive rates.
 
The same reason mens and womens haircuts are priced differently, or why iTunes has different pricing in Australia to the US. Different markets will tolerate different pricing.
 
price is set based on what the market will tolerate. While cost and return come into it long term typically when assessing the business you look at cost and sell independently to see if it is viable.

Unfortunately I don't have a helpful answer on how to get around it, although perhaps if you could someone contact a few owners in the area you might be able to try and negotiate a rate with an existing or near by agent to bring it down.
 
thats why im stumped as to why one of my areas of investment charges 9.9% inc gst, and so does everyone else, and why someone doesnt bring out a service thats 1-3% lower , theyd make a killing

and before someone says, rent, wages, more work, its pretty much the same as every other state,
 
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