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4,000 property agents drop out, over 50 agencies throw in towel

But dismal sales have not deterred the 3,000 new agents who joined industry in Jan
Friday, January 23, 2015 - 05:50
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Buffeted by sagging property sales, close to 4,000 real estate agents have dropped out of the industry while over 50 agencies have closed shop over the past year.

Singapore

BUFFETED by sagging property sales, close to 4,000 real estate agents have dropped out of the industry while over 50 agencies have closed shop over the past year. INFOGRAPHIC: Number of registered property agents

But this has not deterred some 3,006 new entrants from becoming property agents, according to the latest data from the Council for Estate Agencies (CEA).

CEA said on Thursday that it has licensed 1,369 agencies and registered 30,830 salespersons as at Jan 1 this year. This marks a fall from 1,425 licensed estate agents and 31,783 registered salespersons in the previous year's renewal exercise. Some 3,959 salespersons did not renew their registration.

Renewal of licences for agencies and agents usually takes place at the start of the year - there are still some applications pending CEA approval.

With the latest renewals, the top 10 realties here have found that they have lost some agents from end-2014. ERA Realty and PropNex remain the largest agencies with 5,707 and 5,358 agents respectively as at Jan 1.

PropNex chief executive Mohamed Ismail noted that the lacklustre market has become "a purging system of the fittest agencies and efficient agents".

But it is not all doom for those who exit in bad times. Given how overall sales volumes have dropped by some 30-40 per cent, they may be better off in a job with stable income, Mr Ismail said.

For PropNex, its number of agents has fallen by 9 per cent to 5,358 as at Jan 1 from end-2014 but it is a 4 per cent increase from a year ago. This number has since risen to 5,427 currently.

Mr Ismail noted that when sales are poor, some agents find having to make regular CPF contributions and forking out money for professional indemnity insurance and Continuing Professional Development courses deterrents to renewing their CEA licences.

According to ERA Realty chief executive Jack Chua, with the smaller agencies closing shop, their agents have joined the bigger firms. This, he said, are among the reasons why ERA's sales force grew close to 10 per cent from a year ago. But it is a 7 per cent drop compared to end-2014, just before the licence renewal exercise.

Both PropNex and ERA's numbers were boosted with the transfer of over 50 agents each from JLL Singapore over the course of last year, after the latter took a 20 per cent stake in PropNex International, the project marketing arm of PropNex, last August.

Among the top 10 agencies, HSR International Realtors saw a 17.8 per cent net drop-out of agents upon licence renewal to 1,056 as at Jan 1, despite earlier hopes by its management that a new commission scheme it implemented last year allowing agents to earn higher commissions could mitigate a contraction of its sales force.

But HSR chief executive Anne Tong told BT that the number of agents is just one part of the story. "For the first two weeks of the year alone, we have seen a transaction increase of 15 per cent year on year as compared with the same period last year," she said. "Since the launch of the scheme, about 200 new and experienced salespersons have joined us. These are active and producing salespersons."

To help its property agents improve sales, ERA's Mr Chua said the agency has beefed up its marketing and market knowledge training for agents and rolled out mobile apps that allow agents to identify units available for sale quickly so that they can bring their customers to view those units.

Tan Tee Khoon, executive director of residential services at Knight Frank, noted that the start of each year marks a game of musical chairs as some salespersons transfer from one agency to another.

"There is also a salesperson attrition rate of approximately 10-15 per cent after each registration renewal exercise," he said. The number of agents at Knight Frank slipped to 884 as at Jan 1, 2015, down from 933 as at end-2014 and 970 agents at the start of 2014.

Knight Frank is focused on seeking out "career salespersons" who are out to make a living in real estate as a career, he added. Being a full suite consultancy and agency services firm also translates to "a diverse basket of sales and leasing opportunities available to our salespersons", he said.