Singapore - More casualties in Singapore's real estate agency business have emerged during the latest licence-renewal period with the Council for Estate Agencies (CEA), but agency honchos are split in their views on whether the worst is over for the industry.
Many of the 30 largest agencies, which account for nearly eight in 10 of the more than 30,000 registered salespersons here, lost a significant number of their agents after the October-to-December CEA-licence renewal period. Of the 30 agencies, 22 have been left with fewer agents this month than last month; ECG property and HSR International Realtors shrank the most in percentage terms.
CEA's aggregated statistics on the number of agencies and salespersons will be released only later this month or in early February.
ERA Realty, with 5,947 agents as of Friday, and PropNex Realty, with 5,506, remain the two largest agencies, even after shedding 6.6 per cent and 8.9 per cent of their agent pools respectively. In Huttons Asia, a distant third, the number of agents fell below the 3,000 after 10.7 per cent of its agents dropped out of the firm.
Jack Chua, CEO of ERA Realty, said he expects a bottoming-out for the agency industry as volumes of resale and rental transactions in both the private and the HDB market had already turned a corner last year, compared to 2014.
"Our transactions have increased more than the broader market. For example, ERA's transaction in the private resale market rose 35 per cent last year, compared to the market's 20 per cent increase," he said. Things should look up this year, barring external shocks and a further deterioration of the economy, he added.
PropNex CEO Mohammed Ismail said his agents clocked more than 20 per cent in transactions and commissions last year than in 2014; he expects this pace of growth to continue this year.
Nearly half his agents were active last year. The agency defines its salespeople as "active" if they close at least six transactions in the year, he said.
Some firms grew their teams - OrangeTee.com, Onehome Property (started by former ECG Property agents in 2014), Real Centre International and Century 21 (Asia-Pacific) Realty (the former UPG International and part of the Century 21 franchise network) became larger.
Onehome Property key executive officer Arthur Zhang attributed the multi-fold jump in agent strength - from 20 last January to 197 this month - to the service support the company gives its agents through digital platforms, in-house telemarketing and a customer service team that liaises with landlords and tenants.
"We offer free-of-charge handyman services for all landlords and tenants who conduct their transaction through us. This helps all parties, as our agents are not inundated with maintenance-related issues, and landlords and tenants get quicker and easier access to maintenance and minor repair services," he said.
Steven Tan, managing director of OrangeTee, said his firm takes advantage of information and communication technology to get new agents on board, and retains its existing agents by investing in training and branding.
OrangeTee grew its agent pool by 5.3 per cent from December to 2,328 agents this month and expects its salespersons to run up 20 per cent more in terms of transactions and commissions than last year, he said.
Other agency honchos were more tempered in their expectations for this year.
KF Property Network managing director Tan Tee Khoon noted a gradual recovery in volume of transactions, but pointed out that the commissions that agents earn are still a function of price or rent - and these are still muted, given that more completed residential units are coming onstream.
Some 60 per cent of the firm's salespersons were active and earning around S$55,000 last year on average; those who left the firm clocked either few or no transactions last year, he said.
ECG Property and HSR International, which shed the biggest number of agents, saw their teams shrink by 30.8 per cent and 25.3 per cent month on month respectively, to 146 and 578 this month. Both stressed that it is not a numbers game.
HSR International chairman Patrick Liew said: "Like most agencies, there are many salespersons who are no longer active in the market. We decided not to focus on renewing them, but to focus on helping and serving the active agents."
The firm is operationally in the black now, after cumulative net losses of S$10.6 million over the past two financial years, he said.
ECG Property, where some agents are said to have hopped over to Onehomes, has undergone a restructuring to become a consultancy that also undertakes valuation, asset management and project management.
Managing director and CEO Eric Cheng said the firm is shooting for higher profit margin and productivity, now that at least 80 per cent of its agents are taking home at least S$25,000 in commissions.
Singapore has possibly one of the highest densities of agents, but according to the CEA, a third of these registered salespersons hold another job; of this lot, one third are inactive in estate agency work.
Ku Swee Yong, key executive officer of International Property Advisor and CEO of the Century 21 Singapore franchise, pointed out that while the pool of more than 30,000 salespersons appears huge - it is 10 times the number of monthly residential transactions - it should be noted that the total number of market transactions encompasses rental transactions for units and rooms, landed home sales, commercial transactions and the leasing of commercial, industrial and retail properties, which are not tracked.
He commented that the current external environment is unsupportive of agents looking to get out of the industry: "In the 2009 down-cycle, some agents could find jobs in tourism when integrated resorts came onstream, but now, there are not many options for them to move on to."
Referring to the on-demand private-car hire services, he added: "Grabcar and Uber have become welcome platforms to see these people through."
This article was first published on January 9, 2016.
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