Property agents feeling the pinch as market cools

Buying interest close to period following 2008 financial crash, they say

IT MIGHT be a property buyer's market now that prices in the fourth quarter last year have finally dipped after several years but it is about as grim as it gets for property agents.

Buying interest is down to levels not seen since the months following the 2008 global market crash although prices have held up better this time around.

Agents are more concerned with transaction volumes than sale prices as it is high turnover that generates commissions and in this regard, pickings are lean.

Only 565 new private homes were sold in January while 724 units were shifted last month.

There were also only 242 resales in the private home market last month, down 18.5 per cent from January, according to the Singapore Real Estate Exchange.

These anaemic numbers are all unwelcome reminders of the financial meltdown.

In the first two months of 2008, only 494 new units were sold although activity picked up in 2009, with 108 new sales in January and 1,332 in February of that year.

The feeble sales this year point to just how hard and fast the slide has set in. New sales averaged around 1,000 a month in 2012 while there were 22,197 transactions overall, including resales, that year - a far cry from the 14,948 units sold last year.

Propnex chief executive Mohamed Ismail said he expects transaction numbers to stay low, at least until the end of this year.

Agents hope it will not mirror 2008 when only 4,264 units - new and resale - were sold in the private home market.

Buyers are the winners with a wealth of options - RiverTrees Residences, Riverbank@Fernvale, The Ascent, Cluny Park Residences and The Panorama all launched this year - at prices that are open to negotiation.

Several agents told The Straits Times that they are finding it far harder to close a deal now than in the past few years when property virtually sold itself.

An agent, who wanted to be known only as Mr Ng, said: "The buyers know that they have more choices now, and they're using this to their advantage to take their pick." He has been working at a showflat for the last month and has yet to close a deal.

Another agent, who wanted to be only known as Mr E. Tan, said he used to close around three deals a month in 2012 but has not finalised a single purchase in nearly two months.

An agent, who gave his name only as Mr Zhang, said: "There are too many choices... For buyers who are purchasing for themselves, they will still buy, but for investors, they are choosing to wait and hunt for better deals."

Nurse Denise Thia, 36, who visited two show flats in Sengkang earlier this month, said: "We're looking at buying a new unit for investment. There's definitely more choice for us now."

The Straits Times visited the showflats of recently launched projects over two recent weekends to see how grim things were.

Agents often outnumbered viewers at showflats. In one case, there were at least 15 agents in attendance but only two families turned up over one hour.

At another, 20 agents stood around with only a family of five at the showflat in over an hour.

Mr Ng said he has encountered buyers who want multiple viewings at showflats without real intentions to commit.

Another agent, Ms Loh, said: "Agents don't have a stable income even in good markets and now, it's even worse for us."

Dennis Wee Group president Lionel Ng said increased loan restrictions and the wide range of choices for buyers are discouraging transactions. "Buyers are also starting to look at properties overseas as they are not as restricted in terms of loans," he added.

Mr Lionel Ng, who has been in the property game for 18 years, said the market is the worst he has seen, even compared with the 2008 financial crisis.

"(Then), agents weren't so affected as people were still selling properties. Agents are only affected by the number of transactions, so even then we were doing rather well compared with now."

Said Mr Ismail: "Transactions have fallen around 30 per cent to 40 per cent since 2012 across both private property and the HDB markets. Buyers are taking advantage."

This story was first published in The Straits Times on March 31, 2014