Home seekers can expect the ranks of agents at some new launches to swell now that 400 or so salesmen from the Dennis Wee Group have signed agreements with PropNex Realty.
PropNex has the marketing rights to about 50 condominium projects so it is inevitable it will unleash some of its new agent signings onto the market. The agents are the first to start marketing PropNex's projects, following the firm's merger with Dennis Wee Group.
PropNex managers met about 500 Dennis Wee Group agents, roughly 50 per cent of the group's total strength, on Monday.
PropNex key executive officer Lim Yong Hock said that at least 400 of the agents have signed the associate agreement, which enables them to market projects PropNex represents. These include the Artra in Redhill and the upcoming Le Quest in Bukit Batok.
To hasten the transition, PropNex has arranged for a bulk transfer of the agents' Council for Estate Agencies (CEA) licences. This means the 1,007 Dennis Wee Group agents will be registered under PropNex in two to four weeks, instead of the usual six weeks. This would make PropNex Realty the largest property agency here, with 6,926 agents.
Other key real estate players expect similar consolidation moves as profit margins come under growing pressure in a challenging market. The number of real estate agencies has fallen from 1,369 in 2015 to 1,286 this year while there were 28,397 agents as at Jan 1, down from 30,830 two years ago, CEA data shows.
Mr Steven Tan, managing director of OrangeTee, which has 2,658 agents, said the merger will accelerate competition among key players and set a trend for more such moves: "I believe this is the beginning of the consolidation cycle. There will be more coming."
Property titan ERA is the biggest firm with 6,243 agents but that title is likely to fall to the expanded PropNex. However, ERA key executive officer Eugene Lim is unperturbed.
"In this business, the number of agents is important only to a certain extent," he said. "If you have 2,000 agents versus 6,000 agents, there is a significant difference in the volume of business. But after a certain size, say two agencies with 6,000 agents each, the impact on business volume is not significantly different."
ERA chief executive Jack Chua said it was focused on regional expansion and signed a franchise pact for Vietnam just a few days ago.
Real estate agents The Straits Times spoke to were taking the merger in their stride. Said Mr Raymond Quah, an associate president with Dennis Wee Group, who leads some 200 agents: "I'm definitely pleased about the merger as there are many new opportunities, such as project marketing."
Mr Aaron Wan, an associate director at ERA, said the merger was not a cause of concern, as he believes performance is down to the individual. "If I have a customer who has been with me for a long time, I don't think he will leave me if I change agencies. Customers don't change the way they look at you if you change agencies, they stick with you because they trust you."