Stagnating property market hits close to home for agents

Private property prices fell 3 per cent last year while Housing Board resale prices were down 0.1 per cent.
Private property prices fell 3 per cent last year while Housing Board resale prices were down 0.1 per cent.PHOTO: ST FILE

3,200 let their registration lapse last year as 3-year slide continues

After five years as a property agent, Mr Rylan Peh, 32, called it quits last month.

He was not the only one to do so.

In an industry battling stagnant demand and a new do-it-yourself culture, 3,200 agents let their registration lapse last year, according to figures from the Council for Estate Agencies (CEA) yesterday.

This brings the number of registered property agents in Singapore to 28,397 as at Jan 1, continuing a three-year slide as housing prices and transaction numbers fall. It is down from the 31,783, 30,830 and 29,262 agents at the start of 2014, 2015 and 2016 respectively.

Said Mr Peh, now a part-time management associate at a logistics firm: "In my heyday in 2011 and 2012, I could earn $10,000 a month, which was not even the highest among the agents. But things started to slow down in 2013. I have no choice but to move on."

The industry is contending with both short- and long-term forces.

Most immediately, a sluggish economy has dulled buyers' appetite. Private property prices fell 3 per cent last year while Housing Board resale prices were down 0.1 per cent. Transaction volumes are also expected to remain modest.

CEA's director for policy and licensing Heng Whoo Kiat said the trend of fewer agents points to a "slight consolidation of the industry, given the current property market sentiments".

Government efforts to lift industry standards have also had an impact. Fewer new agents entered the market last year: 1,189, compared to 1,299 in 2015 and 3,006 in 2014.

ERA Realty key executive officer Eugene Lim attributed this partly to higher entry barriers.

For example, the mandatory Real Estate Salesperson test administered by the CEA is now conducted every four months, instead of every alternate month as was the case when it was introduced in 2011.

"I've also heard that it is harder; I think the CEA is trying to raise the standard of the industry," said Mr Lim. The statutory board did not reply to queries on this.

In the long run, the industry is also beset by the same disruptive forces that are upending many others.

Mr Heng noted that "technological innovations, consumers' lifestyles and preferences in handling their property transactions are changing".

For instance, more buyers are cutting out the middlemen, said Mr Lim, pointing to the abundance of information available on property portals and government websites.

He said: "If you're an agent specialising in serving buyers or renters, you might want to change business direction soon."

Some observers are more sanguine, saying the industry is shedding part-timers while building a core group of "career" agents.

Knight Frank managing director Tan Tee Khoon said his company, which hires only full-timers, experienced a 10 per cent growth - from 621 agents at the start of last year to 683 now.

Said Dr Tan of the jump: "We focus on hiring career salespersons - agents who want to eke out a living in real estate."

One agent who is in it for the long run is Mr Eddie Ng, 39, who marks his seventh year in the business this year.

"It has been a difficult few years but, at the end of the day, if you know how to keep your customers, they will eventually come back or refer you to their friends," he said.

A version of this article appeared in the print edition of The Straits Times on January 11, 2017, with the headline 'Stagnating property market hits close to home for agents'. Print Edition | Subscribe