Property agents exit in droves but…

Source : Straits Times - 6 Feb 2009

THOUSANDS of property agents have fled the industry over the past year amid the real estate slump but the tight job market here has forced new recruits to try their hand despite the lean pickings.

The number of people attending recruitment courses - anyone from housewives to sacked bankers have turned up - has leapt in recent months and property agencies believe the trend will continue.

But the loss of personnel has been dramatic, with industry experts estimating that around 8,000 to 10,000 have quit in the past 12 months, leaving about 18,000 to 20,000 active agents.

More are expected to drop out as the property market worsens but the extent of the fall is being offset by new recruits.

‘In the trough of the property cycle, the attrition rate is higher but the bulk of those who exit are ‘opportunist agents’ who came in during the peak,’ said Dr Tan Tee Khoon, head of KF Property Network, a Knight Frank subsidiary.

During the 2007 property boom, many people jumped into the market, hoping to make a quick buck as property agents.

Agencies were swamped with hopefuls from all corners of the economy, with new hires that included retirees, administrative staff, teachers, white- collar professionals and accountants.

Some property firms doubled their number of new hires from a year earlier.

‘It was the all-time peak when the market was at its crazy stage. We used to have 200 people joining our courses every month,’ said PropNex chief executive Mohd Ismail.

PropNex now has 4,000 active agents - defined as one who has closed at least one deal in the past year - after it terminated nearly 3,900 inactive agents over the past year.

Major agencies regularly axe agents who have not been active in 12 months.

ERA Asia-Pacific, with 2,500 active agents, had record recruitment in 2007.

‘We had 300 people on average a month (in training courses) but now we get 150 to 180 a month; back to normal,’ said associate director Eugene Lim.

While many more agents may drop out or be axed if they cannot seal deals, new ones will arrive.

‘This market is really challenging but there’s new blood…You don’t need an educational background to get in,’ said HSR Property Group executive director Eric Cheng. HSR has about 8,500 agents, with just over half who are active.

There is no fixed commission rate, though sellers may now pay 2 per cent, which works out to $10,000 for a $500,000 home.

The larger agencies - HSR, PropNex, ERA, Dennis Wee Group - all reported increased interest in recent recruitment drives and training courses which cost several hundred dollars.

A recent course attendee, who wanted to be known only as Kelvin, told The Straits Times: ‘I am in the manufacturing line. The market is pretty bad so I feel this is the right time to join the industry and learn so that I am ready when the market recovers.’

He did not want to give his surname as he is still in his full-time job.

‘As unemployment increases, we notice that more people are taking an interest in our free recruitment seminars,’ said Mr Lim.

‘We also have agents from other small companies joining us since a year ago. These are the five-man, 10-man shows.’

Mr Chris Koh, director of Dennis Wee Properties, said his recent training courses attracted housewives who were worried that their husbands may lose their jobs.

‘This time round, we are seeing a lot of people who are preparing for the worst. In the 1997 downturn, many who joined us had already been retrenched,’ said Mr Koh.

HSR’s Mr Cheng said several people who attended its course have not joined the industry. ‘Some people want a stand-by job in case they lose their jobs,’ he said.

C&H Realty managing director Albert Lu added: ‘During downturns, we usually see people who are retrenched come in and join us on a full-time basis.’

In recent days, he has recruited three agents. One was once a top performer at the agency who has made a comeback as his brother’s transport business has turned ‘very bad’.

The second agent was a small-time businessman in the construction field while the third was a retrenched banker.

C&H Realty has about 1,000 agents.

Agencies said the one good thing about a down cycle is the high chance of recruiting serious agents who will work hard and stay on in the industry.