More agents exit in 2014 as the job now offers less money
Singapore’s real estate market is seeing an exodus of property agents as recent statistics reveal that 4,032 agents left the industry after March 2012 due to increased marketing costs and less profits. Our compiled data show that the average number of salespersons employed by the city’s largest real estate agencies declined by 12% to 954. Moreover, half of the agencies on this year’s list of the largest real estate agencies in Singapore reported decreased employment. The result is consistent with CEA’s latest data on the total number of registered agents and our channel checks with property experts.
Citing data from CEA,SLP International Property Consultants executive director Nicholas Mak notes that although there were 5,245 new agents joining the industry from October 2010 to March 2012, the total number of agents after March 2012 only increased by 1,213. This means that 4,032 agents left the real estate industry after March 2012.
“This could be due to the poorer sentiments in the real estate market from 2013 onwards,” says Mak while noting that some of the property agents are making less money in 2014 compared to the boom period from 2H 2009 to 1H 2013.
“From mid-2013 to now, the transaction volume had fallen drastically, even though the price decline was fairly gradual. For example, in 2010, the total transactions volume in the private residential property market was about $63.2 billion. In 1H 2014, it was only $11.1 billion,” explains Mak. ERA Realty Network’s Division Director, Eric Tng concurs while adding that more agents, especially those ‘average’ ones which have less leads are discouraged by increased marketing costs. “It is taking a longer time to close a sale and more money has to be spent on advertising. I know of some resale or rental cases which the marketing costs reached 60% of the commission which typically should not exceed 30% in good times. For those salespersons doing new project sales, they will have to spend more time canvassing for a prospective buyer.”
According to Tng the top 10% in this business can easily receive $1 million or more commission annually but usually slow down after 3 - 5 years. For an average fulltime salesperson, Tng says that they should be making a 5-digit income monthly or else they are better off working as an employee.
Who made it to SBR’s list?
ERA Realty Network has once again topped Singapore Business Review’s second annual ranking of the largest real estate agencies in the city based on the number of real estate agents. The data obtained from the Council for Estate Agencies showed that ERA has a total of 5,911 agents as at September this year, up by 16%. ERA is closely followed by PropNex Realty with 5,685 salespeople, up by 16%.
The list ranked 30 agencies this year, a slight increase from last year’s 25. The new entrants are SLP Scotia, MORE Property, Vestor Realty, Knight Frank,and SLP International Property Consultants.
Most impressive among them is SLP Scotia which made its way to the top 10 with 679 agents. According to its website, the joint venture between Scotia Properties and SLP was established last year with only about 300 agents, and it is now on track to achieve its phase one growth target of 1000 agents by 2014.
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