Cooler Market Tests Their Staying Power

Source : The Straits Times, Apr 21, 2008

THEY flock in in droves during the property boom and slink out when the market is quiet. Months after the dramatic market upswing last year, the industry had an estimated 30,000 agents, at least double the number in 2005.

ERA assistant vice-president Eugene Lim

But these days, opportunists hoping to make a pile by signing up as property agents are getting scarcer, because the slump in the private home sales market is making it more difficult to close deals.

Property agencies say that the bumper recruitment figures experienced last year in the red-hot market have given way to fewer sign-ups but recruits with more staying power.

ERA Singapore, which grew by its fastest rate last year with 200 new recruits every month, signs up only about 180 new agents a month now. PropNex sees 140 new recruits each month, compared to about 200 a month last year. Smaller-scale Dennis Wee Properties takes in 60 recruits every month, down from about 100.

As agents do not clock office hours and draw no salary, few actually 'resign' when times are lean, unless they are joining another firm.

Many just return to their other jobs like sales or engineering while hanging on to their name cards as property agents so they can do the odd deal that may come along.

Big companies such as PropNex and ERA do routine 'clean up' operations by terminating the contracts of inactive agents if they do not seal a deal within a year.

ERA assistant vice-president Eugene Lim says that about 30 per cent of each batch of recruits have their contracts terminated this way. He adds: 'This is a very hands-on, practical job. Even if you are able to score As in a test, you may not be able to close any deals.'

PropNex says it terminates the contracts of about 70 agents every month.

According to the managing director of C&H Realty Albert Lu, the sector tends to attract professionals who are out of a job when the economy is down. These degree-holders flock back to salaried jobs the minute the economy picks up.

For many, it is still an occupation of last resort. Dennis Wee Properties director Chris Koh says: 'Do they aspire from young to be a real estate agent? I don't think so, maybe because the education system today teaches a child to study, pass his exams and get a job, not be an entrepreneur or his own boss.'

Things are slowly changing, though.

ERA's Mr Lim notices that his recruits are getting younger and more educated. They now range from 25 to 40 years of age. More hold polytechnic diplomas instead of O-level certificates.

He says: 'In this market, the people who sign up are more serious than those who come in a fast-paced market and who are attracted to it because of the short-term benefits.'