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Property Agents

Property agents hit by weak market, new rules

A DOUBLE whammy of a weak market and recent restrictions on cold calls has hit the real estate industry hard, veterans say.

Posted on 24-Jan-2014
By: Melissa Tan

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Property agents hit by weak market, new rules

A DOUBLE whammy of a weak market and recent restrictions on cold calls has hit the real estate industry hard, veterans say.

Sales have plunged by as much as 60 per cent for some, they said. Real estate agents are also shelling out extra money to reach out to potential buyers as new regulations make it harder to tap prospects.

"I've been in this business for over 20 years and it's never been so challenging as right now," said ECG agency head Johnny Loy. He said his team's sales have tumbled "easily 50 to 60 per cent". ECG has about 230 agents.

It has not helped that a new Do-Not-Call (DNC) Registry, designed to protect consumers from unwanted marketing, came into effect this month. Agents have had to spend extra money to make sure they do not fall afoul of the new law while trying to reach out to more customers.

To cope with the new telemarketing rules, PropNex chief executive Mohamed Ismail forked out $80,000 to print 270,000 consumer guidebooks on different segments of the property market to be distributed free of charge.

"It's an outreach programme," he said. "You don't need to check the DNC list before you issue a guidebook."

PropNex, the largest agency in Singapore with around 5,300 agents, has also suffered a drop in revenue as fewer people are joining the industry. The agency earned about $600,000 in 2012 from training agents but the situation has now reversed.

It has begun offering courses for free and even set aside $1.5 million this year to subsidise training. "We want to motivate people to go out there and close small deals," Mr Ismail said.

Others have to think of more innovative ways to get the job done. One agent, Mr Kelvin Fong, has spent $150,000 of his own money to create a smartphone app that both agents and home buyers can download.

The aim is to help agents in his team "be more efficient" in contacting customers, he said, noting that monthly sales for his 2,100-strong team at PropNex fell by up to 25 per cent last year compared with 2012.

"The current market is reaching a stagnant stage. It's more difficult to close the deal."

One agent, who declined to be named, told The Straits Times he has not earned any commission in four months. "Despite serving several clients, I was not able to close any deal due to the many measures introduced last year."

The private property market has been hammered by several rounds of curbs in the past year. New home sales fell last month to 259 units, the lowest since January 2009, as uncertainty bit.

Consultants expect sales to pick up next month after Chinese New Year but said buyers could stay cautious owing to worries of an interest rate hike and an upcoming surge in supply.

Other agents said that they have begun to focus more on other areas apart from home sales.

"One way of getting around it is to focus on the rental market as a more immediate option," said DTZ agent John Ong.

Mr Loy said his firm has opted to shift its attention to overseas properties. "We're going for international cities. People still need to park their funds somewhere."

There were 31,783 agents registered with the Council for Estate Agencies as at Jan 1 this year, up from 31,040 as at Jan 1 last year.

But Chris International director Chris Koh estimated a "good half" of those work part-time or are inactive. "We don't see more than 15,000 agents advertising aggressively," he said.

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