Thursday, December 9, 2010
Industry Churns, Real Estate Agents Jump Ship
SINGAPORE) Property firms here are jostling for the best agents as enforcement by new regulatory body the Council for Estate Agencies (CEA) kicks in.
Under new rules, agents can only work with one real estate firm. This means that those who formerly represented multiple firms now have to pick just one.
This has led to an industry shake-up here, with agents being drawn to firms with a track record of high-profile residential launches that help them earn more in commissions.
Over the past few months, the number of residential brokers at firms including Savills Singapore and Huttons Real Estate Group has climbed swiftly.
Other firms, including Knight Frank, PropNex and ERA, have seen falls in headcount numbers as agents either left to work for competitors or exited the business entirely, put off by more stringent regulations.
At Savills, the residential team has grown from about 35 people two months ago to around 550 brokers now. The group's South-east Asia chief executive Chris Marriott is expanding his team to take advantage of market opportunities.
'There are a large number of projects coming through, both in terms of new launches as well as completions (when projects receive their Temporary Occupation Permit),' he said.
The beefed-up sales team will focus on marketing properties in Singapore's prime districts and handle new launches, sub-sales and re-sales.
Savills' new agents are all experienced, Mr Marriott stressed. According to sources, a significant number of Savills' new agents used to work for Knight Frank.
Huttons is also hiring aggressively. The firm, which was formed in 2002, has grown from a small team of associates to more than 2,000 consultants now. And it is still looking to hire, sources said.
In fact, Huttons' success has even led to a spin-off unit. Last year, a group of its agents left to set up a new firm, Black Diamond Real Estate Group. Black Diamond has since grown from about 100 agents to 300.
Other property firms muscling in on established firms' turf include ECG Property. The firm, which was set up last year, has more than 1,000 agents.
Firms that have seen a fall in headcount admit that some of their ex-agents have left to join competitors. Also, some inactive and inexperienced agents have chosen to leave the industry, they said.
ERA, for example, registered some 4,800 salespeople with CEA during a recent registration exercise. This is a drop from the 5,800 agents the firm had at the beginning of the year. But ERA Asia-Pacific associate director Eugene Lim said that before the registration exercise, just 3,800 of the sales team were 'performing agents'.
PropNex has around 4,500 agents now, down from 6,000 at the beginning to the year. And over at Knight Frank, the number of property agents tumbled from 1,250 at the beginning of the year to just under 700 now.
Danny Yeo, group managing director of Knight Frank, said that most of the agents who have left were inactive.
'Some of our agents shifted around to other agencies, but we have also taken some from other firms,' Mr Yeo said. 'The bulk of the agents who left had low trading volumes and were inactive.'
Explained CB Richard Ellis (CBRE) executive director for residential Joseph Tan: 'The recruitment drive is now focused on hiring experienced agents. There is some movement across agencies. We are very selective in hiring as we operate on a slightly different business model.'
The number of agents at CBRE has dipped by less than 10 per cent, he said.
The industry shake-up has also hit some of the smaller property firms in Singapore, such as Sotheby's International Realty.
Sources said that the owner of the US-based luxury property firm's Singapore franchise is looking to sell the franchise. According to the sources, the value of deals handled by the firm has fallen since the 2007 property boom, when the brand was first introduced to Singapore. Some of Sotheby's agents have also left.
Property firms here submitted a list of about 32,800 existing salespeople who satisfied all CEA requirements at the Oct 22 cut-off date.
And over the past month, the firms have also submitted applications for licences to operate and registration forms for their agents. But the total number of firms and agents is not available yet, as CEA is still processing the applications. Previous estimates put the number of property firms and agents at 1,700 and 30,000 respectively.