In a sign of a tepid property market, 3,959 real estate salespersons (RES) chose not to renew their registration this year, compared to 3,382 who left last year. This is according to figures from the Council for Estate Agencies (CEA).
As at Jan 1, after the latest renewal exercise, there were 30,830 “registered salespersons” or property agents, down from 31,783 the year before. Of these, 3,006 were new entrants, down from 3,336 in 2014 and 4,567 in 2013.
The number of licensed estate agencies also fell this year to 1,369, from 1,425 the year before.
This further exodus of RES confirms the continued trend from 2012 of property agents leaving the industry amid shrinking commissions and higher marketing costs. Most property agents are currently earning less money compared to the market’s heydays from H2 2009 to H1 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 H1 2014, it was only $11.1 billion,” A senior property analyst had earlier commented.
Another reason for the exodus is the higher marketing costs. The longer time taken to close a sale means more money has to be spent on advertising.
For the RES who have chose to remain in the industry, many had to improvise and switch to other more lucrative segments such as the commercial and offices sector where ABSD (Additional Buyers Stamp Duty) and SSD (Sellers Stamp Duty) do not come into play. Many RES have also turned to the overseas market where capital outlay, yields and loan to value ratios are more attractive to local investors.
For some who are reluctant to give up their hard earned licenses, surviving now is the main priority and many have diversified into other businesses while awaiting the return of the market. Cooling measures are expected to be removed gradually from next year as the government look to meet the objective of increasing the population to the pre-announced target of 6.9m by Year 2030. Global economic tailwinds also mean the outlook of the property market is not as robust as before, meaning the measures that are meant to cool the once red hot property market are no longer needed.
Until then, it is expected that even more RES will leave the market this year.
The licences of property agencies and salespersons’ registrations in Singapore are renewed annually.