More property agents may head for exit

July 25, 2008
More property agents may head for exit
PropNex's sacking of 2,800 inactive associates seen as bold, drastic
By UMA SHANKARI

(SINGAPORE) Many more property agents could quit the industry - or be
forced to leave - in light of the current market downturn, say
industry players.

'The market was very bullish in the last two years, so the barriers
to entry were not there for a lot of agents,' said Cushman &
Wakefield managing director Donald Han. 'Now that the market is
tightening, property companies want to look for the performers, and
let the rest go.'

On Wednesday, PropNex Realty said that it was firing more than one-
third of its agents. About 2,800 agents who have been with the firm
for over a year but have yet to record a single transaction will be
terminated, PropNex said.

Industry players told BT that during the property upturn in the last
two years, a number of 'non-typical' agents entered the industry in
order to make a quick buck. One property analyst told BT that at the
height of the property boom, he had 'civil servants, clerical staff
and others with regular day jobs' looking to join his firm to 'make
some extra cash'.

'There were a lot of fly-by-night agents - people who didn't know the
rules,' he said.

But with the current property slowdown, many of these agents have
been unable to close deals and therefore have left the industry,
market players said. More could follow, they added.

PropNex said that many of its inactive associates may no longer be
familiar with current market trends or the latest policies. 'If that
is the case, then they would hardly be able to best serve the
customers' interests,' said chief executive Mohd Ismail.

The agents were first given a choice to remain with PropNex by
signing up for Professional Indemnity Insurance and a refresher
course.

Observers called PropNex's move 'bold' and even 'drastic'. The
industry here is largely unregulated and there is sometimes confusion
over agents' qualifications and accreditation.

Industry veterans, however, pointed out that some of the agents fired
by PropNex could be registered with multiple agencies and so could
have recorded transactions for other firms instead. There is also
nothing preventing fired agents from joining another agency, they
added.

What the industry needs is more education, said Ku Swee Yong,
director of marketing and business development at Savills
Singapore. 'If they (the fired agents) are serious about the
industry, they should take advantage of the now relatively stable
market to upgrade themselves and deepen their knowledge,' he said.