Industry watchers said smaller real estate agencies in Singapore may consolidate when new rules to regulate property agents kick in later this year.
Agencies are also concerned about recruitment and compliance costs.
The government is due to set up the Council of Estate Agencies to regulate property agents.
The upcoming regulations seek to weed out rouge agents, and raise professional standards and accountability.
Real estate agencies are also expected have systems to handle complaints and resolve disputes.
“For bigger companies, most of these systems are in place, so there’s minimum add-on cost. For the smaller companies, they would probably (face some) difficulties… So I would envisage that probably in the future, most of them may come together to combine resources,” said Eugene Lim, associate director of ERA Asia Pacific.
More smaller agencies may also join forces with the big players.
Propnex said over 10 companies have come under its wing in the last 5 years.
Depending on their experience, staff from these companies can either become a district director or a branch director.
The Institute of Estate Agents said out of the 1,700 licensed agencies in Singapore, over 90 per cent have under 100 agents or are not operational.
These include those who are issued with an agency licence but have decided to work for another real estate firm or not in the property industry at all
Meanwhile, the Dennis Wee Group is re-working its training programmes and might consider increasing fees.
Currently, an agent pays about S$700 for 44 hours of basic training at Dennis Wee Group.
“We are exploring how to create a modular training for these new agents so that when they come in, one module will be for them to prepare for their exams, another module will possibly be on sales techniques,” said Chris Koh, director of Dennis Wee Group.
The new rules will also affect recruitment by agencies.
Job seekers without at least 4 GCE ‘O’ Levels cannot become agents.
A mandatory examination also means agents cannot start selling properties just days into the job.
Currently, larger agencies like Dennis Wee Group and ERA hire some 200 new agents a month. This could go up further during a property boom.
Another concern pertains to agents who hold a licence to operate their own firm.
With the proposed changes, real estate agencies are no longer allowed to employ this group of agents.
There are over 20,000 real estate agents in Singapore currently, and market players expect this number to fall by 10 to 25 per cent when the new rules kick in, as agents who do not measure up leave the industry.
Source : Channel NewsAsia – 14 May 2010