A major shake-up is expected among real estate agents as their numbers are expected to fall by as much as 25 per cent when the new rules to regulate property agents kick in later this year.
Agents who do not measure up will likely leave the industry and market watchers said smaller real estate agencies in Singapore may also consolidate.
Currently, there are more than 20,000 real estate agents here and when the Government set up the Council of Estate Agencies to regulate them, market players said they expect the numbers to decline between 10 per cent and 25 per cent.
And while agencies are concerned about recruitment and compliance costs, home buyers on the other hand can soon shop with greater peace of mind, as the coming regulations weed out rogue agents and raises professional standards and accountability.
Under the new regulations, real estate agencies are expected to have systems for handling complaints and resolving disputes.
“For bigger companies, most of these systems are in place, so there’s minimum add-on cost, but for the smaller companies, they would probably have difficulty doing all this,” said Mr Eugene Lim, associate director of ERA Asia-Pacific. In the future, “most of them may come together to combine resources”, he said.
More smaller agencies may also join forces with big players. PropNex, for example, has consolidated more than 10 companies under its wing in the last five years.
Depending on their experience, staff from these companies could either become district directors or branch directors.
Out of the 1,700 licensed agencies in Singapore, over 90 per cent have under 100 agents or are not operational, said the Institute of Estate Agents. These include those who are issued an agency licence but have decided to work for another real estate firm or outside the industry.
Meanwhile, the Dennis Wee Group (DWG) is reworking its training programmes and might consider increasing fees. Currently, an agent pays about $700 for 44 hours of basic training at DWG.
“We are exploring how to create a modular training (programme) for these new agents so that when they come in, one module will be for them to prepare for their exams, another module possibly some sales techniques on how to sell real estate,” said Mr Chris Koh, director at Dennis Wee Group.
The new rules will also affect recruitment by agencies. Job seekers without at least four GCE O-Levels cannot become agents and a mandatory examination would bar agents from selling properties just days into the job.
Currently, larger agencies like DWG and ERA hire some 200 new agents a month, which could increase during a property boom.
With the proposed changes, agents who hold a licence to operate their own firm will no longer be allowed to be employed by real estate agencies.
This raises concerns as DWG has said it has a handful of such agents who tend to be the better performers.