Property agents turn to rental market as sales slow

SINGAPORE – Real estate agents are increasingly turning from the once-lucrative resale market to rentals, as they hunt for a living to preserve their careers and clients during what is expected to be another challenging year for the industry.

The shift comes as the rental market holds its own in the housing sector, which has been hit by slowing demand following several rounds of cooling measures and lending curbs, industry practitioners told TODAY.

“The market definitely has slowed down, transactions have been reduced and, of course, real estate agents are feeling the pinch. So, many of them are switching from sales to rentals,” said President of the Institute of Estate Agents (IEA) Jeff Foo. He added that the rental market has not been as badly hit, adding that the regulation requiring new permanent residents to wait three years before they can buy Housing and Development Board (HDB) flats is among the factors that have held up demand.

The HDB resale market continued to lose momentum in January, with transactions down 34.6 per cent on-year, according to the Singapore Real Estate Exchange (SRX). For the whole of last year, transactions had plunged by almost 30 per cent, the lowest since HDB started collecting the data in 1997.

In the private resale market, an estimated 310 non-landed homes were sold in January, a sharp decline of 70.2 per cent from a year ago, SRX said. Chief Executive of real estate agency GPS Alliance Jeffrey Hong said: “There are still transactions in both the HDB and private rental markets and (conditions should) remain like that for the next one quarter or two. So for now, things are still quite okay for the agents.”

One agent who has taken advantage of the relatively resilient rental market to maintain his income level is Mr Victor Chan from DWG agency.

“(Resale transactions) have definitely slowed down since I started about a year ago … I’m doing more rental cases now; that’s how we’re surviving,” he said.

However, industry insiders say they expect even the rental market to suffer, with an onslaught of new private homes expected in the coming months. With foreign hiring increasingly tightened, the tenant pool for these new homes will be limited, they said.

“It’s going to be tougher. The rental market has always seen steady volume. But if more agents enter the market, it means the new entrants are taking the volume from somebody else. And with the huge supply of newly completed (private) homes, more landlords will be fighting for tenants,” said the Chief Executive of Century 21, Mr Ku Swee Yong.

When that happens, real estate agents who fail to diversity their income stream will be forced to seek other employment opportunities.

“Agents have to be very resourceful and they have to work doubly hard to reach out to more consumers because when the market swings, it becomes very competitive,” said PropNex Chief Executive Mohamed Ismail. “Previously, an agent could focus on one area, such as HDB, but today you can’t.”

Mr Foo added: “You just have to bite the bullet and ride the storm and hope for the best. I think the market will go through some correction and the fitter ones will survive. But those who really can’t cope, many of them would think it’s better for them to switch careers.”