Beginner’s bad luck: Greenhorn real estate agents hardest hit by property sales drought

Almost 4,000 agents dropped out of the industry last year.

Novice real estate agents are the biggest casualty of the property market’s ongoing sales drought. Data from the Council of Estate Agencies showed that 3,959 salespersons did not renew their licenses last year, as the number of registered agents crashed to its lowest since 2012.

According to ERA Realty Division Director Eric Tng, most of the dropouts are new salespeople who have been in the business for less than three years.

“Generally, it is more difficult for a new entrant to gain a foothold in this business. It takes a few years to build up their clientele base to get referral business. With fewer deals and higher marketing costs, everyone's income has taken a hit. Salespersons now have to put in more time, effort and money to secure a deal,” he said.

But cooling measures aren’t the only culprit. Ismail Gafoor, CEO of PropNex Realty, noted that apart from high costs and sluggish sales, property agents have also been hit by the newly formed Personal Data Protection Act (PDPA) and the Do-Not-Call (DNC) list, which has made the jobs of property agents even tougher as they have to adhere to more stringent guidelines.

“These have made it difficult for real estate agents to survive and many have to turn to other careers in order to survive,” he noted.

Ismail noted that when sales are poor, some agents find having to make regular CPF contributions and forking out money for professional indemnity insurance and Continuing Professional Development (CPD) courses deterrents to renewing their CEA licences.

Agents who leave the real estate industry turned to multi-level marketing or some other jobs with a stable monthly income.

“Interestingly, many salespersons will keep their license and wait for good times to return. Meanwhile, they will take up a part time job or do other kind of sales (like MLM) to supplement their income. For those who dropout, most will return to full time employment,” Tng added.