IN FOCUS: Love them or hate them, Singapore's property agents are on the rise - but for how long?

SINGAPORE: It was 2019 and Singapore undergraduate Christian Oh was looking for part-time work to help his family, which was in financial trouble then. "Property agent" was suggested to him.

“I am not someone who is very good at talking but my friend said, ‘why don't you just give it one try?’”

By the end of 2020, Mr Oh was earning five-figure sales commissions and ranked among the top 100 at his property agency. He turned full-time after graduating in 2021. That year, he was named “millionaire” - a title given to realtors who earn S$1 million (US$764,000) in commission a year.

Joining the real estate industry after graduation also meant breaking a scholarship bond – a painful decision not just because of a six-figure penalty, but also because Mr Oh was giving up his ambition to become a teacher.

But the 28-year-old – now director of investments at JNA Real Estate, a division under Propnex Realty – has no regrets.

“I believe in how real estate investments can be a tool for financial and retirement planning,” he told CNA earlier in October. “I have done it for myself and my parents, and I know I can replicate it for others.”

Mr Swan Htet Oo was also in university when he realised he wanted a career in real estate instead.

The civil engineering student was “amazed” by a virtual viewing of a condominium showflat, which a property agent had customised to his family's needs.

Also impressed by what he saw as the industry's adaptability during the COVID-19 pandemic, Mr Swan signed up for a real estate salesperson course in 2020, while juggling his undergraduate studies. 

It took four tries before he passed the notoriously difficult examination, the 28-year-old recalled with a chuckle.

His experience on the job since has been more smooth sailing. Two years in and Mr Swan is already one of Huttons Asia’s top agents, having been named a “rising millionaire” for earning at least S$500,000 in  commission a year.

Mr Oh and Mr Swan are among those who've ditched ostensibly more traditional professions to become real estate agents, and who appear to have struck gold. The industry has welcomed thousands of new entrants in recent years – suggesting the growing popularity of the profession.

At the same time, criticism has arisen over what some perceive as ostentatious conduct by agents, along with concerns of an oversupply. The property market has also slowed down from a pandemic-fuelled boom in 2021 and 2022.

For the whole of 2023, the number of private homes sold fell to its lowest level since 2016, dampened by government cooling measures and elevated interest rates. Thus far in 2024, sales figures from January to August are down 48.6 per cent over the same period last year.

Then there is the emergence of younger, tech-savvy buyers embracing do-it-yourself (DIY) property transactions, further stirring up questions over whether the good run for the real estate agent industry is coming to an end.

COMMISSIONS AND PERCEPTIONS

Figures from Singapore's Council for Estate Agencies (CEA) showed 35,251 property agents as at Jan 1, 2024.

The number of new entrants has remained relatively stable at just over 2,000 annually between 2021 and 2023, the industry regulator told CNA. About 70 per cent of them were in their 30s and 40s.

PropNex is Singapore’s largest property agency with 11,999 agents. ERA comes next with 8,891 agents, followed by Huttons Asia with 5,298, OrangeTee & Tie with 2,814 and SRI with 1,286 agents.

At least two of these agencies have seen more young people joining their sales force.

About 55 per cent of new agents who joined ERA last year were below 35 years old, up from 40 per cent in 2021. It was a similar number at Huttons Asia, where half of newcomers in 2023 were 35 and below.

More people have been drawn to the industry by rising property prices and “attractive” commissions, said Professor Sing Tien Foo from the National University of Singapore (NUS).

Currently, there are no set rules for commission rates but property agents typically ask for between 1 and 4 per cent of the transaction price, depending on who they represent and the property type.

At ERA, the average annual income of a new agent under the age of 35 and with at least one transaction was S$30,000 last year. For those who made it to the top 5 per cent within the agency, the figure was S$170,000.

These numbers are lower than that in 2021 but things seem to be looking up, with interest rates now falling and developers lining up more new projects, said ERA’s key executive officer Eugene Lim.

Also burnishing the property agent's appeal as a profession is how it's shed the image of a “cowboy” industry, after CEA was set up as a regulatory body in late 2010, said Mr Adam Wang, president of the Singapore Estate Agents Association (SEAA).

As part of the regulatory regime, all new property agents must take a preparatory course and pass an exam before they can be registered with CEA. The exam has been described by industry players as tough, with a passing mark of 60 out of 100.

“As it is not easy to pass the exams and maintain the high standards to renew the licence, (the property agent) is now a much-coveted profession to a rising number of graduates,” said Huttons Asia’s chief executive officer Mark Yip.

Their work has also evolved “beyond just being a salesman” to requiring different skills ranging from digital marketing to financial analysis, said PropNex's chief agency officer Eddie Lim.

Put it all together and the work of realtor is “no longer seen as a side income gig”, ERA’s Mr Lim added.

AGENTS AND BUYERS: A LOVE-HATE RELATIONSHIP?

Yet, property agents have also come under fire for what some decry as flashy lifestyles being paraded online.

Take a video posted on ERA's TikTok account last year. Titled "Asking millionaires how much is their outfit", it features an agent introducing his branded clothing and accessories, which come up to an eye-watering total of S$54,700.

The clip has garnered nearly 200,000 views to date and going by the comments, not all netizens are impressed. One wondered about the purpose of the video and asked “(Are) we overpaying agents?”, while another called it “humble bragging at its finest”.

Mr Oh, the 28-year-old agent, was on the receiving end of similar criticism after revealing in an online video last year that he had amassed five properties under his name, and bought another three as gifts for his parents and wife.

He said the video, produced by his team at JNA Real Estate, was aimed at sharing his personal story and journey into property investment.

"I saw some of the comments in the online forums. That was tough,” said Mr Oh, with a smile. 

“But my personal investments have helped me to achieve my goals, which is to give my parents a better life and they can now semi-retire because of passive rental income. So I am thankful for that and … I was trying to portray how real estate can be a way to better steward our wealth.”

He said he revealed his portfolio “not to show off”, but to build up personal branding. Sharing his own investing experience and successes has helped build trust with his clients, Mr Oh added.

SEAA’s Mr Wang also made the point that agents may showcase achievements or lifestyles to recruit team members or attract clients.

“Some customers prefer agents who are seen as successful.”

PropNex told CNA it has guidelines to “ensure property agents represent themselves and the company with dignity and professionalism, both online and offline”.

ERA meanwhile offers internal training on social media and personal branding, and reminds agents to be “mindful and sensitive” with their online presence, said its key executive officer Mr Lim.

People may be “too quick to criticise” at times, and narrowly focusing on the "rewarding" part of the job while ignoring the "hard-at-work" part, he added.

“Ask any successful agent and they will tell you that while the rewards may be great, it requires discipline, resourcefulness and sound business and people management skills ... It is a tough business and not a walk in the park.”

Mr Pow Ying Khuan, lecturer at Ngee Ann Polytechnic’s school of design and environment, said social media portrayals of an agent’s lifestyle are “not representative of the entire industry”.

“While some criticism, such as concerns about high commissions, may still be valid, it is also important to recognise the value that (real estate salespersons) bring to the table."

"MISUNDERSTOOD" MIDDLEMEN?

That said, the relevance of a property agent has also come under the spotlight, with DIY transactions made easier through online platforms that match sellers and buyers directly.

In May, the Housing and Development Board (HDB) rolled out a service allowing homeowners to list their flats for sale directly on HDB’s online portal. Prospective buyers can browse listings and transact directly with sellers.

Questions have been asked about whether property agents are worth their commissions - especially as these fees have become substantially heftier along with rising property prices.

Adding fuel to the debate is the emergence of flat-fee agents such as Homeseller. The platform started out in 2019 and charges a flat fee of S$1,999 to buyers and sellers of HDB resale flats. According to its website, for a S$600,000 apartment, this would save clients S$10,000 otherwise given in commissions.

Huttons Asia’s CEO Mr Yip said however that the notion of property agents earning high commission fees was a “misunderstanding”.

“The commission paid to a RES (real estate salesperson) in Singapore is comparable to the commission in Malaysia and Australia. The gross per capita income of a RES in Singapore is probably around S$70,000,” he said, adding that this figure excludes operational costs, as well as yearly MediSave contributions.

An agent’s typical operational costs include personal marketing campaigns, data analytics, home staging, video production for clients’ homes and listings on property portals.

The latter is essential for closing deals, agents said, and has been costing more as portals adjust their offerings of paid features that allow agents to boost listings. It's not unheard of for top agents to spend at least S$50,000 a year on listing fees alone.

All these costs are borne entirely by agents, even if a deal doesn't pan out.

“Clients can walk away anytime,” said Mr Swan, who has had clients decide not to sell their homes after close to nine months of marketing. “There is nothing you can do but to bear the losses.”

Sometimes, sellers also engage multiple property agents. This sets up "fierce" competition among the agents, who'll have to boost listings "non-stop" in hopes of sealing the deal, said Mr Swan.

Property agents also stressed that being commission-based doesn't mean they should be seen as profit-motivated.

Mr Swan said he once dissuaded a couple from investing in a property as it was not in line with their family needs and long-term goals.

“I can choose to close the deal, but I don't want to. For me, it's not always about commission,” he said, adding that he believes in giving “frank” advice to clients to build long-term relationships.

TOO MANY IN TOWN?

The number of property agents, set against Singapore’s market size, has also raised concerns around an oversupply.

About 65 per cent of senior property industry executives polled by NUS last year thought so. Nearly a quarter of the survey respondents felt there could be a cap on agent numbers.

Property agencies however pointed out to CNA that not all registered agents are active.

Arguing that agents “can be quite stretched” especially during busy months, ERA's Mr Lim said: “The population of Singapore has crossed 6 million and the number of properties has been increasing year after year ... How can we cut back on the number of agents?”

The agencies also rebuffed the idea of a cap, saying it could encourage agents to hold on to their licences and deter potentially more qualified new entrants.

“Market forces will determine whether there are insufficient or too many agents in the market,” OrangeTee’s chief executive officer Justin Quek said.

Mr Pow from Ngee Ann Polytechnic meanwhile noted that beyond housing, the real estate sector also covers commercial properties as well as customers looking to invest overseas.

So while some of these segments may be saturated with agents, others may still require their services, he added.

“Rather than a strict cap, raising entry standards and promoting ongoing professional development would likely be more effective. This approach ensures that (agents) entering the field are well-trained … while allowing the market to remain flexible to changes in demand.”

Nonetheless, a bigger pool of agents in a slowing property market means that competition is heating up. 

Amid feedback from some agents about rising operating costs, OrangeTee will let agents “receive 100 per cent of the commission from new launches with effect immediately for the next nine months”. 

Property agencies typically take a cut from their agents' commissions.

Agencies have also been chipping in on the technological front. PropNex, for one, offers in-house marketing and digital platforms to help its agents “reach clients more efficiently, minimising unnecessary expenditures”.

THE WAY FORWARD

From October next year, CEA will require property agents to clock 16 hours of training a year, up from six to nine hours currently, to renew their licences. 

NUS’ Professor Sing said this would help further professionalise the industry, but he also suggested that stricter regulations might help eradicate unethical practices such as misleading listings with unrealistic asking prices.

SEAA, on its end, has partnered property agencies and listing portals to develop a prototype aiming to tackle fake listings. After two years of work, the prototype has been handed over to CEA.

“If this is put in place, agents will have to go through this platform to get their listings checked and verified … before the listings can be posted on any property portals,” said the association's president Mr Wang.

In response to queries including on initiatives to raise standards, CEA said: “Property agents are expected to uphold high standards of professionalism and ethical conduct when carrying out their work ... We will continue to work closely with the industry to enhance professional and ethical standards amongst property agencies and agents to ensure that consumers’ interests are protected.”

Industry players told CNA that the fundamental value of a property agent now goes beyond just connecting buyers and sellers.

“They need to act as consultants, guiding their clients through market trends, analysing pros and cons, and ultimately helping them make informed decisions,” said PropNex's Mr Lim.

This is especially the case for more complex or emotional transactions, such as helping a grieving family to sell a flat belonging to a deceased family member.

In such a situation, agents can help navigate the necessary steps during this difficult period and even, at times, “act as a bridge” to discuss the sale sensitively with other family members, said Mr Wang.

This was why Mr Aaron Koh took the plunge to become a property agent after 16 years as a teacher.

The 44-year-old first got interested in real estate about two years ago, after selling his first home in a process he described as “emotional, physical and financial”.

He had great help then from a property agent who handled both the sale and the search for a new place.

“He arranged for viewings, helped me with the legwork and especially the timeline between selling my old place and getting my new home ready,” recalled Mr Koh.

“In the process, my wife got pregnant so we decided to delay the moving and my agent helped to re-negotiate the timeline. These are all things that I would not have done on my own.”

The experience prompted a career switch and since joining Huttons Asia a month ago, Mr Koh has been undergoing training and working the ground at roadshows and new launches as well as by knocking on doors.

“I want to make this work as a long-term career,” he said. “I definitely hope to see success, but I will be patient. Right now, it’s about levelling up my knowledge and making sure people can trust me.”