Property agents feeling the hit as market cools
(Photo: Riverbank @Fernvale project)
It might be a buyer's market now as property prices in 2013Q4 have finally dipped after several years but it is about as grim as it gets for property agents. Buying interest is down to levels not seen since the months following the 2008 global crisis although prices have held up better this time around.
Agents are more concerned with transaction volumes than with sale prices as it is high turnover that generates their commissions. Only 565 new private homes were sold in January while 724 units were shifted last month. There were also only 242 resales in the private home market last month, down 18.5 per cent from January, according to the Singapore Real Estate Exchange. These numbers remind the market stakeholders of the financial turbulence. In the first two months of 2008, only 494 new units were sold although activity picked up in 2009, with 108 new sales in January and 1,332 in February of that year.
Propnex chief executive Mohamed Ismail said he expects transaction numbers to stay low, at least until the end of this year. Agents hope it will not mirror 2008 when only 4,264 units - new and resale - were sold in the private home market. Buyers are the market winners with a wide range of options - RiverTrees Residences, Riverbank@Fernvale, The Ascent, Cluny Park Residences and The Panorama all launched this year - at prices that are open to negotiation.
Agents are now finding it much harder to close a deal than in the past few years when property almost virtually sold by itself. An agent, who wanted to be known only as Mr Ng, said: "The buyers know that they have more choices now, and they're using this to their advantage to take their pick." He has been working at a showflat for the last month and has yet to close a deal. Another agent, who wanted to be only known as Mr E. Tan, said he used to close around three deals a month in 2012 but has not finalised a single purchase in almost two months.
From buyers' perspective, Nurse Denise Thia, 36, who visited two show flats in Sengkang earlier this month, said: "We're looking at buying a new unit for investment. There's definitely more choice for us now."
Taking a look at the showflats these days, it is easily noticed that agents often outnumbered viewers at showflats. Mr Ng said he has encountered buyers who want multiple viewings at showflats without real intentions to commit. Another agent, Ms Loh, said: "Agents don't have a stable income even in good markets and now, it's even worse for us."
Dennis Wee Group president Lionel Ng said increased loan restrictions and the wide range of choices for buyers are discouraging transactions. "Buyers are also starting to look at properties overseas as they are not as restricted in terms of loans," he added. Mr Lionel Ng, who has been in the industry for 18 years, said the market is the worst he has seen, even compared with the 2008 financial crisis. "(Then), agents weren't so affected as people were still selling properties. Agents are only affected by the number of transactions, so even then we were doing rather well compared with now." According to Mr. Ismail, transactions have fallen around 30% to 40% since 2012 in both private property and HDB flats.
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