Why Agents Are Scum: An Economic Perspective on Renting in Singapore
My lease comes up in two weeks, so I’m hunting for an apartment. This is never fun - but in Singapore, it’s even less fun than in other parts of the world.
In most countries, you look on the web, find a listing, and call up the selling agent. Easy. In Singapore, it’s different.
Here’s a sample conversation.
_“Hi, I saw your listing for a 2-bedroom apartment in the Luxolicious condo building at one thousand dollars a month.”
A lot of condos in Singapore have ridiculous or confusing or otherwise dumb names; there’s the Rivergate, River Place, Water Place, and the Watermark; there’s also Tanglin Park, Tanglin Regency and Tanglin View; Regent Park, Regency Park, Regent Grove, Regent Hights, and Regentville; and the terrifically unoriginal Casablanca, Costa del Sol and Cote d’Azur. The Luxolicious is only a matter of time.
_“Ah yes sir, that one rented a month ago, sorry sir.”
“Then why is it still up on the website?”
“Sorry sir, already rented sir.”
So you give up and try another listing.
After the jump: economics explains it all!_
_“Hi, I saw your listing for a 2-bedroom in the Luxolicious at two thousand a month, the listing that was posted this morning…”
“Ah yes sir, sorry sir, that one just rented sir. Because of the price. Most other apartments rent for five thousand so this one went very quickly.”
“So why did you list this one for two thousand when you could get five for it?”
“Sorry sir, I don’t understand.”
“Is it even a real listing? Are you posting fake listings?”
“Sorry sir I can’t hear you, the signal is very bad here…”
And then you give up, because it’s impossible to find a place in Singapore without using a buyer’s agent. I don’t know if the agents have a secret internal database or something - if they do, I’d love to see it - but for whatever reason, the property listing websites in Singapore are jammed so full of fake listings as to be useless.
So you go out looking at places with your new buyer’s agent. He finds a place, and you try to talk directly to the seller’s agent.
_“How much does the owner want for this one?”
“He wants six thousand.”
“Well, see, I know there are apartments renting in this building for two thousand. So I tell you what, show him a one thousand bid and see if he’ll negotiate.”
“Oh, those must be the apartment with no views sir, this is six thousand. Owner will not negotiate.”
“No, that’s this same apartment, it’s even a higher floor. Tell your owner to stop being a dick.”
“Sorry sir, owner will not negotiate.”_
And then the buyer’s agent butts in.
“Yes sir, he wants six thousand, you should pay it, sir, apartments in this building are going for ten thousand. It’s a very good offer.”
They call you “sir” all the time. It’s really disconcerting.
_ “No it isn’t, it’s a ripoff. And what the hell are you doing talking the price up? You’re supposed to be on my side!”_
Then it hits you.
The buyers’ agent isn’t working for you at all.
In Singapore, both agents are paid by the landlord. The landlord’s fee is one month’s rent, and it’s split equally between the buying and selling agents.
The agents, being human, want to maximise their fee - so both agents want you to pay a high price. The seller’s agent wants to maximise the rental, sure, but the buyer’s agent has no incentive to help you rent the property on the cheap - he wants you to rent the most expensive apartment you can afford.
And you can’t do an end-run around the buyer’s agent, because there’s no useful database of listings. Your only price guide is the URA’s quarterly rental market updates - which don’t distinguish between full-furnished or part-furnished, low floor or high floor, sea view or construction site view, and don’t exist at all for buildings with less than 100 apartments.
This is probably a big part of the reason why renting in Singapore is so damn expensive - the market is completely opaque.
I don’t have a solution for this, short of starting up a real estate listings website where only sellers’ agents can post. If nothing else, there’s a huge market niche for honest buyers’ agents. If you have an idea for fixing this, drop me a note; tens of thousands of frustrated, ripped-off Singaporean renters will thank you.