When 20,000 real estate agents disappear
Singapore has, according to estimates, about thirty thousand real estate agents in a city of five million people.
Or had, until last Friday night.
I was on my thirty-somethingth Hendricks and tonic when the clock rolled over from Friday to Saturday, and I completely missed the moment when more than twenty thousand real estate agents… disappeared.
Real estate agencies have until midnight on Friday to submit a list of their agents.
According to estimates, there are about 30,000 agents in Singapore. However, as of 5pm on Friday, only some 6,600 applications were received. […]
If the applications don’t go through in time, even practising agents with the necessary qualifications will have to take the new CEA examination.
What’s happening here is that Singapore is finally launching a dedicated regulator for real estate agents. In the past, real estate licensing was handled by the Inland Revenue Authority (the tax office), and that worked about as well as you’d expect. The agencies had to be licensed, but the actual salespeople didn’t have to have licenses, training, or regulations. They barely had to have a pulse.
Now, the agent’s commission on an average transaction is going to be somewhere around 2% of the sales price; and an average sales price in Singapore, if we take the median of the 72,000 listings on PropertyGuru, is somewhere around $1.4 million. (That includes government-subsidised HDB apartments.) So in cold hard cash terms, a salesman who brokes just one transaction a year is going to clear, on average, somewhere around $28,000.
The median income in Singapore is, coincidentally, about $28,000. So being a successful real estate agent in this town can be a hell of a ticket to ride.
And every afternoon I’d come home from work and find my mailbox stuffed full of real estate flyers from wide-eyed young agents trying to hitch a ride on the gravy train. Some would be misspelt (“GREAT INVESTMENT OPPORTUINTY!”). Some would feature the web-resolution photos from a condo’s website blown up into a blocky neo-cubist mess. Some would be hastily photocopied black-and-white A4, still smelling of toner. Some would be written entirely in Comic Sans.
But all of them would have photos of a 21- or 22-year-old kid in an ill-fitting suit, smiling their best school-picture-day smile, and all of them would urge the reader to call (always a mobile phone number) or email (always @hotmail.com or @yahoo.com) and give them your real-estate listing and the $28,000 golden ticket that came with it.
In March this year, the government finally put its foot down. The Minister for National Development called the real estate agents’ behaviour “not satisfactory”, and said the status quo was “not tenable”, which for stodgy Singapore is roughly the equivalent of Sue Sylvester saying that being mean to Spanish teachers is “not appropriate”.
The Ministry which he controls said “how high?”. They introduced a raft of measures to fix the industry: setting up a new regulatory body; tightening up agency registrations; introducing dispute resolution to a previously resolution-free zone; and, importantly, forcing agents to register and undergo training.
This seems to have been something of a problem for 24,000 of the 30,000 or so real estate agents in Singapore. The registration deadline was Friday night… but, as Channel News Asia noted in their article, only six thousand agent registrations had arrived at the new CEA offices by late on Friday. It seems that more than twenty thousand real estate agents have decided that it’s not worth the effort any more to try and land that elusive $28,000 golden ticket.
The new regulatory regime kicked in on Saturday morning. We’ll see on Monday whether there’s suddenly 83% fewer flyers in my mailbox.