The profits of some of Singapore’s biggest property agencies have nose-dived by as much as 20 to 50 percent due to weak transaction volumes in the private housing market following several rounds of cooling measures, according to media reports.
As a result, more than half of Singapore’s 1,425 registered agencies could suffer losses, revealed some top names at these agencies. Moreover, many of their agents failed to clinch any sales, or became inactive last year.
“I would not be surprised that many small and mid-size agencies and even the larger agencies, if they are not nimble enough, will face challenges and many will end up in losses,” said PropNex CEO Mohamed Ismail.
Although the firm’s sales in the residential market only declined by three percent this year, profits saw a larger drop of 20 percent as overall transaction value fell alongside property prices.
ERA Realty’s Chief Executive Jack Chua also admitted that profits of major agencies have fallen by 20 to 50 percent.
In 2013, net profit for its agency business ERA Realty Network slumped by 43.5 percent to $10.4 million given the 12 percent drop in sales, based on filings submitted to the Accounting and Corporate Regulatory Authority (ACRA).
As for HSR, it suffered a net loss of $5.42 million in 2013 from a net profit of $3.45 million in the previous year, according to documents submitted to the regulatory watchdog.
However, the situation could get worse. Developers’ sales, which make up about 66 percent of all private non-landed transactions, declined to 4,409 units in H1 2014. This means the year-end total will be a far cry from the 14,948 units seen last year and the 22,197 units in 2012.
Records from the Council for Estate Agencies (CEA) shows 67 licensed property agencies closed their doors last year with 1,425 agencies still remaining as of 1 January 2014.