Tag Archives: ERA

Profit slump for some agencies

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.

HDB resale prices resuming uptrend: SRX

Resale prices for HDB flats are showing signs of picking up, with latest data pointing to a 2-per-cent rise in the last two months, according to the Singapore Real Estate Exchange (SRX).

The median resale price for HDB flats islandwide increased to S$438,800 in the last two months from S$430,000 in the first quarter of the year, the SRX said yesterday.

The SRX is a consortium of 11 leading property agencies including ERA, Savills and OrangeTee.

Mr Tan Kok Keong, director of research and consultancy at OrangeTee, said prices would remain resilient for the rest of the year but would likely see slower growth.

“I will expect low single-digit increase for the rest of the year,” he said.

The SRX figures suggest the market is resuming its uptrend after official data from the HDB published in April showed resale prices rising at their slowest pace in five-and-a-half years.

The HDB’s resale price index (RPI) rose 0.6 per cent in the first three months of the year from the fourth quarter of last year, lower than the 1.7-per-cent increase in the previous quarter and at the slowest pace of growth since the third quarter of 2006.

Analysts said a slew of recent Government measures had helped to stabilise the RPI, including the ramped-up supply of new Build-to-Order (BTO) flats, the increased allocation to second-timers for such flats, as well as the higher income ceilings for direct purchases.

But property agency DWG noted earlier that “the litmus test for the HDB resale market will come three to four years down the road when these BTO flats and ECs are completed and there is a real urgency for these home buyers to sell their existing HDB flats within six months.”

Meanwhile, the private resale market is also on track for a stronger second quarter.

SRX data showed prices for private resale non-landed in the core central region rose 5.9 per cent over the last two months to S$1,733 per sq ft from S$1,636 per sq ft.

Source : Today – 2012 Jun 8