Centaline Property downsizes in Shanghai amid sales slowdown
Shanghai's top real estate agent has been forced to downsize, hurt in part by a delay in commission payments from property developers in a market facing increasing liquidity pressure and a slowdown in sales.
Hong Kong-based Centaline Property, which has about 470 branches in Shanghai, said it had imposed a hiring freeze in the commercial capital and had been reviewing leases at some of its branches since the fourth quarter of last year.
"For agents and shops that can't meet quotas, we would let staff go through natural attrition and stop renting," said Clement Luk, the company's chief executive of east China.
"April's transactions in Shanghai were about 20 per cent lower than March. Looking at the momentum now, April may not be the bottom yet. May and June could still be on a downward trend."
Another top agent in Shanghai, Dooioo Real Estate, said it was also cutting staff, although it still planned to increase its number of branches in the city to 250 by the end of the year from 206.
The media reported the two real estate agents were cutting staff by 5 per cent to 10 per cent, citing internal sources.
Dooioo said its staff cuts would be less than that figure, while Centaline said only it was letting staff go.
The mainland's real estate industry is facing mounting pressure as banks make it harder for developers and homebuyers to borrow loans.
Price corrections are also spreading to top-tier cities, with excess supply in Beijing and Shenzhen, according to China Real Estate Information Corp, a property data provider.
Shanghai's supply of unsold housing at the end of last month was 48 per cent higher than a year ago, and its area of residential property sold last month dropped 18 per cent from March and was 16 per cent less than April last year.