Property agencies face possible massive job losses because of continued market doldrums aggravated by the global economic slowdown. There are growing fears of lay-offs after Centaline Property Agency took control of medium-sized competitor Ricacorp Properties last week to become the Hong Kong's largest agency. While Centaline insisted the acquisition would not trigger lay-offs within the group, industry sources were concerned there would be more similar mergers and acquisitions among agencies as the market worsened. Victor Cheung, executive director of Midland Realty, expected about 4,500 agency workers, or 30 per cent of the total for the industry, would be pushed out in a year. He said the industry had too many workers for the reduced amount of business. Last month, there were 15,273 licensed agents to handle 7,000 property transactions - meaning one person handled only 0.46 of a deal, he said. Mr Cheung said the property market had turned sour following the terror attacks on the United States, while extra subsidised housing loans provided by the Government would not be available until November. Early this month, government officials announced the unemployment rate had increased to 4.9 per cent in the June-August period. Financial Secretary Antony Leung Kam-chung foresaw a further rise in the next few months. Analysts said job insecurity had dampened home-buying activity, which was the basic business for property agencies. This would force more agencies to struggle for survival. According to the Estate Agents Authority, there are now 15,410 individual licensed agents in the industry, slightly down from 15,497 early last year. In January 1999, when the licensing system took effect, there were 19,991 licensed agents. Centaline had about 2,200 employees while Ricacorp had more than 900 staff. Midland and its subsidiary Hong Kong Property Agency together employ about 2,500 staff. Shih Wing-ching, managing director of Centaline, disagreed with Midland's estimation, saying it would not be surprising to see lay-offs of 1,000 to 2,000 people. But, he said, it was impossible for 4,500 people to be sacked in one year. He said after the hardship of the past few years, the stayers in the industry should be those who had difficulty changing careers and those who could survive despite short-term losses. Mr Shih said while the industry had too many workers, the adjustment would be a slow process, citing the analogy of the Chinese newspaper industry. 'Even though the market might allow only two papers to survive at the end, the existing papers will not close altogether.' Mr Shih said property agents had to face 'not a winter but a glacial period' and the difficulty would be especially large for medium-sized firms. He stressed he had no intention of laying off staff following the acquisition of Ricacorp, but would let the two independently run companies compete with each other. 'My act is non-commercial and irrational,' he said. He liked competition and he wanted to prove his own idea was right - a system giving autonomy to its staff could achieve a better result than a centrally managed firm. James Tin, managing director of medium-sized agency Fortune Realty rejected the suggestion that medium-sized players would find it more difficult to survive, saying 'the dinosaur is more difficult to turn its body around'. He agreed that 4,500 people could be driven out of the industry, which had suffered from having too many workers and excessively high salaries. In the past two years, despite a poor operating environment, estate agents specialising in secondary sales received a 10 per cent pay rise, while primary market sales specialists had a 20 per cent rise on average due to competition among large firms to get larger slices of the market, Mr Tin said. He did not expect more mergers and acquisitions but said companies should cut staff to bring the industry down to a workable size. He said Fortune had cut 10 per cent of its staff this year, to 400 employees.