SMALL estate agencies could be forced to cut staff or close if the dramatic slowdown in the property sales market persists, industry leaders warned yesterday. Agents contacted by the South China Morning Post reported that the number of inquiries from potential buyers had dropped by between 60 and 80 per cent and there had been a similar plunge in completed transactions. This will take a huge slice out of payments to staff, who normally rely on sales commission for about 80 to 90 per cent of their monthly earnings. On a good month, a typical sales agent working for a good company expects to receive between $4,000 and $6,000 in basic salary, but possibly another $50,000 to $60,000 in commission. The cut of the company's commission on a sale can range from 10 to 35 per cent, depending on the generosity of the employer. During a bad month, overall income can be expected to drop to between $10,000 and $15,000. But after this month's slump, they might not even make that amount. Most people in the industry admit to having done well enough during the property boom to tide themselves and their families over for quite some time. Employers fear, however, that many of their staff will start looking for other work if the slump continues. ''This is a volatile market,'' said Tony Chan, managing director of Tony T. N. Chan Surveyors. ''People come in and get out easily.'' ''In coming months, some small agents will have to close down,'' said Shih Wing-ching, managing director of Centaline Agencies. ''I don't think the market will recover soon,'' he said. Buyers are expected to stay on the sidelines until at least June or July, when a clear picture emerges of what new measures the Governor's special inter-department taskforce recommends to curb spiralling home prices. They are also said to be waiting to size up the likely impact of rising interest rates. President of the Society of Hong Kong Real Estate Agents, Michael Choi, said he expected employees who had been in the estate agency business for some time and had made a fair bit of money to ride it through the slump. Others who had only recently jumped on the bandwagon could now be thinking of switching to something else. Hong Kong has a staggering number of estate agencies. The last Census and Statistics Department survey, conducted almost a year ago, showed 4,730 real estate brokerages employing more than 15,500 staff. The total is said to have swelled to significantly more than this over the past year. Around 90 per cent of these are said to be small-timers employing less than 10 staff, and it is these firms that are most vulnerable to the slump. Alex Wong, general manager of Hong Kong's largest chain of high street agents, L&D Properties, reported the number of individuals approaching his shops to sell their flats had doubled over the past few weeks. But, inquiries from potential buyers had plunged almost 60 per cent. The general opinion among agencies was that average asking prices had dropped around five per cent, although people desperate for a quick sale had dropped their prices significantly more than that. Mr Wong cited one client who had cut the asking price for her 1,850-square-foot house in Tai Po from $9.5 million to $8.5 million - and still had not managed to sell. Speculators who committed themselves to buying pre-sale units when the market was at its peak are said to be the keenest to sell. These tended to be people who had put down deposits for flats in new developments and planned to sell them at a quick profit in a spiralling market before the final payment date. These people now found themselves stuck with expensive properties which they had not intended to own for more than a few weeks, in debt to the hilt and without the available funds to complete the deal. Genuine end-users, on the other hands, are said to be prepared to wait and see which way the market will turn. The mass market is said to have been worst hit, with the luxury-end artificially buffered by continued mainland buying.
