Big players recruiting staff again in battle for market share while smaller firms struggle

Leading estate agencies are recruiting more people to fight for bigger market share, bucking the trend of 'fat-trimming'' in the overall economy.

Centaline Property Agency, Midland Realty and Ricacorp Properties said they hired more than 800 workers last year, while the market took on about 2,000 people.

However, players said some licensed agents would not renew their licences because they had yet to pass the qualification examination and were discouraged by the deteriorating business environment.

According to the Estate Agents Authority (EAA), there were 16,125 licensed agents and salesmen at the end of December, up from 13,651 practitioners a year earlier. This meant 2,474 newcomers joined the industry during the year.

The number of practitioners was still far below the 19,991 when the licensing system was introduced in January 1999, with a net loss of about 4,000 jobs in the past three years.

Most agents set up before the licensing system became effective were due to pass qualification examinations to renew their licences by the end of last year. Analysts said EAA's December figure was not up to date and a clearer picture on the number of agents remaining in the business would emerge only when the January figure was out. EAA did not return calls for comment.

Shih Wing-ching, managing director of Centaline Property Agency, said the company's staff increased from 1,800 to 2,100 last year. The expansion was to gain market share but he indicated that the whole agency industry might have had job losses.

Mr Shih added that many estate agents had already quit the industry due to weak home-buying sentiment and drastic home-price corrections in the past few years.

'Many agents say it is not worth staying in the business in light of falling home prices and the shrinking commissions. This is no longer an attractive business for young people,'' he said.

Property Agencies Association chairman Li Man-pong said job losses in small- to medium-sized agencies had stabilised. Members of the association are mostly these types of firm. Mr Li said a wave of job losses had occurred in 2000, while those remaining in the industry had repositioned themselves to survive.

However, Midland Realty executive director Victor Cheung believed about 200 to 300 agents might have chosen not to renew their licences on expiry at the end of last month.

He said a survival race was under way. Midland had recruited 500 people last year and planned to recruit another 500 this year. Mr Cheung said 30 per cent of these new employees would be assigned to handle primary sales with the remainder handling secondary sales. Midland employs about 2,550 people in Hong Kong.

Fortune Realty managing director Tin Kwok-keung doubted whether the increase in the number of property agents was transitional.

He said well-established agents had to renew their licences by the end of last year, while many might choose not to renew in the wake of less secondary market activity.

However, agencies recruited younger and less-experienced agents to handle primary property sales during the second half of last year because the primary sector required more manpower that was diligent and patient rather than being knowledgeable and experienced, he said.

Ricacorp Properties managing director Barry Law said he wanted to hire more than 200 agents this year to strengthen the sales team in the primary residential sector.

The company also planned to expand its retail-outlet network in popular private housing estates because of falling retail rents. He said it would be easier to negotiate rent reduction when opening new branches in the prevailing economy. Ricacorp has about 70 outlets and 800 agents.

He expected property prices to remain flat in the first half of the year despite increasing transactions in the primary sector.