Center

Real estate agents feel the pinch

(China Daily)
Updated: 2006-07-27 09:22

In Shenzhen, Centaline's second-hand sales fell 34 per cent from May to June but average trading prices rose slightly, suggesting mid to high-level properties may be better protected against the slump than lower budget properties.

"What we're seeing is the law of the jungle taking charge," said Zhang Xiaoping, an analyst with E-House China.

"It is survival of the fittest and it is those who adapt best to the new market conditions who will survive. Property agents are facing a cold, cold winter.

"We're going to see more and more small and medium-sized agents withdrawing from the market, while the larger companies slow down expansion in preparation for the sluggish market ahead."

In fact, according to Wu Song, an analyst with the Shanghai Online Property Trade Centre, Shanghai's property agents have already been considerably thinned out from 12,000 two years ago to 6,000 today. Around 600 agents left the market during June, he estimated.

Of the bigger agents, Centaline planned to open 48 branches in Shanghai this year, but cut the ribbon on just two new offices in June.

New situations call for changes in approach, Yu Yingying from the company's communications department told China Daily.

"We have no intention of shutting offices, but plans have to be adjusted to fit with the prevailing conditions," he said, hinting that if things did not improve by the end of the year, staff and branch cuts would be forthcoming.

Meanwhile Midland Realty, while admitting a 30 per cent monthly slump in sales, is still aggressively expanding, going from 31 to 38 branches in June alone.

"We wanted to pursue this expansion several months ago, but the demand for property was too high and renting office space was too expensive," explained Song Lei, the company's director of communications.

"Now property prices have gone down we can afford to expand so we're taking advantage of the temporarily depressed market."