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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."
(For more biz stories, please visit Industry Updates)
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