Faced with the financial tsunami and a shrinking residential property market, major property agencies in Hong Kong say they have to downsize their businesses or lay off workers to survive.

Centaline Property said yesterday that it will lay off 120 employees by the end of this year as a result of the market slowing and property sales falling in the region.

"Property agents are not only facing a severe winter this year, we are struggling in the ice age now. We don't ask to raise our income, but to keep our jobs," Centaline Chairman Shih Wing-ching said in an interview on local network Cable TV.

According to Centaline's research findings, the number of registries for private residential units was 1,231 in the third quarter, and the estimated number for this whole year will be 11,000, down 42 percent from last year. The figure is the lowest since 1996.

"Sales were down 40 to 50 percent, so how can the company survive?" Shih said, stressing that the layoffs are to protect the interests of the company majority.

The property agent expects to close five locations next month after their leases expire.

Ultimately, the agency aims to lay off 20 percent of its existing workforce, to 2,100 from 2,600 employees, reducing the number of its shops from 240 to 180.

Midland Realty, another property agent in Hong Kong, will downsize by freezing recruitment and not replacing lost employees. Currently, there are 3,200 existing staff members with Midland Realty.

By natural loss without replacement, the agent hopes to reduce 100 staff per month and expects to close 6 shops in a month, the source said.

In the company's statement, Kitty Ip, managing director at Midland Realty, denies 1,000 staff members being laid off by the company. She estimated the company had sacked less staff than the reported number.

She put emphasis on reconstruction of the company in order to cut costs on the weak licensed property agents.

"The company has policies in strengthening businesses in 5 stages. The cut in resources will be done according to competition and changes in the market," Ip said in the statement.

Going forward, Midland Realty wants to focus on hiring experienced licensed property agents for the second-hand property market in order to acquire a larger market share.

(HK Edition 10/15/2008 page2)