Nov 24, 2008

Downturn? Not for these businesses

REAL ESTATE AGENTS: Downgraders, bargain hunters are main clients

Not all companies see gloom ahead. Tessa Wong and Jessica Lim find that some are getting sunshine as consumers turn to lower-cost alternatives.

THE real estate industry is keeping its head above water as a result of bargain hunters attracted to the falling prices and home owners downgrading to smaller, cheaper properties.

The higher number of sales transactions has translated to better pickings for property agents. Major agencies contacted say they have had better sales for lower-end housing in the last three months.

PropNex's stable of 5,000 agents sold more than 400 condominium units in the price range of $1,000 per sq ft or less in that period, up a quarter from the preceding three months.

Sales of HDB flats and low-end landed houses have also jumped 10 per cent.

HSR Property Group, the largest agency here with 8,500 agents, is selling about 2,500 flats and low-end condo units a month - 5 per cent more than three months ago.

At Dennis Wee Properties, sales - particularly of three and four-room flats - are 'going strong'.

Two recent launches from the housing board also saw brisk activity, with applicants outnumbering the number of available flats by more than 10 times.

The rise in number of transactions for lower-end units more than makes up for the fall in that for high-end properties, said industry experts, who cite an average 7 per cent drop for that sector.

The downturn has made for good times for agents.

The executive director of HSR Property Group Eric Cheng said in good times, new agents join the industry because they think it is easy to make a quick buck. The pie is split among more people. 'But in a downturn, the number of agents falls and each tends to earn more,' he added.

Mr Ryan Tan, 40, for example, has sold 12 properties this month, up from five last month. His clients are moving from prime areas to the suburbs, with many saying they need the extra cash.

His clients would know what it is like to be in the shoes of teacher C.Y. Leow, 51, who sold her five-room private apartment in Somerset two months ago after losing $150,000 in Minibond investments - money that was to be her retirement nest egg. She and her family will move into a five-room Bishan flat next month- a move that nets her about $750,000.

PropNex chief executive Mohamed Ismail said the business seems recession proof. 'At the end of the day, everyone needs a roof over their heads. An agent will always have a job in any market.'