Bouncing Back: Real Estate Brokers Face Challenges in Recruiting Amidst a Warming Market
By Business Today
The beginning of 2023 saw a wave of layoffs in the real estate brokering sector. Many companies terminated contracts, furloughed employees for 3-6 months, and even let go of their staff entirely. By mid-2023, there was an estimated 30-40% decrease in active real estate brokers compared to the beginning of 2022, according to a report by the Ministry of Construction. The situation has been ongoing for some time, with a gradual decline and no signs of stopping.
In addition to the massive number of brokers being laid off, the market has also witnessed brokers voluntarily leaving the profession due to insufficient income. This presents a new challenge for companies in the industry – finding brokers to sell their properties.
Pham Anh Khoi, the Chief Economist of Dat Xanh Service, acknowledged that the past two years have been extremely challenging for brokers in general, including those at Dat Xanh Service. The company has made significant cuts to its workforce, with some subsidiaries reducing staff by 60-80%. Additionally, many brokers have switched to other professions. Despite the difficulties, the cost-cutting measures have been beneficial for Dat Xanh Service.
Khoi emphasized the importance of being quick to adapt to the changing market conditions. He stated that brokers who make swift adjustments are more likely to survive in the industry. On the other hand, those who cling to high costs without having properties to sell will soon run out of money. Therefore, it is crucial to act swiftly.
When asked about the timing of rehiring, Khoi explained that brokers only need one thing – properties to sell. As soon as there are available properties, there will be brokers to sell them. However, the timing depends on when developers release their properties. Currently, the market is no longer concerned about a decrease in demand or customers experiencing losses or job cuts. These issues have hit rock bottom, leaving brokers with just one worry – finding people to sell to.
Khoi expressed concerns that by the end of 2024, if developers rush to release properties, there might not be enough brokers to handle the demand. He mentioned a recent situation in Hanoi where several small developers returned with new properties and requested rehiring; however, the company was unable to recruit enough brokers to meet the demand.
Signs of a turnaround in the real estate market are already emerging. According to VPBank Securities, research companies expect a significant recovery in the second or third quarter of 2024. Policy improvements, such as the passing of Housing Law, Real Estate Business Law, and Land Law, have already given a boost to the market. The current interest rate for new real estate loans is approximately 11.6% for a 12-month loan term, making it attractive for borrowers. Despite the challenges faced by real estate companies, there have been improvements in various aspects, especially in fundraising.
VPBankS experts believe that the real estate market will gradually recover from its low point in 2023. This recovery will be driven by the improving investor sentiment and the initial policy changes. They predict that the market will flourish based on the following indicators: a decrease in lending interest rates, removal of legal barriers, and the confidence of homebuyers and developers in launching new projects.
Furthermore, the affordable housing segment is expected to play a crucial role as it benefits from various government support policies.
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