According to Tran Khanh Quang, General Director of real estate investment firm Viet An Hoa JSC, the supply of new housing in Ho Chi Minh City has dropped more than 60% this year which has caused 3,000 to 4,000 real estate agents to HCMC to quit their jobs since the beginning of this year. Most of these real estate agents have decided to proactively leave the market instead of competing for sales against other agents.
Quang said, “If in 2017 there was one housing unit sold between three real estate agents, in 2019 there was only one between eight. With average commissions at 1-1.5% of the total contract value, some real estate agents end up being unable to cover their living expenses.” Another 6,000 real estate agents have taken on additional part-time jobs in order to cover living expenses. These people maintain their status as contractors to real estate companies, but because their incomes have decreased significantly, they’ve had to take on part-time jobs in order to survive.
According to statistics from the Ho Chi Minh City Real Estate Association (HoREA), the number of real estate agents in HCMC was estimated at 10,000 in 2015 but increased to 60,000+ people by the end of 2018. The increase corresponded with a 3-year period that saw multiple new developments come online as well as plans for other major developments being announced.
These factors encouraged many people to become involved in real estate sales, or as marketing and operations staff, but the lack of new projects today is causing many of these people to leave the industry.
Another factor in the growth and decline in real estate agents in the city is that there are few, if any, professional requirements needed to become an agent, accept being able to talk to people and convince them to buy into selected projects.
During the peak years of 2016 ~ 2018, salaries and commissions for successful agents could easily reach 1 billion VND per year ($43,200 USD) and for senior real estate agents, salaries and commissions could be 3 or 4x higher.
HoREA says that many of the real estate agents leaving HCMC are moving to other provinces to sell new projects that are in development, but that they hope to come back to HCMC in the future when new developments come online.
HoREA says that that after reaching a five-year high of 83 developments in 2017, the number of housing projects fell to 59 in 2018. This year, the number of completed units in January through September of this year fell 53% from last year, to 12,453units, while only 12 new projects were approval, a 72% decline year-on-year.
Quang, from Viet An Hoa sums up the situation and says, “We are now in December, the peak time for year-end sales in the real estate market. But there are no signs the market is picking up, so it is likely that another 10 percent of real estate brokers in HCMC, equivalent to 6,000 people, will quit next year.”
For real estate agents who are able to stick with it, less people means less competition, but the lack of projects is the factor that’s going to really effect their incomes.