Policies turn on the heat for real estate agencies
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Employees of a real estate agency loitering outside their office in Beijing as property sales slow down. House prices in China's 70 major cities grew 10.3 percent year-on-year in July, the slowest growth pace since February this year. [China Daily] |
It's a searingly hot, sticky afternoon in Beijing's Changping district and several real estate agents in cheap business suits are lolling about on old plastic chairs in front of their office in Tiantongyuan, the largest residential community in Asia with a population of some 300,000.
Despite the mercury approaching 40 C, the air conditioners and half of the company's computers are shut down to save electricity. Posters of properties for sale are fading, rendering their wording hard to read.
Huang Meiqing, a 24-year-old real estate agent from Jiangxi province, is exhausted by the sheer inactivity the agency has endured for several weeks. She has a heat rash on her neck and back and no appetite for her lunch of egg pancake.
The lack of business followed the implementation of government policies designed to cool the over-heated property market earlier this year.
"Six colleagues quit the job in the past four months and now only five remain. In 2008, our agency employed about 25 people," Huang said. "I used to be a star agent and sold as many as seven apartments within a month. I didn't think much of earning 100,000 yuan a year in the past."
With an air of despair in her voice, she added: "For the past two months I have been obliged to write zeros on my performance records. It means I only get the basic wage of 1,000 yuan a month. I only finished middle-school education and it is very hard for me to find another job with such low entrance requirements in the capital."
According to the National Bureau of Statistics, housing prices in the nation's 70 major cities grew 10.3 percent year-on-year last month, the slowest growth pace since February this year.
The number of property sales in Shanghai, Nanjing and Hangzhou halved in the first six months of the year, while those in Beijing dropped 40 percent, according to statistics from the policy research center under the Ministry of Housing and Urban-Rural Development and China Index Academy.
The figures have drawn a question mark over the future for Huang Meiqing, and many other employees who are working in China's real estate industry.
A recent report published by Career International Consulting Ltd showed that after the government's policies came into effect, Chinese property agencies and property sales companies witnessed a 20 percent turnover in employees in the past few months.
The report is based on a survey of 327 Chinese property developers, real estate agencies, property sales companies, property management companies and other related commercial enterprises.
Chen Xiaoman, business development manager at Career International, said: "After the new regulations were implemented, we saw that most pressure on employment in the property sector was exerted on real estate agents and sales people, since the entrance requirements are relatively low.
"Those employees have poorer education and less experience in the workplace. As a result they are more vulnerable to any external impact on the market."
During the prosperous years of China's real estate market, a great number of job hunters with limited education and abilities swarmed into the sector. However, when the future of the market became increasingly gloomy owing to the uncertainty of sales and prices, a huge number of them forced to quit, Chen said.
However, the property development sector, the core group of the real estate market, only saw 10 percent employee turnover because the entrance requirements for such enterprises are relatively higher, according to the report.
The survey also revealed the highest staff turnover occurred in accounting, human resources and marketing, with a figure estimated at about 15 percent. That number was only 2 percent among high-level management staff working in innovation and development, engineering, investment and cost control.
Ellen Yang, a manager specializing in the property and construction sector at Career International, said that although house sales are still flat, the property developers are not cutting back on building new projects. Many companies have adopted new strategies by adjusting their business focus from residential projects to commercial projects. "That doesn't lead to large job-cutting or salary decreases," said Yang.
Property sales companies and real estate agencies derive most of their income from commissions, and so their earnings would shrink substantially, Yang added.
Huang Meiqing said she was thinking of changing jobs like her colleagues because her current 1,000 yuan monthly income is an inadequate sum to live on in Beijing.
Yang warned, though, that salespersons or property agents do not have much to offer if they switch to another industry.
She suggested it would be wise for them to improve their abilities, for example in their knowledge of the overall market and improving their understanding of customers' needs.
"They should not just regard themselves as sales people but should try to learn about the upstream sectors of their business and acquire more experience," she added.
According to a recent survey by Zhaopin.com, the leading Chinese online human resource provider, since the government's property policies were put into effect and the volume of houses sold consequently fell, estate agencies across the country have not started curtailing their recruitments of sales staff.
A manager of a property agency surnamed Di said: "Because we have fewer clients and some agents are leaving for other jobs, we have to employ more than before."
Nonetheless, the average number of applications for each vacancy was 26 in March but it decreased to 9.9 in June. Analysts from Zhaopin.com said the decline showed a lack of confidence in employment in the real estate employment sector and that competitiveness had been reduced.
The survey also showed that the property sector ranked third in the list of sectors in greatest demand for talented people in the first half of 2010, coming after sales and marketing.
Commenting on many job seekers' concerns over a possible career in the real estate industry, Yang said it would be not risky for experienced candidates to enter the industry in the current climate, except for certain specific sales positions.
For new graduates who possess relevant qualifications, different companies with projects at different stages would take various attitudes towards newcomers. For example, there is now a great demand, opportunity and career development for those who specialized in architecture.
Career International's report showed that 57 percent of respondents were bullish about the future of the industry and felt satisfied with their career choice.
"Although the real estate industry has been influenced by the external economic environment and government policies and is experiencing some short-term fluctuations, it is still a developing industry with a stable perspective," Yang said.
Annual compensation for people in the real estate and construction industries was the second highest surveyed, at 86,700 yuan. It was behind the financial and insurance industry in which the average pay stood at 97,000 yuan per year, according to a wage report by Zhaopin.com, in which 5,866 large- and medium-sized Chinese enterprises including foreign-funded companies, private as well as State-owned, were surveyed.
The three highest average monthly salary for graduates offers went to those starting in finance and insurance, computer-related fields and real estate or construction, amounting to 3,027 yuan, 2,901 yuan and 2,771 yuan, respectively.
Yang added that the whole industry would maintain stable but some companies would take the chance to optimize their human resources by eliminating staff with bad performance records and hiring new talent.
About 66 percent of employers said they had difficulty recruiting for some key positions, especially the job of general manager, according to the report by Career International.
Yang suggested that companies of all kinds should work out a long-term strategy to maintain reserves of talent at different levels and with different specializations.
"A competitive salary system and training mechanism are also crucial for attracting talent and maintaining excellent human resources," she said.
The report showed that about 67 percent of employees in the real estate industry said they attached most importance to the enterprises' land reserves and the quality of property projects when making their career decision.
