Professor Raymond Tse Chairman Hong Kong Institute of Real Estate

The property market and its affiliated industries have become synonymous with the remarkable rise of Hong Kong over the past few decades. Similarly, this sector has been badly hit by the economic downturn, but Professor Raymond Tse, Chairman of the Hong Kong Institute of Real Estate (HKIR), believes that Hong Kong has already seen the worst and that prospects for property professionals can improve soon.

"The property market has just about bottomed out," he says. "It is closely linked to the economy, and we can already see signs that the economy is picking up, such as in increased visitor figures."

Five years of falling property prices and declining transaction volumes have taken their toll and Mr. Tse has noticed a distinct decrease in the number of people enrolling in HKIR revision courses for Estate Agents Authority (EAA) examinations. He attributes this to the number of people leaving the sector and not being replaced with new recruits.

"This is probably not the best time to start out as an estate agent," he concedes. "The secondary market is still down, and the environment for agents is very tough. The problem is exacerbated for smaller estate agents, as most transactions go to the two large ones: Midland Realty and Centaline Property Agency. In addition to this, many of the medium sized agencies have been bought out by these two, further squeezing the market."

Although established property agents can rely on their experience, product knowledge and pool of clients to see them through the bad times, fresh recruits face a difficult and potentially demoralizing task in getting an industry foothold.

"If you really want to join this sector, it would be best to start out with one of the big two, as there will be far more opportunities initially," advises Mr. Tse. "In the primary market, most of the developers outsource their sales to the big two agencies, and if you are talented there are still opportunities to make sales. By starting out with one of these companies you can get the basic training and also a feel for the industry."

Getting Certified

Part of this training is obtaining the EAA qualification that allows you to work as a property agent. It turns out that there is a small loophole in these statutory requirements; it is not actually compulsory to complete the exam since unqualified staff can execute much of the basic work of a property agency so long as an EAA graduate signs the final paperwork.

Despite this, the onus is on property agents to gain the qualification, as it is generally a requisite for promotion within a company, not to mention receiving commissions for completing transactions.

"The situation as it stands now is quite good for the prospective agent, as you can start out with a company, get a feel for the job and train for the exams at the same time," notes Mr. Tse. "This way, if you decide after a few months that being an estate agent is not what you want, you can switch careers without having invested too much time or money in training."

The EAA examination was introduced in 1999, and serves as an additional regulatory measure to ensure that common standards are met by property agents. Mr. Tse recognizes the value of the qualification to the industry, but suggests that the actual examination of candidates be somewhat more rigorous than the current system.

"The EAA syllabus is comprehensive, but the examination is only in multiple choice format, and is therefore not that difficult to pass," he observes. "There is perhaps a need for a written examination to supplement this. For example, when drawing up contracts - an important function of the property agent - there is a strong need for written skills and legal knowledge. Many transactions cause problems for both parties because certain parts are not completed correctly, or are ambiguous as to what is included. Although there is a generic format that can be followed, many transactions have specific clauses that can affect a deal, such as for fixtures and fittings, contract length and date of commencement."

Taken from Career Times 2002/08/23