Over 38,000 property agents are now licensed to work in Hong Kong, with the number set to rise as the city’s two dominant agencies Centaline and Midland hire aggressively to expand. The city’s two dominant realtors are opening a record number of branches and offices throughout the city, taking advantage of a real estate boom that’s sent prices to records month after month, boosting their fee income.
Developers are scheduled to bring a record 19,000 new apartment units to the market in the second half, prompting agencies to hire aggressively to bulk up their sales force in preparation for the additional supply. According to the Hong Kong Estate Agents Authority, as many as 38,042 property agents are now licensed to work in the city. The number of applicants have risen for three straight months, as agencies aggressively expand to gear up for growth.
“We’re accelerating our scale as it’s now a winner-takes-all market,” said Centaline Property Agency’s residential managing director Louis Chan, who’s expanding his sales force by 8.6 per cent to 6,300 agents in 440 offices by the year’s end. “In Tsuen Wan alone, we added 10 branches this year, mostly next to the exits of the Tsuen Wan West” subway station, he said.
Centaline’s main competitor Midland Realty is keeping up, adding 23 offices to its network this year, with another 37 in the pipeline. The agency is aiming to expand its sales force to 5,000 agents across 300 offices by the year’s end, said its residential department chief executive Sammy Po Siu-min.
Hong Kong agents’ commissions typically range between 2 to 4 per cent of the sales price of new apartments. For second-hand units, the fee is 1 per cent of the sale price, paid by both the buyer and the seller.
Business has been good for both Centaline and Midland. Centaline is aiming for HK$4 billion in commission revenue this year, a 14 per cent growth from a bumper year in 2016. Midland’s fee revenue last year jumped 30 per cent to HK$5 billion (US$639 million). Real estate and construction contribute a combined 10 per cent to Hong Kong’s gross domestic product (GDP) in 2015, according to government data, with the property industry employing 130,000 people, or 3 per cent of the city’s work force as of March.
June was a record month for the world’s most expensive residential property market, with prices rising for 15 consecutive months, soaring 21.6 per cent from the same period last year, according to Hong Kong’s Rating & Valuation Department. Buying was whipped up to such a frenzy this year that some developers had been able to sell their projects in phases, increasing prices by up to 20 per cent between the phases within weeks of each other.