Becoming a millionaire property sales agent is not easy to achieve but it is possible. Midland Realty (Holdings) Ltd (Midland Realty), Hong Kong's only listed property agency, had at least 20 top salesmen earning an annual income of over HK$1 million in 2003. One of those successful agents, Lieman Leung, alone generated nearly HK$10 million in turnover after handling 41 commercial outlet transactions on Hong Kong Island last year.
Kitty Ip, executive director of Midland Realty, predicts luxury apartments and commercial units will perform well this year. She forecasts property prices will rise 15 percent and sales of new and second-hand properties are expected to reach 32,400 and 66,000 units, an increase of 17 and 40 percent respectively compared to 2003. With present prices, mortgage payments are still less than monthly rental income, giving an average yield of 5.5 percent, she notes.
In the past, the ratio of new to second-hand property sales was 4:6. This year, it is expected to be 2:8. "This is because developers are not in a rush to sell and want to raise the prices," says Ms Ip. The higher proportion of second-hand sales also reflects a lively market. "Agents have to 'fight' for new flats from developers as the demand is so strong. This can be seen at the new luxury residence 'The Cairnhill' in Tsuen Wan," she explains.
Ms Ip stresses that the market has already revived and property prices have resumed an upward movement once again. Prices have been increasing since April 2003, the lowest point hit during the SARS crisis last year. "This upward trend is not a temporary effect like in 1998 and 2000 when it was only sustained for two to three months. The average price of second-hand residential property has gained 24 percent last year, from HK$1,854 per square foot in April to HK$2,292 in December," she notes.
With the government allowing the market a freer hand and deciding to resume limited land sales, confidence has been boosted and the low interest rates available from banks have also improved buyer sentiment.
Right after the SARS crisis, Midland Realty announced a plan to open 100 additional branches and employ 1,000 extra staff by late 2004 and, with 35 new branches already operating, the expansion is well on track. At present, the company employs about 3,500 staff with a total of 224 branches, out of which the majority are under Midland Realty Agency, while others are under Hong Kong Property Agency, subsidiaries of Midland Realty. "Our target is to increase market share from the present 30 percent to 40 percent," says Ms Ip.
To attract more quality sales agents, Midland Realty Agency recently introduced a 12-month executive trainee programme designed for university graduates. Candidates first have to complete a two-month 10-module on-the-job training course and pass the Estate Agents Authority's exam. After obtaining a licence, they are guaranteed a monthly income of at least HK$10,000. For ten further months, they learn about the industry and its workings and how to deal with and resolve practical sales difficulties.
Executive trainees' performance is then monitored for another 12 months before they have a chance of promotion to supervisory level. Training in the second year will continue to be practical and comprehensive.
Shirley Leung, manager of Midland Realty's human resources department, says the annual trainee programme, with a quota of 50, is offered because no tertiary institutions in Hong Kong have specific training for real estate agents. "We are liaising with universities and give talks to persuade undergraduates to consider joining our programme after graduation," she adds.
Ms Leung points out that well-educated agents with good language skills, analytical ability and a logical mind can communicate better with clients. This is particularly important when they are required to give presentations about the sale of properties in luxury apartment developments.
A successful property sales agent, Ms Leung says, must be aggressive and possess a never-say-die attitude. He must also be able to build up a good network of contacts in order to get big deals and referrals. Being well informed enables an agent to keep in touch with industry changes and be more alert in problem solving. Good knowledge of city planning, infrastructure, architecture, as well as fung shui is also an advantage.
The average monthly income for most sales agents is around HK$22,000 of which HK$5,000 is basic salary. Midland Realty has separate teams in charge of new and second-hand properties but locations for work all depend on an individual's preference and the vacancies available. Ms Leung says that working in districts with more luxury apartments or high-value commercial properties does not necessarily mean better income and business opportunities for a sales agent. "Districts with ordinary flats usually have more transactions than those with luxury apartments," she explains.
The number of property agent licence holders dropped from 17,000 in 2000 to 15,000 last year. Ms Leung predicts, however, that the figure will bounce back to around 17,000 this year. Form 5 graduates are eligible to take the qualification exam.