Half of real estate agents lose their jobs amid market slump

The medium-sized company, which offers brokerage services in HCMC and southern provinces, was operating perfunctorily since late last year, and the situation deteriorated further in April this year when banks announced credit tightening, he said.

Transactions have dried up since May. Property sales were not good while marketing costs ran into billions of dong (VND1 billion = $42,400), and so developers delayed payment of commissions to the company on even the meager number of units it sold.

It had to start sacking staff by September, starting with a few dozens before laying them off by the hundreds amid reports that the market could be even worse in 2023.

“Now I work as a collaborator with the company without a salary, but I have failed to do any transaction for the past four months,” Khang said.

He does get unemployment benefits and is learning about other professions in the hope of switching to some other industry.

Khang’s plight is a common one now in the HCMC real estate market though the fourth quarter is usually the peak sales season.

Pham Lam, vice chairman of the Vietnam Association of Realtors, said HCMC has more than 100,000 realtors, including 20,000-30,000 working for professional organizations. Some 50% had lost their jobs as of December, he said.

In August, a small real estate trading floor with 50 brokers rented premises and spent hundreds of millions of dong on furniture to become a sales agent for a developer of mega urban projects in the central and southern regions.

But by October, the principal was in financial trouble and the market was quiet, and the floor had to close with most of its brokers quitting by mid-December.

The sales director of a brokerage that has laid off 100 employees said brokers have virtually no income if there are no transactions because they only get a token salary.

The head of sales at a large brokerage in District 1 said the number of agents is down by more than half, and those remain are anxious because they do not see any signs for optimism for at least the next six months.

Many cash-strapped developers have failed to pay the brokerage and so real estate companies are forced to lay off staff or accept losses, he said.

If things continue in this manner, more layoffs are inevitable, he added.

An online survey by property website Batdongsan of around 500 brokers found that in the fourth quarter real estate trading floors cut their workforce by 61%.

Lam said the number of agents fluctuates every year, decreasing in the low season and increasing in the high season, but this year there has been downsizing even during the peak season. “The market slump is a challenge for brokerage firms that are not competitive enough but an opportunity for professional ones to develop more sustainably.”

Many analysts forecast the challenge to be bigger in 2023, especially in the first six to eight months, with more brokers potentially losing their jobs.

Hanh, who lost her job at another city-based brokerage that had a staff of over 1,000 two months ago, said it owes employees more than six months’ salaries.

Expecting the difficult situation to prolong, many of her colleagues quit. Hanh and her colleagues were optimistic in the fourth quarter of last year when the Covid pandemic was brought under control and there were transactions from time to time albeit revenues were not very high.

But a year later the realty market had become quiescent. Hanh said: “My family has four people. I had to quit my job to find a way to make ends meet.”