Li Hao

    THE number of real estate agency branches had fallen by more than 70 percent to about 2,200 since the beginning of the year, according to the city’s real estate association figures.

    In June, small agencies resorted to reducing the number of branches to survive in a sluggish housing market. The medium-sized agencies followed suit in August. The trend was now started extending to the bigger agencies.

    He Xiaoli, manager of the Centaline Property Agency Limited, said the company could still make ends meet before September when new property was being traded in Shenzhen. However, since the sales volume began falling sharply, the company had decided to lay off more than 800 employees.

    He said there would be no significant improvement in the city property market in the next six months.

    He denied a recent rumor that the company would lay off 2,000 employees.

    “Centaline has about 380 branches throughout the city, many of which were inactive in the sales slump,” said He.

    Centaline would close inactive branches and send staff to active branches to seek a bigger market share.

    He said monthly operational costs of an outlet was 150,000 yuan (US$23,000), which could be recovered by trading at least three pre-owned apartments each for 1.5 million yuan.

    Another major player, Zhonglian Real Estate, had closed some branches which went beyond means.

    Yan Gang, vice president of Zhonglian, said the company closed outlets in areas where there were clusters of upmarket housing and turned attention to branches in areas of Bao’an and Longgang where prices were lower but there were larger populations.

    Real estate analysts said it was inevitable for small and medium-sized agencies to reduce the number of branches or go bankrupt. Large property agencies also had to make adjustments to compete for limited market share.