Negotiators Certification Course Day #1
If you are thinking about joining the real estate industry, the first step is to attend a two day NCC organised by MIEA or an approved training academy. You can search for available NCC dates in your state at the MIEA website here.
What is in the 2022 NCC syllabus?
My MIEA NCC#600 course presenter, Lim Boon Ping, a previous President of MIEA but better known as the social media influencer “Cooking Ah Pa” was MIA. His nice last minute replacement Kelvin Yip, who I met this morning said “Cooking Ah Pa” was down with COVID 19. I hope “Cooking Ah Pa” gets well soon - he is my original inspiration for starting my own cooking blog, Cooking4Seniors.
The day began with a general introduction and overview of the Property Market in Malaysia by Kelvin who is an REA (Registered Estate Agent ) and an Associate Director at Knight Frank. Kelvin has 27 years’ industry experience. See pictures below for the syllabus of NCCs I attended in August 2022 and at Hartamas Academy in 2017.
Kelvin also showed NCC#600 course participants a slide, “What Affects The Property Market” with 10 factors that “influence the property market in Malaysia”. As a high end property market investor with more than 20+ years experience I disagreed with some of factors on the slide. But it was too early in the day to start nitpicking on someone’s presentation.
🤠’s Dua Sen : I think what’s missing in the introduction section’s charts on Supply and Demand are these 5 industry statistics :
1.9 million homes are currently vacant ie unoccupied out of the 9.6 million residential units that have been sold to home buyers.
At more than 70%, Malaysia’s home ownership rate ALREADY exceeds homeownership rates in UK (62%) Germany (51%) and Switzerland (38%) But unlike those countries, Putrajaya still encourages homeownership by offering tax incentives to first time home buyers. I wonder why our PM and Finance Minister are so nice? (these tax goodies are paid for by the 16% of Malaysians who pay tax, by the way). Maybe there is a GE soon and they covet the FTHB vote bank?
According to NAPIC, Malaysia has a huge property overhang of units that have been built but remain UNSOLD. See picture below. These figures are in addition to the 1.9m units that were SOLD to home buyers but remain vacant or unoccupied.
A chart showing Ringgit depreciation versus SGD over the past 20 years. I think but cannot be 100% certain the Ringgit’s huge depreciation against Red Dot Island’s SGD is a major reason for the lacklustre performance of the high end property market in KL. Unlike the mass market ie properties in Shah Alam, Puchong and Ulu Kelang, the high end KLCC property market segment depends on foreign buyers from China, Hong Kong and Red Dot Island and a dwindling expat tenant pool.
Average salaries of real estate professionals after 5 years and 10 years. Under existing rules, RENs cannot be paid more than 40% of earned commissions. Anecdotal evidence however says it is the 16common industry practice to pay out up to 90% or more to top performers. Kelvin said MIEA has been trying for years to get the Minister in charge to agree to change the maximum percentage from its current 40% of earned commissions.
Conclusion: A good introduction to the real estate profession must be realistic, IE. no sugar coating the tough competitive business of finding quality listings and buyers/sellers.
Yet, to attract fresh blood into the industry, the positives also need to be emphasized , for example, 16 real estate agents earned RM1m last year, no degree required to get started in an industry where 28 year old RENs can buy RM100,000 watches, etc
Is the real estate agency business a sunrise or sunset industry?
Kelvin also showed NCC participants a slide of the numbers of real estate professionals.
Based on the registration numbers of real estate professionals as at 2022, there are :
2893 Registered Estate Agents
3145 Probationary Estate Agents
28247 active Real Estate Negotiators.
Attrition rates for active RENs in the industry are very high. Anecdotal evidence I collected suggests 1 out of 2 RENs exit the industry after the 1st year. By the fifth year, 4 out 5 real estate professionals have quit the industry, according to a US real estate coach.
So if you are a newbie REN that has completed NCC, should you apply to a big real estate agency which provides online training opportunities in and toolkits for its hundreds of RENs but might be impersonal or to a small or mid sized agency where the boss might have time to mentor newbies?
Which gives you a better chance of survival in a challenging and competitive business?
ESP Global’s CEO Aldrin notes that over the last eight years or so, the business model of real estate agencies in Malaysia has undergone disruptions and it is getting more challenging for small to mid- size firms to remain competitive.
“While there are a few schools of thought on what the future lies and what model would prevail in this decade, one general consensus is, size matters, in terms of agent counts and revenue. Thus, my opinion is that the market is moving towards larger platforms or agencies, and we could see consolidation and mergers of mid-size firms in the near future,”
says Aldrin. Another real estate agency head, Group GM Andrew Tan of MLP Property Consultancy thinks real estate agencies need to be constantly attuned to the evolving digital trends and strategically incorporate these elements into the business.
🤠’s Dua Sen : In my blog for newbie real estate professionals I provide valuable tips on how RENs can use digital marketing strategies, “Digital Marketing Playbook For Real Estate Part 1/3” and “How To Stand Out And Win Listings” Part 1/5.
Marketing tips for real estate professionals are also available on my Personal Facebook page. See my FB profile here and at 360 KLCC, my high end KL property blog.
Post Script & Disclaimer
1 Some readers of my property blogs 360 KLCC and Real Estate Marketing 101 might know I attended a two day NCC at Hartamas Academy in 2017. Read what happened after I got my NCC certificate of attendance here.
2 My take on how digital transformation is impacting the work of real estate agencies and agents:
3 The in person NCC course at a hotel ballroom complies with prevailing COVID 19 guidelines as at August 2022 - that's why all the participants are masked.
4 MIEA past President Lim Boon Ping was Real Estate Agent Of The Year 2022.
Residential Property Overhang 2021, source Star Property & NAPIC: Does not include serviced residences under commercial title
