Are real estate brokers in India looking for Jobs now? Time will tell

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Real estate brokers in Bangalore and Mumbai have been diversifying lately. A thriving, small time real estate broker we knew has taken the retail route and now runs a superstore in Bangalore. Earlier, he would sell ten residential apartments a month and rent out another five. Come 2011 and business has been dropping steadily and is at 40% levels when compared to 2009-10 years. 


In Mumbai too, small real estate brokers with a setup of three to five employees have started laying off their blokes. They now want to branch out to starting small food joints, pubs and specialty stores to keep the cash registers ringing. In the first quarter of 2011, home sales dropped 17 per cent in Mumbai, 14 percent in Bangalore and 15 percent in Hyderabad. According to consultant Jones Lang La-Salle, unsold residential units in projects that are complete or are nearing completion in 6-12 months in Mumbai and Delhi-NCR are as high as 25 percent and 16 percent, respectively. In other big cities, including Bangalore,Chennai and Kolkata, the numbers range between 12 percent and 19 percent. Sales in tier-II and tier-III cities are steady, though there is some panic due to the increase in interest rates, which have climbed to about 11 percent from 8.25 percent a year ago.


The large and established brokers can still sustain but for small time brokers, the competition is heating up to uncomfortable levels. My local tea shop owner had a signboard saying "PGs, flats for rent" for a while but apparently, no business was generated despite hard work and lots of money spent advertising locally and conducting site visits. Even the motorcycle he had bought for the same is doing sterling duty ferrying milk and bread to his little store. Trust us, we doubt there is anyone in India who does not know a real estate broker personally. There are so many of them!


Are these the little signs? Add to that marketing personnel from real estate companies putting in their papers and starting on their own. We hear of one such story every week. For every project these days, there are at least a couple of dozen brokers, both large and small. Its come to such a state that individual direct home buyers have openly started asking for a discount that the developer would otherwise have paid to the brokers! On the other hand, brokers have started offering cash back discounts to their buyers from the brokerage they receive for the sales done. Anything to get that customer sign the cheque.


It does not look like a good sign to us. But for now, we leave it at that. Time will tell. You think otherwise? Leave us your feedback in the comment form below. We would be glad to hear from you!