What is it about the property industry that keeps you engaged?
Everyone wants to own property, even the youngsters, except in the past we’d start with an HDB flat and now people are starting with private property. And having been in this line, I like to look at beautiful properties and look at their layouts.
I also believe the value of property investment in the long run will definitely appreciate, and you’re able to preserve wealth better, compared to putting money in the bank, where the inflation rate may be higher than the interest rate. Owning property is able to hedge against inflation, and I think it’s a good form of compulsory savings for everyone.
And especially in Singapore, it’s a small island, the population can increase but not the landmass. Of course, you can do reclamation, but how much can you do?
The demand for housing here will be heavy compared to other countries, where you can expand into the nearby areas and build another city or town. In Singapore, there’s no way to do that.
“There are three key factors to the company’s growth: recruitment, training and retention,” says Mr. Jack Chua. “And once you’re able to practise all three, you’re able to grow the company.”
Since he joined ERA Realty in 1990, Mr. Chua has seen the company expand over the decades, from a small outfit to one of the largest real estate agencies in Singapore. Recently appointed executive chairman of the Singapore-listed Apac Realty, which holds the exclusive ERA regional master franchise rights for 18 countries in Asia Pacific, he oversees 17,800 salespersons across more than 600 offices throughout ERA’s operations in Japan, Korea, Taiwan, Thailand, Vietnam, Cambodia, Malaysia, Singapore and Indonesia, with a joint venture in China.
Formerly a quantity surveyor, Mr. Chua served under the former Public Works Department of Singapore after being awarded a PSC Scholarship, and after his six-year bond was fulfilled, he joined the real estate business and hasn’t looked back since. “I could have gone back to the quantity surveyor line, but I would have still been an employee, so I thought I'd do a bit of sales, and I like property,” he recounts. “When the company grew, I became a full-time employee. In fact, if you ask me, until today I have had no promotion, because all the time I’ve been in this position, but it's only that the company has grown.”
What is it about the property industry that keeps you engaged?
ERA is holding on to the rights to franchise in 18 countries but is only operating in 10. Are there any plans for the remainder?
We definitely will start to open up, but it also depends on the timing. In China, I only have a joint venture in the province of Hainan, but for the rest of the mainland I don't have anything yet.
Because our concept here is to offer no basic salary for the agent; it's a different type of business model. In the past, if you told people that there's no basic salary for a salesperson, they probably wouldn't accept that in China because their business model is more often a basic salary plus commission.
But I believe they're able to accept it today. We also have the franchise rights to Australia and New Zealand, which we have not opened up yet, because of limited resources, especially before the listing. But now that we are listed, I think we'll look into the directions we’ll be expanding into and start work on those.
Where is the company headed?
With the listing, we put out three directions we're looking at growing towards, to strengthen and expand the business in Singapore and in Asia Pacific, and build up our IT capabilities. We’ve acquired a building in Toa Payoh to serve as our home base, so this will strengthen our image and give people the impression that we have strong foundations.
We’ve also done a merger with CBRE Realty Associates (in September 2018). This year we acquired back our ERA Indonesia franchise company, so that it’s now a wholly owned subsidiary, and we also acquired 80 percent of the ERA Thailand franchise company. The rationale for this is to further build the business.
And for IT, if there are certain companies that we feel are good and have potential and synergy with ERA, we may acquire them. (In June) we announced the collaboration with UrbanZoom, a website that does property reports for customers. If you have a property and you don’t know how much it’s worth, you can type in your address and the site will send you a free report, and if you decide to buy or sell, the site will qualify you and refer you to us. This is part of what we call the Digital Lab Initiative, the company’s investment program.
Why is there such a strong focus on enhancing its capabilities?
I suppose that’s the future. A lot of people say IT may replace us, but I feel IT helps increase the productivity of the agents. In the past, when you read property descriptions in ads, you couldn’t visualize the space, so you’d have to visit ten properties to select one you liked. And the odds of that succession is one in ten.
But nowadays, with technology, you can take 360-degree views of property listings, see the environment and even walk through the units. For example, instead of touring ten properties, maybe you only need to view three in person, and you can close on one.
What are your thoughts on consumers heading to online platforms to purchase real estate?
We are looking at such things, but I personally feel that from the market data, it's hard to buy property through a website. It’s unlike buying clothes online. One of the cheapest properties you can find in Singapore, a three-room HDB flat, may still be about $300,000. You can’t just buy it and then decide you don’t like it, so you still have to look at it.
And then there’s negotiation. It’s very hard to put a seller and buyer together to negotiate. You need a middleman, and that’s where the agent comes in. Until such a time when AI can do all the negotiation, it's possible but may not happen tomorrow. I believe one day we’ll be disrupted, and if that happens, the role of an agent may change to become that of an advisor, because an advisor is hard to replace with artificial intelligence.
To get agents ot the level of serving as advisors and consultants, what needs to be done?
We provide training, and we now have a program to equip agents with the skills to do estate planning. This we apply to all agents, and for the agents under the Plush by ERA initiative, the training is applied at a higher level because they manage HNWI.
What's your approach to mentorship?
We still talk to the agents to get their feedback on the industry so we can come up with programs. In the agency business, my agents are my customers and not my employees, and the sellers and buyers of property are the agents’ customers, so I have to talk to the agents and find out what they need.