Of the 80,000 real estate agents operating in Spain in the summer of 2006 just 25,000 are still in business, according to an article today in the Spanish daily La Vanguardia. That means that 70% of estate agents have closed in the property crash, destroying 180,000 jobs in the process.
The bloodletting is not over. Industry experts cited in the article forecast that another 5,000, or 20%, will close this year, leaving just 20,000 in business at the end of 2009.
Many of the estate agents that have closed were ‘chiringuitos’, or one-man bands with no qualifications working with nothing more than a car, a website and a mobile phone. “The great majority of Spain’s real estate association members (API) are still open,” claims Joan Ollé, president of Barcelona’s API association.
Estate agents in Catalonia are expected to have a rough year thanks to a new regional law obliging them to register with the government and take out professional indemnity insurance. Ollé expects the new regulations, which come into force after the summer, to drive half the agents in Catalonia out of business.
Estate agents are being hammered by an 80% fall in transactions since the peak of 2006, a fall in property prices, and the increasing number of developers going bust owing estate agents commissions.
The big chains of estate agents, where a franchise model is common, are suffering as much as any. Expofinques, MC, and Don Piso are all in administration, Fincas Corral was sold for just 1 Euro, and Coldwell Banker, the biggest real estate agency franchise in the world, has abandoned Spain after opening 60 shops. Tecnocasa, the biggest franchise real estate franchise operation in Spain, has gone from 1,400 offices in 2006 to 308 at the end of 2008.