Ever since the end of the summer last year, the real estate started to feel the pinch of the financial crisis. Now, the entire system is in a dramatic resting point – scarce leasing agreements and real estate deals, while the market giants start loosing their key-customers one by one, key customers who once made profits piling up.
As human resource specialists say, the domino effect has taken hold of the real estate market’s human resources. The top companies in the marketplace reported worrying losses as demand dried up.
Regatta real estate advisor reported 5 million euro business for 2008, 37.5% poorer than managers had expected. Meanwhile, other market players were seeing their profits taking dramatic nosedives amid worsening market conditions. CBRE recorded a profit contracted by 80% while Colliers International, the biggest player in the local real estate advisory marked 17% lower business than a year earlier.
Therefore, brokers’ bonuses in real estate, calculated on the executed transactions, fell dramatically. In case of small businesses, the headcount was halved, and in some cases they even dropped out of sight.
“Nearly 200 firms a month were padlocked in November-December. Freelancers and small companies were the first casualties. This is a positive consequence of the financial crisis for large companies, because they didn’t and will not go bankrupt,” said Laurentiu Munteanu, manager of Activ Imob advisor.
Although it is hard to say accurately, Laurentiu Badea, managing partner of Epsilon Imobiliare and former employee of CBRE Eurisko, said that roughly 15-20% of real estate companies went bankrupt. Therefore, the number of brokers shrank by 30-40%. “There were many freelancers. I am aware of the recent layoffs operated by large companies”, Badea stressed.
Bogdan Georgescu, managing partner of Colliers International says
