Why the Property Industry Was Designed to Burn Agents

Can AI Replace Agents The Real Treat Behind Proptech

If most property agents were failing because they were lazy or incapable, the solution would be simple: better training, better motivation, better discipline. But that's not what we see. What we see is something far more consistent — and far more revealing.

In an industry where 8 to 9 out of 10 agents quit within two years, failure is not a coincidence. It is a pattern. And patterns at this scale are never caused by individuals. They are caused by design.

The Industry Was Built for Deals, Not Careers

Malaysia's property agency model evolved around one objective: Close transactions with minimal fixed cost. From the system's point of view, agents are not employees to be carried. They are variables to be scaled.

The Agency's Math

Salaries = Liabilities
Training = Expense
Turnover = Irrelevant

The Result

Zero payroll burden
Unlimited scalability

If an agent succeeds, the agency wins. If an agent fails, the agency loses nothing. This is not negligence. It is architecture.

Why Commission-Only Became the Default

Commission-only compensation is often framed as fair: "You earn based on performance."

In reality, it does something very specific:

Transfers all financial risk to the agent
Keeps agencies asset-light
Makes failure invisible at the system level

When 90% of agents fail, the system still works — because the system does not carry them. Commission-only didn't become standard because it was humane. It became standard because it was capital-efficient.

Low Entry Barriers Are Fuel, Not Opportunity

The two-day course. The SPM requirement. Fast REN registration. These are marketed as accessibility. Structurally, they serve another purpose:

Maintain a constant supply of new entrants
Replace those who quit
Sustain portal subscriptions
Keep internal competition intense

Easy entry ensures optimism enters faster than burnout exits. The industry does not collapse under attrition. It runs on it.

Why Marketing Costs Were Pushed Onto Agents

Property portals and digital advertising did not just "appear." They solved a core industry problem:

How do we generate demand without carrying marketing risk?

Answer: Make agents pay for their own exposure. By externalising marketing costs:

Portals became highly profitable
Agencies avoided funding lead generation
Agents competed against one another using personal cash

Survival became a function of burn rate, not competence. This is not meritocracy. It is a cash endurance test.

Why Mass Failure Is Tolerated

In most industries, losing 80–90% of workers would trigger reform. In real estate, it is normalised. Why?

Because failure is individualised:

"You didn't hustle hard enough."
"Sales isn't for everyone."
"You lack mental toughness."

Systemic design is never questioned. As long as:

Transactions continue
Developers keep selling
Portals keep billing

The system considers itself healthy.

Survivorship Bias Disguised as Merit

Those who survive are held up as proof: "If they made it, anyone can."

What this ignores:

The cash they burned
The months (or years) without income
The emotional volatility they absorbed

Survivors are not evidence the system works. They are evidence of what it demands.

Why This Design Is Now Failing Faster

This model worked — barely — in the past because:

Living costs were lower
Advertising was cheaper
Competition was thinner

But the most important shift is this:

In the past, effort equaled exposure. Today, money equals exposure.

Previously:

Flyers created visibility
Cold calls created leads
Door-knocking created opportunity

Time and effort could substitute for cash. Today:

Ads control reach
Portals gate visibility
Algorithms decide who gets seen

The hustle has been replaced by a paywall. Low barriers to entry now hide a brutal truth: You can enter the industry cheaply, but you cannot operate cheaply. The entry door is open. The oxygen is not. That is why failure accelerates — not stabilises.