New charge system could slow housing firms
10/10/2003 14:37
The city's new commission rule for housing intermediary business for
second-hand properties could dampen the business of many local housing agents,
forcing some 30 percent of the housing brokers out of business next year and
leading many others to switch to the rental market, according to industry
insiders.
Under the new rule, which took effect this month, the ceiling of
commission charge on a second-hand apartment deal is reduced to 2 percent from
the existing 3.5 percent of the home's total price.
In an attempt to find new
revenue sources, some housing companies will probably rush to buy new property
projects and sell them at higher prices on the second-hand housing market,
predicted market analysts, cited by today's Shanghai Morning Post report.
The
move could further push up the already hovering housing prices of the city's new
housing sector.
"The 2 percent charge is barely enough to balance costs for
big housing companies as ours," said Zhao Shuping, operation supervisor of
Stanford Realty Service Company, a local housing agent firm.
For smaller
companies, which used to squeeze profits from the commission income, the new
rule could be a heavy blow, she pointed out.
But she said the new rule would
give momentum to the local second-hand housing market, causing business to rise
by 15 to 20 percent in a short term.
Jane Chen / Shanghai Daily news
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