What is the most lucrative job in the world’s costliest property market? A sales agent, of course
A toxic combination of rising interest rates, a looming vacancy tax on empty flats and the sharp decline in the city’s stock market is making developers jittery
It’s a great time to be a Hong Kong property agent.
In some cases, developers are paying more than double their usual 3 per cent agent commission for selling a flat, as they get aggressive in paying agents to drum up sales. The step signals the growing eagerness of developers to speed up sales as market sentiment continues to sour. The higher commissions are on top of sweeter mortgage deals and discounts that developers are offering potential buyers.
A toxic combination of rising interest rates, a looming vacancy tax on empty flats and the sharp decline in the city’s stock market is making developers jittery.
“Developers sped up launches [of flats] after the vacancy tax was proposed. Apart from giving buyers more discounts, they also offered higher commissions to agents to boost sales of the completed stock of new flats,” said Sammy Po Siu-ming, chief executive of Midland Realty’s residential division.
For instance, New World Development increased the rate of commission on the last handful of more expensive flats at its Pavilia Bay development in Tsuen Wan in the New Territories from 3 per cent to 7 per cent.
For a new three-bedroom flat of 826 square feet at Pavilia Bay that sold at HK$24.7 million (US$3.2 million) on September 5, the commission would increase from HK$741,000 (US$94,400) to HK$1.73 million (US$220,000).
The agent, who shares 30 per cent of the commission, can net HK$518,700 for brokering the deal, while the remaining 70 per cent, or HK$1.21 million, goes to his or her company.
Lai Sun Development raised the rate of agent commissions to 5 per cent from 3 per cent after only five flats sold on the launch day of its 144-unit Monti development on Hong Kong Island.