Developers raise agents' commissions to sell more flats

Estate agents are being offered higher commissions by developers who want to speed up sales of their properties before prices slide further.

According to property agents, Henderson Land and New World Development on Saturday offered agents a 3 per cent commission for every flat sold after they met their sales quota of 28 flats for The Reach in Yuen Long - up from 2.5 per cent.

Sammy Po Siu-ming, a director at Midland Realty, said: "The sales turned very slow on Saturday. We only sold 11 flats and failed to meet the target.

"We need more incentive to motivate our agents in a market downturn."

Po said agents would meet developers and propose that they scrap the quota system and simply raise the commission rate to 3 per cent for every flat they sold at The Reach.

The two developers of the Yuen Long project launched sales on Friday evening, a day earlier than scheduled, within minutes of the government announcing it was extending a special stamp duty on quick resales and imposing additional stamp duty of 15 per cent on home purchases by non-permanent residents and companies to deter the further flow of hot money into the city.

Centaline Property Agency earlier estimated 23.1 per cent of new flats sold in Hong Kong in the third quarter were bought by mainlanders.

This was a 1.2 percentage-point drop on the second quarter, and was down more than 40 per cent on the same period last year.

In the year to the end of September, buyers using company names accounted for 15 per cent of new-home sales, but mainly luxury homes.

Citic Securities expects developers will adopt a more conservative pricing strategy, especially for the projects targeting mainland buyers.