Sales commissions rise in Hong Kong, but property buyers may take a share
Payouts rise to 3pc, but some buyers use their bargaining power to seek a discount on prices
Slowing home sales have prompted some developers to increase the sales commissions they pay to estate agents.
But agents say the move translates into a disguised price discount because home-seekers are aware of the move and are using their buying power in the slow market to negotiate better deals.
"Buyers are asking for a share of our increased commissions if we want them to sign a deal," said a property agent who requested anonymity.
"Agents are generally willing to share the commissions because of the slow market conditions. They hope to do the deal and keep their commission at the standard rate of 2 per cent," said the agent.
Agents say in some isolated cases they have been offered commissions of up to 10 per cent on a sale, and 3 per cent has become a new standard rate for most sales, up from the previous 2 per cent.
David Chan, a director of property agent Ricacorp Properties, said the rate of commissions paid by developers depended on how urgently they wanted to dispose of their flats. "The increased commissions are an incentive for us to help market their projects," he said.
Commissions for new projects such as The Austin above the Austin MTR station now range around 3 per cent, said Chan. But developers could offer higher commissions to speed up the sale of remaining unsold flats in their projects, he added.
Developer Wang On last month offered commissions of up to 10 per cent to clear unsold flats at its Sai Ying Pun project, The Met Sublime. But Wang On sales and development director Gary Wong Yiu-hung said just one flat was sold on those terms.
Flat prices in the development ranged from HK$6.57 million to HK$16 million and Wong said Wang On preferred not to cut headline prices "as that could upset buyers of previous batches of flats".
He said it was up to agents whether they wanted to share their sales commissions with buyers, and Wang On did not mind if they did so.