Generally speaking, the brokerage fee for buying and selling houses is usually paid by the buyer, but recently this “unspoken rule” has been broken, in the second-hand house transaction market in Chongqing, the real estate agent’s began to charge the brokerage fee to the seller.
Chain house, De You, 21st Century Real Estate and other shell system brokerage companies have made the following adjustments to the brokerage fees charged for the sale of second-hand houses in Chongqing: the service fee of 1.5% of the buyer’s total loan amount was abolished, but the buyer’s commission of 2% was maintained unchanged, while the seller’s service fee of 1% was changed from free.
I. The reason for the change of commission: the soaring of second-hand house listings
Why did the real estate agents in Chongqing suddenly “go against the norm” and start charging brokerage fees to Home sellers as well?
The main reason for this adjustment is that the stock of second-hand properties in Chongqing has continued to rise in the last two years, and there is an oversupply of properties.
Since the last two years, the number of second-hand houses in Chongqing has soared, which can be clearly seen from the data of second-hand houses listed for sale in various cities on Chain Home’s official website to prepare for a trend.
In July 2019, Chain Home Chongqing second-hand houses listed for sale amounted to about 90,000 sets; by July 2020, Chongqing second-hand houses listed amounted to about 160,000 sets, ranking first in the country; and by now the second-hand houses listed in Chongqing city amounted to more than 200,000 sets, in just 1.5 years, the number of listed houses has more than doubled.
And this is only the data of Chain Home, if you add the number of properties for sale on the websites of My Love Home, Centaline, Xinyi Housing, 21st Century Real Estate, Zhiheng Real Estate, etc., the current listings for sale in Chongqing are estimated to be more than 300,000 sets, of which the number of listings in the nine districts of the main city is more than 270,000 sets.
The soaring number of second-hand houses listed in Chongqing and the greater choice of houses to buy make the second-hand house market a buyer’s market.
The buyer, who has seen more houses, will naturally pick his eyes and understand that the current situation is in his favor, so he will ask the seller to reduce the price, so the average price of second-hand houses in Chongqing has started to decline in the past few years.
After reaching its peak in mid-2018, the average price of second-hand houses in Chongqing began a decline of more than one year, and it still has not recovered today, which has led to a second-hand house transaction cycle of more than three months.
The decline in the average price of second-hand homes has led to buyers demanding more price reductions and sellers being reluctant to reduce their prices, so they are left to dwindle, which has led to the average transaction cycle for second-hand homes to exceed three months.
It is in this situation that Chongqing citizen Xiao Zheng’s house in Banan has been listed for more than a year and has not been sold.
Xiao Zheng last year he was ready to sell a large three-room Banan and then go to buy a new house, when a home buyer offered 150,000 lower than Xiao Zheng’s preferred price, so the deal was put on hold.
With more and more listings into the market, want to sell as soon as possible, Xiao Zheng took the initiative to reduce the price of 100,000, but because of the increase in the number of properties available for selection, some buyers even asked for a reduction of 200,000, Xiao Zheng did not sell in anger.
From the above example, I can also see that today’s second-hand housing market in Chongqing has turned from a seller’s market to a buyer’s market, in this case the real estate agent made to the seller to charge the brokerage fee naturally is not surprising.
Of course, although this change in Chongqing’s second-hand housing market brokerage fee is a direct result of the soaring second-hand listings, but the root cause of the soaring second-hand listings is because of the large supply of new housing in Chongqing.
Secondly, the sky is the limit for new housing in Chongqing, the population increase can not keep up
Chongqing is a market dominated by new houses, home buyers generally prefer to buy new houses, coupled with the increase in demand for improvement, unless they are very important to the location and support of the home buyers, most of the change of home buyers are still more willing to buy the community environment, household type, design of new houses more in line with the needs of living.
Therefore, the supply of new houses in Chongqing has been maintained at a high level in the past 10 years. Since 2012, the main city of Chongqing new housing transaction area of more than 20 million square meters per year, 2017, 2018 two years even more than 30 million square meters.
With the average area of 100 square meters of building area estimated, this means that Chongqing is selling more than 200,000-300,000 sets of new houses every year, and the transaction of about 2.3 million sets of new houses in the past 10 years, which is absolutely sky-high data for the population of the main city of Chongqing.
Although the resident population of Chongqing reached 31,243,200 at the end of 2019, an increase of 225,300 over the previous year, the population of the main urban area is only about 9 million, less than 1/3 of the city.
With a Family of 3 mouths, the main urban area of Chongqing is just 3 million households, which means that the houses built in the past 10 years can make 3/4 of the families in the main urban area of Chongqing live in new houses, plus the commercial houses built in the previous 20 years, there are certainly more houses in the main urban area of Chongqing.
The fact is also true, according to a survey data from the China Household Finance Survey and Research Center, Chongqing ranked first in the country with a high housing vacancy rate of 25.6% in 2017, far exceeding the overall 22.2% in second-tier cities.
And 2018-2020, Chongqing main city commodity housing transactions were 304,000 sets, 204,700 sets, 244,600 sets, plus the 150,000 sets not yet sold, a total of 900,000 new sets, a huge supply, now the main city of Chongqing housing vacancy rate may have exceeded 30%.
The future of housing prices in a city depends not only on supply, but also on demand, i.e. population inflow.
Today, Chongqing’s annual net population inflow is only 200,000, even the main urban area is not filled with more than 200,000 sets of new housing each year, not to mention the main urban areas outside the districts and counties to add more than 200,000 sets of new housing each year.
Now Chongqing’s annual entry of new homes can not be digested, let alone the second-hand housing market.
According to normal experience, 5% of the stock of houses enters the second-hand housing market for listing and trading, and the number of second-hand housing listings in Chongqing is rapidly climbing under the sky-high supply of new houses. With the stimulation of higher commissions, agencies are generally focusing on the new home market, so it makes sense that the inventory of second-hand homes is gradually climbing.
As a result, Chongqing’s preference for new homes and the fact that supply exceeds demand has led to Chongqing agents beginning to charge commission to sellers as well. The question that arises is, will agents in other cities follow suit?
Third, will other cities follow?
Some industry insiders said that the changes in agency rates are made by each city according to its own actual situation, and the above rules can be seen as a platform guide price, not all of them are implemented.
However, the emergence of a recent policy makes me think that more cities will follow the real estate agents in Chongqing after the commission charged to the seller.
The management’s attitude towards real estate in recent years has been very clear, that is, “housing is not speculation”. In order to curb speculation, over the years a variety of restrictions on purchases, restrictions on loans initiatives have come out, recently Shenzhen is the introduction of a new guide price, the country also strictly investigate the inflow of credit funds into the property market irregularities.
But the effect is not very good, in February, China’s 70 cities in 56 cities in the new housing prices rose. Among them, the 4 major first-tier cities led the way, with new homes up 0.5% and second-hand residential sales prices up 1.1% from a year earlier. Beijing, Shanghai, Guangzhou, Shenzhen four cities second-hand house prices rose by 1.2%, 1.3%, 1.0% and 0.9%, wrapping up the top four of the 70 cities second-hand house prices ringgit.
And to limit the price of housing continues to rise as well as speculation, the most important is a move is the collection of real estate tax.
Recently, it was announced that “promoting real estate tax legislation” was written into the 14th Five-Year Plan, and according to the legislative arrangement of the 13th National People’s Congress, the real estate tax will start legislation within the term of the current National People’s Congress (March 2018 to March 2023), which also This means that the real estate tax is expected to start legislation before 2023.
Once the real estate tax legislation starts, it means that the cost of holding property will rise significantly in the future, which will definitely force the speculative funds out, so a large amount of inventory will be put into the second-hand housing market, so that the national second-hand housing market will be like Chongqing general oversupply, then the real estate agent will naturally charge the seller intermediary fees.
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