Chinese property brokers need to reduce fees, regulator says

FILE PHOTO: Unfinished apartments in Guilin

BEIJING (Reuters) – Chinese real estate brokerage agencies need to implement reasonable reductions to fees for housing transactions and leasing services to promote healthy development of the sector, the housing regulator said on Monday.

Some real estate brokers in recent years “have charged excessive, unclear and bound fees, and misused clients’ personal information, which has increased the burden on parties to transactions and infringed their legal rights”, the regulator said in a notice.

Real estate brokers must not abuse a dominant market position to charge unfairly high prices for broking services.

Brokerage agencies also are encouraged to apply different pricing depending on the size of transaction, so that the higher the price, the lower the service fee.

The industry has grown increasingly important, with large numbers of property transactions relying on real estate agencies, said analyst Zhang Dawei at property company Centaline, adding that some agents are taking advantage of their scale to increase fees.

“The notice is conducive to the healthy development of the industry. However, it is a guiding document; the specific impact on the market will depend on implementation by each city,” Zhang said.

(Reporting by Liangping Gao and Ryan Woo; Editing by David Goodman)