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China Focus: Showdown between China's realty agents and estate websites

English.news.cn   2014-08-11 20:35:46

SHANGHAI, Aug. 11 (Xinhua) -- Real estate agents are in the midst of a feud with listings websites after rising fees during a sluggish property market have both parties on edge.

The building frustrations erupted last week when 13 major realty companies in Shanghai jointly removed their house listings from Fang.com, a leading real estate website previously named Soufun.com.

The boycott came shortly after Fang.com raised its service fees,charging 600 yuan (97.5 U.S. dollars) for each house listed, almost ten times the amount charged five years ago. The increase elicited anger and protests amid an already spiraling property market.

"Previously we had to pay about 10 million yuan per year for publishing our house information on Fang.com, but after they updated their pricing system, we now have to pay almost 20 million," said a staff member at Coldwell Banker International Real Estate in Shanghai.

Housing websites like Fang.com are no stranger to such boycotts. Back in May, nine real estate agents, which collectively control around 80 percent of the property sources in Hangzhou, capital of east China's Zhejiang Province, left the website in the same fashion.

Two months prior Anjuke.com, another housing information provider, saw similar snubbing in Shanghai. Strikes were staged in Beijing and Guangzhou shortly after.

In an era when real estate is intertwined with e-commerce, the agents' meltdown is a reflection of a "bear property market," said Li Jinde, head of the intermediary department of the Shanghai Office of Centaline Group, a real-estate management and consulting company.

"Our benefits have basically decreased, but their service fees are on the rise, which is making it difficult," said Li.

As a result, his company will have to lay off 25 percent of their employees, he said.

Fang.com reported a revenue of 41.7 million dollars in the second quarter of 2014, an 8.5 percent increase compared to the same period last year. That figure is solely based on the money made via publishing house information for agents.

But the housing agents' tit-for-tat strategy might deal a big blow to the company. Within a week of the boycott, Fang.com's share price dipped to 10.34 dollars from 11.34 dollars. If their relationship continues to be strained, some believe the company could face up to 40 percent revenue loss.

The housing agents, however, might get burnt by their own fire, as a fallout with China's dominant real estate website could make them lose customers.

According to official statistics, Fang.com dominates 50 percent of the online house listing market in China. The website proudly boasts a record of more than 20 million registered users, with average daily hits of 12 million, making it the most visited among similar websites. Its mobile application had 2.17 million users by January 2014, four times that of the second-ranking app in the same category.

So the real-estate-versus-e-commerce quandary could be a lose-lose deal for both. The store manager of Shanghai-based Renchuan Real Estate Agents told Xinhua harboring bad blood with Fang.com is the last thing he wants because the website has solid numbers of users and a very good brand.

"Since the boycott, our phone consultations have dropped by about 30 percent," he said.

The dicey dispute has also raised concern among potential house purchasers, who have complained about a sudden lack of listings on Fang.com, which is currently only able to post information from little-known companies.

Mr Ye, a Shanghai resident, said most of the listings on Fang.com were suddenly invalid and he had to turn to other websites for fresh listings.

Li Tiegang, a professor with the real estate research center of Shandong University, said websites like Fang.com should learn to protect the interest of both realty agents as well as their users.

"The website's interests are closely connected with the agents and users, so if its people do not behave, they will eventually hurt their own prospects," Li said.

Yan Yuejin, a research fellow with E-house China R&D Institute, said that housing agents are extremely important to the e-commerce websites because they not only help provide housing information, but also verify the authenticity of such information while protecting the interest of purchasers. He urged both sides to reconcile.

"Both sides should make some compromises and find a solution to the problem, instead of maximizing their own interests by damaging the interests of each other," he said.

Editor: Fu Peng
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