Traditional property agents may soon lock horns with online realtors

More home buyers are searching for information online.

According to South China Morning Post, with home values in Hong Kong rising more than 150% since 2009, realtors – who charge a fee of 1% of sale price from both buyer and seller – have seen a sharp rise in commission payments per deal for potentially the same amount of work, especially in the mass housing market.

Given that more home buyers and sellers searching for information online, analysts and industry participants believe the traditional business model of the city’s property brokerage business will gradually undergo a structural change and that could see a decline in commission levels.

“The traditional business model, where agents focus on physical presence as a contact point for sellers to list their properties and for buyers to look for homes, will be gradually replaced by an online presence,” said Professor Chau Kwong-wing, chair of the University of Hong Kong’s department of real estate and construction. “With an online presence, we do not need a physical presence to link up with agents and customers. Without having to bear high shop rents, the commission could go down,” Chau said.

Read more here.