[photopress:shanghai_apartments.jpg,full,alignright]Some real estate firms in Shanghai are unhappy about the local government’s move to launch an online system for second-hand house transactions. The idea is that it wil limprove market transparency.
The worry is leakage of inventory information which real estate firms, in an attack of hyperbole to the head, call the most valuable asset for their business. Which it is not. However, there is no doubt that if data is put on an online system at some point in time it will leak. That could be seen as the first law of databases.
The local government in announcing this database said the online platform will cover the whole process of housing transactions — involving property inventory records, sale prices and contract signings. All of this data will be available when it become operational next year.
From the point of view of the local government it is one of control. Last year it started to publicize new-house supply and sales information online by collecting information from developers. They supplied the information. But the estate agents handling the sell-on market supply only fragmented information. As in many other countries a significant number of home sellers and buyers bought and sold without using brokers. This saves a lot of money although it makes it more difficult for the government to collect information.
[photopress:shanghai_apartments2.jpg,full,alignright]Almost no real estate firm would want to put all of its cards on the table. And so the inventory listed on the system will, unless the law is strictly enforced, be incomplete.
Only qualified real estate agents can print the contract from the Internet with an authorized username and password and process the transaction. The transaction center would not accept any hand written contract when the new system becomes officially operational.
Wang Lei, senior manager of transaction management of Midland China, said, ‘The move will raise the threshold for real estate agents and phase out a large number of small players. The industry will see more consolidation and acquisitions in the near future.’
What it, perhaps, comes down to is that the big real estate agents want the new rule to be an unexpurgated abridgement.
Unexpurgated that all of the rules that drive out unofficial transactions and small players be left in.
Abridgement, in that the big real estate agents do not have to put all their cards on the table.
One final point. This side of the market has, as yet, hardly taken off. The transaction ratio between new apartments and, as it were, second-hand houses in Shanghai is pretty even. Say 1:1, In the United States it is 1:9 and 1:4 in Hong Kong. The market still has lots of room to expand.
Source: Shanghai Daily