Shanghai’s real estate brokers may be required to pay deposits to obtain a business licence in the future. This is one of the latest ideas floated by local government to create a safe environment for second-hand property transactions.
The plan, developed by the city’s second-hand property trading center and launched recently on a trial basis, is designed to help eliminate unqualified brokerages from the crowded market, an industry source who declined to be identified told Shanghai Daily.
Deposits, kept in a designated bank account and supervised by the trading center, would vary. They could range from RMB1 million yuan (US$145,815) to RMB10 million, depending on the size of the company.
Two major scandals involving big real estate agencies from south China have damaged the credibility of the country’s property brokerage firms and attracted growing attention from industry experts, who are calling for more stringent regulations to safeguard the sector.
While it remains unclear how many real estate agencies are taking part in the trial and whether it might be implemented across the entire city, industry experts were understandably divided on the scheme. To some, it smacked of restrictive practice.
Source: Shanghai Daily