Mainland property agencies have been spending heavily on online listings and promotion. When properties are hot, they wouldn’t mind paying extra to grab business opportunities, but clearly, this is not the case now.
In Shanghai, 19 property agencies have come together and removed their listings from real estate portal SouFun.com. The boycott is an act of protest against excessive charges.
China’s property market has been slowing amid the harshest curbs in years, forcing property agencies to run a tight ship and make each dollar of spending count.
The agency alliance said SouFun raised its listing prices 10 times in the past five years. Agencies had no choice but to cough up the money or lose their ranking in the search results.
The fees ranged from 60,000 to several hundred million, according to 21st Century Business Herald.
There is another reason property agencies are banding together against SouFun — the online portal has become a competitor.
SouFun is no longer a pure online platform after it invested in two agencies — Shenzhen WorldUnion Properties Consultancy and Hopefluent Group last month.
The move might have been prompted by SouFun’s desire to cut its dependence on property agencies by securing its own source of listing revenue.
SouFun is facing an uprising not only in Shanghai but also in Beijing and Hangzhou.
About 30 percent of SouFun’s income comes from agencies, so their deteriorating relationship has had an impact on the stock.
SouFun’s share price has dropped 12.5 percent on the New York Stock Exchange in the past week.
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