Shih Wing-Ching, chairman of Centaline Property Agency, has revealed that only 10,000 secondary home listings could be authentic, out of a total of 160,000 such listings in Hong Kong. That means only 6 percent of listings are real.
The fake house listings are typically offered at a big discount , or they could be units promising spectacular views or fancy decorations.
However, when a potential buyer becomes interested and makes further enquiries, the buyer will be told the property has just been sold. Agents will then try to talk the buyer into considering other alternatives.
These fake listings are essentially baits to attract more customer traffic. In such a highly-competitive industry, this has become a norm.
Hong Kong’s Estate Agents Authority has been trying to crack down on such malpractice.
For instance, it has ordered all agents to keep record of all house listings, and the authority also carried out “snaking” operations.
However, it was only able to conduct inspections with regard to only a small fraction of the cases. Also, realtors have their own tricks to deal with such inspections.
In the first half of 2108, the Estate Agents Authority only found one case of violation. As the biggest player in the market, Centaline has been accused of turning a blind eye to the situation.
But recently, Ricacorp Properties, another property agency owned by Shih, said it plans to spend HK$40 million to weed out fake house listings.
Why is Shih suddenly taking the issue seriously? The answer lies across the border.
Earlier this year, China’s largest online real estate agency Lianjia set up an alliance with a number of smaller regional players.
The platform enables members to share listings, customer data, IT technologies, big data, etc. And the new platform claims that all listings are authentic, and that it will detect fake listings using AI and big data technologies.
58.com, the major rival of Lianjia, quickly responded and started another alliance with several other real estate agencies in June. The alliance also highlighted 100 percent authentic listings as a key selling point.
Leading mainland real estate agencies have long set their sights on the Hong Kong market.
If authentic listings become a standard in China, mainland rivals may one day bring the practice to Hong Kong.
Shih is apparently making an early move to clean up his own shop and get ready for the potential challenge.
This article appeared in the Hong Kong Economic Journal on Aug 15
Translation by Julie Zhu
[Chinese version 中文版]
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