Fake listings come home to roostEditorial | Mary Ma 15 Aug 2018
It's hardly earth-shattering news that property agents are prone to malpractices. Otherwise, the Estate Agents Authority wouldn't have been established to regulate the sector.
That being said, it's still shocking to learn less than 10 percent of the properties listed in the secondary market are genuine. It's even more stunning that the revelation was made by one of the sector's leaders, who owns one of Hong Kong's biggest estate agencies.
Shih Wing-ching, chairman of Centaline Property Agency, said that of the 160,000 listings across the sector, only 10,000 of them were genuine, with letters of authorization from landlords as required by law.
His disclosure confirmed misdeeds are still as common as before - two decades after the EAA was set up to improve industry integrity and safeguard buyers' interests, casting serious doubts on the competence of the watchdog.
Would the situation have been better if the EAA played its role more diligently over the years?
While it would be too ambitious to expect zero cases of violation in any scenario, nothing could be as worse when more than 90 percent of the property listings were "fake." The situation is totally out of control.
EAA chairman William Leung Wing-cheung and his senior management can't plead innocence when rampant cheating is happening under their noses day in and day out. He must act.
Shih may be making an honest admission of the fault. However, as he made the shocking revelation, the biggest employer of the sector is also firing an indirect broadside at the EAA, which defies ordinary sense, since the last thing an industry player would want to do is anger the authority that regulates the industry.
As a result of Shih's pressure, Leung will have no choice but to embark on a strong cleanup of the industry.
It's curious because Shih's estate agency will also suffer from a crackdown, since his company reportedly has 23,000 property listings. If his claims that only 10,000 of the sector's 160,000 listings were real, it would mean more than half of the listings kept by Shih's company could be fake too.
Why provoke a cleanup of the industry? Perhaps, that's exactly what Shih wants.
The government's successive shots of special stamp duties to punish buyers reselling their purchases too soon so as to cool the property market hasn't stopped housing prices from soaring, but has frozen the secondary market.
Conditions in the secondary segment has deteriorated so much it is estimated that only one in five agents is able to conclude a deal a month - leaving the vast majority of them to live on meager basic salaries.
The mushrooming of fake listings - including the posting of misleading submarket prices to trick potential buyers into making their first inquiries - occurred as the side effect.
While forcing the authority to clean up the industry will affect Shih's company, it would likely also remove weaker competitors from the secondary market, leaving the major players to share a sector that has been contracting in recent years.
It isn't necessarily a bad thing - as long as buyers' interests are protected.