Making money in the home property boom
Real estate agents in Hangzhou are reaping the benefits of a boom in existing home sales, turning their occupation into one of the best paid this summer.
During the first half of this year, 52,889 existing apartments were sold, up about two-thirds from a year earlier and almost equal to total sales for the whole of 2105. Property agents, who normally get bonuses when they complete a sale, are earning an average of 12,326 yuan ($1,852) a month nowadays, according to industry analysts.
“I work almost every day,” said Jason Huang, an agent in a real estate office in the Jianggan District. “I don’t take breaks because that can mean money slipping away from my pocket.”
In downtown areas, the average price of an existing apartment has risen to 19,652 yuan per square meter. In residential communities near sought-after primary and middle schools, prices have surpassed 20,000 yuan.
Brokerage fees vary according to the size of a transaction. Homebuyers typically have to pay 1-3 percent of the value of the apartment if a deal is concluded. On average, a real estate agent earns from 10,000-20,000 yuan on each flat sold.
“The income is much better than that of a typical white-collar office worker in Hangzhou,” said Huang, who declined to reveal his earnings. “However, I do have to sacrifice weekends and leisure time for my job.”
As a relative newcomer to the business, Huang said he has to familiarize himself with surrounding neighborhoods and find as many people as possible who want to sell their homes. He said he makes hundreds of calls every day to potential buys and sellers.
The most time-consuming part of his job is taking potential buyers to view apartments. On weekends, the number can triple from weekdays
“Sometimes, I take a buyer to visit a dozen flats in a day and all of them are rejected,” said Huang.
“Selling a flat can take months or even a year. But once you are successful, if means money in your pocket.”
Hangzhou’s real estate prices have been rising for 14 months, influenced perhaps by the city’s hosting of the G20 summit next month and the Asian Games in 2022.
Real estate activity in the Jianggan District has climbed 32 percent, according to Kanfang, a local real estate transaction website. That is followed by a 20 percent increase in Xiaoshan District and 19 percent in Yuhang.
In the Tier 3 city of Jiaxing in northern Zhejiang Province, the increase in real estate prices this month ranked first in the nation, according to the China Index Academy.
Veteran real estate agent Will Li said the ranking is not surprising.
Jiaxing sits at the border of Zhejiang and Shanghai, putting it only 30 minutes by bullet train from either city. In May, the government announced that Shanghai residents could use their housing accumulation funds to buy homes in Jiaxing.
“The new policy stimulated the local market,” Li said. “Many sellers called to tell me they wanted to raise their prices. That means potential brokerage fees also rise.”
Li owns a private real estate agency, operated out of a residential community. His track record in selling homes has made the agency popular with locals.
The boom in property is both gratifying and stressful for Li.
“It’s really labor-intensive work,” he said. “In addition to shuttling between houses, we have to deal with piles of contracts and sometimes resolve disputes between buyers and sellers. Yes, it means high incomes, but many of the younger agents burn out within three years.
Last month, two of his agents quit.
“More real estate agency chains are starting to open branches in the city, which means more competition and more stress for agents,” Li added.
For his part, Huang said he plans to leave his current job next year and return to his hometown of Lishui in western Zhejiang, where he will open his own real estate agency.
“Hangzhou is saturated with agencies at present, so newcomers like me have to go elsewhere if we want to strike out on our own,” he said. “However, the existing home market in Lishui is still full of potential. It’s a great chance for me.”
Huang is a young man with big dreams.
“I sell homes, but I can’t afford my own house yet,” he said. “I’m told that top agents can earn something like 600,000 yuan in just six months. I don’t know if that’s true or not. I am just saving my money to invest in my own business in Lishui.”