'Brokers are not the main reason why house prices are pushed up'

(CLO) Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, affirmed that brokers are not the main reason why real estate and housing prices have been pushed up in recent times.

Real estate agents are not the primary reason for the high housing prices.

Recently, public opinion has been abuzz with information related to individuals and businesses operating in the real estate brokerage field colluding to raise prices and disrupt the market.

Regarding this issue, Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARs), affirmed that real estate brokerage is not the main reason for real estate price increases in recent times.

According to Mr. Dinh, the decision on the selling price of real estate is the right of the investor, homeowner or real estate developer. In fact, brokers are not allowed to participate. Brokers are only allowed to access the price list of the investor almost at the same time as the customer/investor.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association. (Photo: ST)

“The selling price is the monetary value of a unit of goods or services. Simply put, it's the amount of money a customer pays when choosing or purchasing any product. It's determined based on the product's value, production costs, marketing costs, desired profit margin, and other related factors. The selling price can be applied to individual items, product packages, or services offered,” Mr. Dinh said.

According to the Chairman of VARs, businesses can set high prices to maximize profits, set low prices to increase competitiveness, or determine a harmonious price to ensure the interests of both businesses and customers. Depending on the time, the goals of businesses can be different. From there, the product pricing strategy can also be adjusted accordingly.

In the pricing process, "intermediary channel costs" are a constituent element, which manufacturing businesses balance appropriately and incorporate into the selling price to ensure that after deducting costs, the profit margin meets expectations. These fees are mostly anticipated and controlled by businesses to ensure they do not exceed a certain limit, thus not impacting the company's profitability.

"Individuals/organizations participating in the intermediary role are only entitled to receive remuneration paid by the manufacturing enterprise, and have absolutely no right to participate in determining the selling price of the product," Mr. Dinh emphasized.

According to Mr. Dinh, a reality that almost every trading floor faces is that the selling price proposed by the floors is "criticized as low" by investors. Because investors always want to maximize profits and often have the mentality of being afraid that the floors will offer low prices to easily "push goods".

In reality, to reach customers/investors, real estate agencies/brokers also have to spend a lot on PR and marketing. If the selling price of real estate is too high, exceeding the financial capacity of many people, the attractiveness of the product will decrease, and closing deals will become more difficult.

Therefore, more than anyone else, real estate exchanges/brokers are the ones who want the selling price of real estate to be determined at the most appropriate level. Only then will the brokerage process be smooth, and brokers will have the opportunity to earn commissions. After all, brokers "live off commissions."

"Brokers should accept low but regular commissions to maintain their lives and accumulate small profits, rather than spending a whole year chasing a "big deal" while always being in a state of "luck or bad luck", Mr. Dinh said.

Avoid confusion, equating "real estate brokerage" with "speculation".

Recently, the issue of real estate prices has been a hot topic attracting widespread public attention. This applies not only to apartments but also to villas, townhouses, and auctioned land. People are stunned by the ever-increasing prices of real estate.

The market is like a vast ocean, and prices are like waves. Each wave is higher than the last. And people don't know when this situation will end. This has a huge impact on social welfare.

Many people have real housing needs, but do not have the opportunity to access housing. Many young people who have not yet determined to strive to buy a house have quickly classified this as a "distant dream".

This is the result of a severe shortage of affordable housing supply for a long time. Meanwhile, demand for this segment, both for living and investment, is always high. Supply cannot meet demand, causing demand to be compressed.

Over time, the compression level increases. When the compression reaches a certain limit, it will pop up and ignore many notes to find supply. This is considered the most important reason why the race to hunt for houses and land is becoming more and more fierce. That is also why apartments, which have always been considered "consumables", have also gone against the current to increase in price rapidly, regardless of whether they are new or old.

Recently, the issue of real estate prices has been a hot topic attracting much attention from the public. (Photo: ST)

Not to mention that every new project launched is positioned as "high-end," which makes already high prices even higher.

According to Mr. Nguyen Van Dinh, in that price increase story, it is not excluded that there are cases of speculation, profiteering, taking advantage of the imbalance of supply and demand to hoard goods, inflate prices to "surf" and make a difference. However, it is necessary to clearly identify that this is the behavior of "speculators" with finance. Their behavior is to observe, listen, and monitor every fluctuation of the market. And as soon as they see an opportunity, they "recklessly close the deal", then hoard goods, find "good bait" and transfer the name, and enjoy the difference.

These individuals are completely different from real estate brokers. Real estate brokers work for a living and earn a fee from advising, introducing, and closing deals with clients. They don't have the financial means to hoard properties and wait for prices to rise. If they do, their numbers are negligible, not enough to name or identify them, let alone pose a risk of "creating market fluctuations" or "manipulating the market."

In short, real estate brokers play an extremely important role in the development of the real estate market in particular and the national economy in general. To ensure that this activity develops in a professional, high-quality, open, and transparent manner, the new legal framework has added many detailed and specific regulations regarding the conditions for practicing the profession for individuals and organizations, as well as other related regulations.

"However, it needs to be clearly stated that real estate brokers only act as intermediaries connecting buyers and sellers. They are neither the sellers nor the buyers. Therefore, they do not have the right to determine prices, nor do they have the financial capacity to decide to 'hoard' properties and disrupt the market," Mr. Dinh emphasized.

Source: https://www.congluan.vn/chu-tich-hoi-moi-gioi-bat-dong-san-moi-gioi-khong-phai-nguyen-nhan-chinh-khien-gia-nha-bi-day-len-cao-post319432.html