'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.

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

Recently, public opinion has been abuzz with information related to individuals and businesses operating in the real estate brokerage sector 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 the recent increase in real estate prices.

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 investor's price list almost at the same time as the customer/investor.

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

“The selling price is the monetary value of a unit of goods or services. Simply put, this is the amount of money that must be paid when a customer chooses or buys any product. It is determined based on the value of the product, production costs, marketing costs, desired profit and other related factors. The selling price can be applied to single items, product packages or services provided,” said Mr. Dinh.

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 the business may 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 the manufacturing enterprise balances at an appropriate level to include in the selling price to ensure that after deducting costs, the profit level is as expected. This fee level is mostly expected and controlled by enterprises to ensure that it does not exceed the norm, affecting the enterprise's profits.

"Individuals/units 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 fact, to reach customers/investors, real estate trading floors/brokers also have to spend a lot of money on PR and marketing. If the real estate price is too high, beyond the financial capacity of many people, the attractiveness of the product will decrease, and the ability to close customers will be more difficult.

Therefore, more than anyone else, the real estate trading floor/broker is the one who wants the real estate selling price to be determined at the most appropriate level. Only then will the brokerage sales be favorable, and the broker will have the opportunity to receive commission. Because brokers "live on commission".

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

Avoid confusing and equating “real estate brokerage” with “speculation”.

Recently, the story of real estate prices has always been a hot topic attracting much attention from the public. Not only apartments but also villas, townhouses, and auctioned land have been mentioned one after another. People are shocked because each time real estate prices are pushed up.

The market is like the ocean, the prices are like waves. Each wave is higher than the previous one. And people do not know when this situation will end. This has a huge impact on social security.

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 put this on the list of "distant dreams".

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 out 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 story of real estate prices has always been a hot topic attracting much attention from the whole society. (Photo: ST)

Not to mention that new projects are all positioned at the "high-end" level, making the already high price level 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 subjects are completely different from real estate brokers. Because real estate brokers work and receive remuneration from consulting, introducing and closing customers. They do not have enough finance to hold goods and wait for prices to increase. If there are any, the number can be counted on the fingers, not enough to name and describe, let alone the risk of "creating waves" or "manipulating the market".

In short, real estate brokerage plays 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, quality, public and transparent manner, the new legal corridor has added many detailed and specific regulations on the conditions for practicing of individuals and organizations as well as other related regulations.

"However, it is necessary to clearly define that real estate brokers only play the role of intermediaries. They are neither the seller nor the buyer. Therefore, they do not have the right to decide on the price, nor do they have enough financial capacity to decide to spend money to "hold the goods" and cause market manipulation," 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