New | China’s property agencies at crossroad: embrace the internet, or risk dying fast

In the past, mainland China’s real estate agents sat in the office and waited for their clients to come. They made handsome commissions, taking advantage of the information gap between sellers and buyers.

Anyone still doing so should worry about their survival now. Internet-based rivals like Fangdd.com have totally changed the rules of the game. The competition is now more about value-added services and financial products to facilitate transactions.

“The integration between online and offline is a trend,” said Chen Sheng, dean of consultancy China Real Estate Data Academy. “The market is now in a dog fight. But the dust will probably settle soon.”

Traditional offline agencies that are slow in reaction, even those such as big as Centaline China, the largest in the mainland by number of branches, are under threat.

Fangdd, now four year old, sold 190,000 homes last year with sales revenues of about 200 billion yuan. The mainland’s first listed real estate agency Worldunion, founded in Shenzhen in 1993, sold homes worth 298.6 billion yuan in this year’s first three quarters, up 45 per cent from a year earlier.

To fend off competition, Centaline is mulling a public listing to raise fund for expansion, after top rival Homelink overtook it as the biggest player in some key markets including Shanghai through acquisitions.

However, valuation is much higher in the mainland than Hong Kong and abroad. That is why E-House (China) Holdings said in June that the property consultancy would get privatised by chief executive officer Zhou Xin and director Neil Shen by delisting from the New York Stock Exchange.