Housing regulator explains that Chinese real estate brokerage agencies need to implement reasonable reductions to fees for housing transactions and leasing services to promote healthy sector development, Invest-Gate reports.

The regulator says in a notice that some real estate brokers in recent years “have charged excessive, unclear and bound fees, and misused clients’ personal information, which has increased the burden on parties to transactions and infringed their legal rights”.

The regulator continues: “Real estate brokers must not abuse a dominant market position to charge unfairly high prices for broking services; brokerage agencies are also encouraged to apply different pricing depending on the transaction size, so the higher the price, the lower the service fee.”

Analyst Zhang Dawei at property company Centaline highlights that the industry has grown increasingly important, with many property transactions relying on real estate agencies.

Zhang mentions that some agents are using their scale to increase fees.

Zhang adds: “The notice is conducive to the healthy development of the industry. However, it is a guiding document; the specific impact on the market will depend on implementation by each city.”