4 September 2014 - [Translated from HKET] As property prices are on the rise, the market is concerned about whether the government will impose additional cooling measures. Joshua Miller, CEO of OKAY.com, thinks that the government does not need to impose additional measures, since existing transaction volumes are low, and property prices would not remain on the high side as a result.
The number of market transactions of small to medium-sized flats are expected to be higher than larger units, with corresponding property prices recently reaching new heights. Government cooling measures do not appear to have successfully cooled down this market. Joshua Miller, CEO of OKAY.com mentioned in an interview with HKET that the property market is similar to the stock market in that if transaction volumes are low, prices would eventually have to come down.
Currently, the volume of property transactions are even lower than that during the SARS period in 2003. Joshua thinks that every time there are new government policies put in place, the market takes a few years to reflect the changes, and therefore the government should not intervene in the market too much at the present stage. Joshua also mentioned that buyers in Hong Kong have great purchasing power and many are simply waiting for prices to come down before making a purchase decision.
Joshua believes that due to the great purchasing power in the market, even if the US interest rate is raised next year, it would not have big impact on the property market, and the transaction volume of small to medium-sized flats will remain strong.
OKAY.com does not have physical stores, the office of OKAY.com is mainly for operations purposes and they use the internet as the primary platform to showcase their property information. Currently, OKAY.com has 44 staff, in which 30 of them are frontline agents. OKAY.com focuses on the mid to high-end property market. Joshua mentioned that most customers looking to buy tend to enquire about properties between HK$10 million to HK$20 million.
OKAY.com is actively expanding, and there are two different commission models for staff – one is the basic salary model with commission; and the other one is purely commission based, where agents can gain up to 50% commission for the properties sold. OKAY.com uses an innovative approach to differentiate its business model: when their agents input the property information into the database and share listings with other agents in OKAY.com, the agent who uploaded and shared the information on a transacted unit are eligible for a 10% commission even if they are not the one who closed the deal.
Josh said that the commissions OKAY.com offers to its employees are 2 to 4 times higher than other property agents in the market. For example, for every HK$100 profit gained by OKAY.com, the agent is able to earn up to HK$60 in commission. OKAY.com is actively expanding and is optimistic about the Hong Kong market.
