Professor Raymond Tse Chairman Hong Kong Institute of Real Estate

The local property market may be poised to shake off the effects of recession, but for opportunities that can be realized immediately, China is the place to be. Mainland apartments and villas have long been in demand as holiday homes, and developers are keen to use Hong Kong expertise to tap this growing market.

"The two major agencies are hiring plenty of staff to sell property in China, in particular in Shenzhen, as the target market is Hong Kong Chinese," says Professor Raymond Tse, Chairman of the Hong Kong Institute of Real Estate (HKIRE). Centaline alone now has more than 1,000 staff on the Mainland, he adds. "The opportunities are mainly in residential sales to end consumers. But while the agencies are paying Hong Kong salaries, bear in mind that because the cost of property in China is so much lower than in Hong Kong, you need to sell many more units to generate the same levels of commission."

Culture shock

In terms of which Chinese region to aim for, Mr. Tse maintains that Shenzhen is the city of opportunities for real-estate professionals at the moment due to the steadily increasing transaction volume. Meanwhile, property professionals heading north expecting a similar working environment to Hong Kong could be in for a culture shock.

"The China market is not nearly as developed as the Hong Kong market at the moment as mainland laws and regulations can differ greatly," says Mr. Tse. "For example, to conduct valuations, you must gain the relevant China license, yet there is no such regulation for estate agents on the mainland."

In his article 'Real Estate Values in China: Lessons of the Late 1990s,' published in The Appraisal Journal, Mr. Tse notes that introducing a professional ethic into the mainland real estate industry at all levels is the main factor in modernizing the market, citing the valuation sector as an example.

"[The] standards of China's appraisers remain low," he says. "At time of writing, only Chinese asset valuation firms are permitted to perform an official valuation of Chinese firms' assets. Officially, all asset valuation in China has to go through the National Administrative Bureau of State Owned Property (NABSOP)."

However, the NABSOP does not yet function at levels comparable to its international counterparts.

Level of professionalism

"While China has established the Association of Valuers in 1994, the examination is different from other international examinations, all of which specialize in one aspect of valuation, such as intangible assets or machinery," notes Mr. Tse. "Since the examination is only open to appraisers from local Chinese appraisal firms, it takes time to bring the standards set by the NABSOP close to international valuation standards."

For estate agents, the level of professionalism is even more limited. "In place of the estate agent is a much-reduced role more in line with that of a salesman," says Mr. Tse. "These people simply act as facilitators for a deal, and any property transaction requires the presence of lawyers to complete the paperwork."

Mr. Tse also warns against complacency when setting forth on a mainland career, and advises Hong Kong professionals to be prepared to tailor their work ethic according to their situation.

"The main problems faced by Hong Kong property professionals should they switch to China would be in the legal framework, professional culture and customer needs - all of which are very different to what we are used to here," he says.

Foundations of honesty

In these tough times, property agents will inevitably search for whatever competitive advantage they can muster to improve performance. The HKIR has just conducted a survey, 'The Attributes of a Successful Estate Agent,' and Mr. Tse notes that the solutions are much simpler than many realize.

"According to the survey, both clients and agents rank honesty as the most important quality in this field, above product knowledge, market information, training and communications skills," he says. "Honesty is especially important in the current climate, where transaction volume is falling."

Such a policy will result in additional time costs for the companies and individuals involved, as agents have to expend more effort to service the client and seal negotiations; however, Mr. Tse feels that practicing ethical business values and honesty will bring better results for the agent.

Meanwhile, although a certain educational standard is required for the job, Mr. Tse does not feel that having higher qualifications would make as much of a difference to a property agent's career as concentrating on serving the client.

"Form Five is the minimum standard, but I don't see that having completed Form Seven or a university degree would benefit the role very much," he says. "The job depends very much on personality rather than educational background."

Taken from Career Times 2002/08/30