Estate agents who may influence the hike

Areal estate agent and founding president of the Fiji Estate Agents Association, Vyas Sharma, believes that agents can influence rising house prices. This is to make the most of their two percent commission. Mr. Sharma is the Chief Agent and Managing Director of Khelvin Realtors Limited.


An aerial view of Suva and Vyas Sharma, President of the Fiji Estate Agents Association.

Areal estate agent and founding president of the Fiji Estate Agents Association, Vyas Sharma, believes that agents can influence rising house prices.

This is to make the most of their two percent commission.

Mr. Sharma is the Chief Agent and Managing Director of Khelvin Realtors Limited.

His view follows the government’s decision to regulate the commission charged by estate agents on residential properties to a maximum of 2% of the sale value.

Attorney General and Economy Minister Aiyaz Sayed-Khaiyum made the announcement last week during the presentation of the revised national budget 2021-2022.

“There is a general consensus among stakeholders such as estate agents and licensing board, property developers, architects and engineers to regulate commission rates,” Sayed-Khaiyum said.

“Below a certain price threshold, which will be finalized in the regulations, we will limit the commission charged by estate agents on residential properties to ‘no more than two per cent of the sale value’.

Mr Sharma said competition determines the commission individual agents charge their clients.

Standard fees
However, the standard charge ranges from three percent to five percent depending on the sale value of the property.

“Normally, the agent would try to lower the sale price for the buyer based on the client’s budget and eligibility for financing from financial institutions,” he said.

“But remember that the sale price is determined by an appraisal certificate which is prepared by an independent chartered appraiser.

“I have to accept that the buyer will end up paying the maximum price for the property. In short, this will mean that most agents will have to.

He said the 2% cap on all residential properties up to $1.5 million would in short drive the majority of real estate agents out of business.

“It’s just unrealistic and unworkable, at some point the government would put a cap on the fees that estate agents can charge so property prices don’t skyrocket out of control.”

“However, a lot of research and studies will need to be done before a government can actually arrive at that number,” he said.

“The majority of deals will be in the order of $250,000 for $359,000 and the two percent return just isn’t enough to break even.

“Building companies bear a lot of overhead and it is clear the government failed to consult with relevant stakeholders before making the announcement.”

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