28Hse-Hong Kong Property
Hong Kong Property Market - Yr.2019 Oct: Average price per sq feet $11147 1.58%   (last month:$10974)
Home  - News
News and article search:
   Previous News: (YYYYMMDD)
Property News
Property News(Eng)
New Homes
HK Gov.policy
Land news
Agency Insider
Oversea Property
New Homes
Price info.
Photo gallery
Living in Hong Kong
Expert Blog
Wed Property Focus
Frankie K.S. Wong
18 Property
Mr. Poon
Frankie K.S. Wong
News content

Tender sales transparency problem continues. Government discusses to prosecute again.

Image Caption
Chen Fan from the Transport and Housing Bureau: Law enforcement will not be soft.

Hong Kong Wen Wei Po (By Yan Lun Le)

Developers have been criticized for their misuse of tender on house selling. The secretary for Transport and Housing Bureau, Chen Fan pointed out yesterday that, they had prosecuted developer for individual violative tender case, and were following up the remaining cases, also It would not be ruled out that prosecution will be issued again, besides the law enforcement will not be soft. In the short term, a "Good Practices Code" will be issued to direct developers to clearly list the various discounts, financial concessions or benefits in the transaction book. The Legislative Council Member, Ke chuangsheng expressed worry about that the secretary did not further regulated the tender sale and criticized developers’ current tender sales are easy to be adjust and control, also the new guideline of the The Real Estate Developers' Association (REDA) is easy to let developers to avoid the supervision.

In answering the questions from Ke chuangsheng yesterday, Chen Fan pointed out that, although there is no need to provide a price list for the tender sale, but it is still need to subject to other regulations involving sales brochure, sample flats and transaction book to disclose the trading data in the ‘Residential Properties First Hand Sales Ordinance’ (hereinafter referred to as The Ordinance). The Sales of First-hand Residential Properties Authority (SPRA) through active monitoring had found the transparency of the sales method and transaction data of some new houses’ tender sales was insufficient, and issued prosecution to developer for one of the cases, also SPRA is following up on the remaining cases, besides it is not excluded that prosecution will be issued again depends on the evidence.

The SPRA will move depends on the evidence.

Sun Hung Kai Properties (SHKP) was prosecuted by the SPRA in the middle of this month, saying that its St MARTIN hadn’t list the complete information on the payment terms in the transaction record book. It is known, the discounted prices of individual houses of St MARTIN are lower 25% of the most from the published prices, which made the market having misconception that property prices were still at a high level in disguised form, thus affected the judgment of home buyers. The case will be heard at Kwun Tong Magistracy on July 9, and the conviction would carry a fine of HKD500,000.

It is hoped that the market can self-regulate.

The SRPA had issued "Reminders to the Industry" and FAQ to ask the seller to list all the details of the payment terms, and then the relevant information in the transaction book was improved. From the beginning of April to the 23rd of this month, only 7 among 1,900 houses from the new six housing estates were put on sale by tender sales. Chen Fan hopes to let the market to self-regulate, and emphasizes government must follow up seriously if finds problems to ensure the sales information is open, transparent and fair.

Chen Fan points out that, the Government is adopting a three-pronged implementation regulation: one is to monitor the industry of compliance with ordinance and to carry out enforcement work when necessary; the second is to issue guidelines to the industry in good time to enable the industry to effectively comply with the Ordinance; the third is to enhance public awareness of the ordinance to protect consumer rights. Among them, the Government has released a new broadcast of ‘Notes for buying houses by tender’ in the middle of the month to remind prospective buyers.

At the same time, the Estate Agents Authority is conducting an investigation and issues a "letter to the estate licensee" to ensure that they strictly comply with the ‘Estate Agents Ordinance’ and the guidelines during tender sales. The Administration specifically reminds the licensee not to issue any first-hand residence promotion materials, including recommended bid prices of the houses under tender sales without obtaining the developers’ written consent.

The SRPA issues "Code" to teach developers how to list discount.

In addition, the SRPA plans to issue a "Good Practices Code" in the short term to direct developers on how to clearly list the various discounts, financial concessions or benefits in the transaction book in the form of amounts. At the same time, it will also facilitate the prospective purchasers to understand the above information and master the method of calculating the actual house price by posting cases on their website.

Chen Fan expresses, the SRPA and Estate Agents Authority would ensure that the transparency of the first-hand housing by tender sale would be in line with the way by price list to protect consumers' rights.

Ke Chuangsheng: "Tender sales" allows "adjust".

Ke Chuangsheng responds to welcome the SRPA to issue the "Good Practices Code" in the short term, but is worry that the Secretary did not take further measures to regulate the tender sale. He says, developers can refuse to sell houses at any time with excuse of “not reach the bid price’ in tender sales, as a result that although the house number in each round meets the regulation of 20% of the total houses, but it is adjusted at will by developers actually, which will undoubtedly make the new measures launched by Chief Governor exist in name only.

On the other hand, the new guidelines to members from the Real Estate Developers' Association (REDA) do not have a clear definition of "feature house", which is a bug and may let developers to easily avoid the supervision. The houses of 753-1,076 sq ft are housing targets of general users or "family customers", not the so-called "luxury homes". It is visible that current guidelines are broad and fail to effectively prevent the abuse of tender for sale.

He points out that, he would closely monitor the effectiveness of the new guidelines of the REDA, which will come into effect on June 1, and urge the government to take decisive measures if necessary.

Translated by 28Hse.com . All right reserved.