GOVERNMENT TO TACKLE ‘UNDESIRABLE’ PROPERTY SALES TACTICS IN HONG KONG

The Hong Kong government has announced it will introduce new measures to deal with the ‘undesirable’ sales tactics of developers selling flats in Hong Kong.

The new measures will include steps to prevent buyers being encouraged to bid against each other for flats. Instead, developers will be required to give buyers a clear price per square feet.

Financial Secretary Paul Chan Mo-Po said of the move: “Land and housing is a very important topic, touching the heart of the people in Hong Kong,” Chan said. “This issue needs to be tackled at the highest level of government with a holistic view.”

The latest example is a residential project in Kowloon developed by Wheelock & Co. The 750 apartments in the project received applications from 9,800 buyers, causing buyers to bid against each-other.

The company is planning to put another 300 to 400 apartments on the market in the near future and the price for new units will go up by 5%-8%. The new flats may be priced at about HK$15,500 (US$1976) per square foot. The company scooped up nearly HK$8.1 billion ($1.03 billion) from its Kowloon project, according to Bloomberg.

Hong Kong home prices have hit record highs in the past couple of years. They have increased by more than 300% since 2003 when the housing markets had hit the bottom in Hong Kong. Middle class families have been priced out.

The government also plans measures to prevent developers from hoarding flats. As of September last year, there were 9,000 unsold flats in private developments. Of those, 4,000 were in projects completed last year, 31 per cent of the flats completed in the year.

“We want to make sure that this supply really comes to the market in a timely fashion,” Chan adds.