Projects starting before June to escape transparency sales rules

PUBLISHED : Monday, 31 May, 2010, 12:00am
UPDATED : Monday, 31 May, 2010, 12:00am

Buyers who want a more transparent flat-hunting experience could be disappointed, as new flats do not necessarily have to comply with the government's new measures to regulate sales, which take effect tomorrow.

The Transport and Housing Bureau told the South China Morning Post that residential projects for which sales started before June do not need to follow the new rules, even if they are still selling hundreds of completed new flats.

'We have to draw a line. Only those beginning sales in June have to follow the new rules,' a bureau spokesman said.

It means hundreds of completed new available on the market, including 360 flats at Festival City in Tai Wai, 200 flats at The Latitude in San Po Kong, the remaining flats of Aria Kowloon Peak in Choi Hung and Yoho Mid-town in Yuen Long can be exempted from the tighter measures.

Cheung Kong Holdings and Sun Hung Kai Properties said they would not provide unfurnished show flats as their projects, Festival City, The Latitude and Aria, had begun sales before the measures took effect.

Most show flats designed by developers do not represent the apartments eventually sold to buyers, as they often replace concrete walls with glass, use smaller furniture and remove all doors to give the impression of more space. A new requirement covering unfurnished flats aims to give buyers a clearer picture of what they pay for.

A spokeswoman for Cheung Kong Holdings said 1,000 of 1,360 flats of the phase one at Festival City had already been sold. The company would not provide buyers with an unfurnished flat although 360 flats are still available. 'The sale is close to an end and all show flats will be closed soon,' the spokeswoman said.

She said the company decided to follow some of the new measures for Festival City, including offering a price list three days before sales and making the transaction details public five days after striking deals.

Festival City is jointly developed by Cheung Kong and the MTR Corporation, of which the government is the major shareholder. The MTR Corp has already declined to adopt a more stringent set of flat sales measures proposed by the Urban Renewal Authority.

A spokeswoman for Sun Hung Kai said no new, unfurnished units would be added to the mock-up flats at The Latitude and Aria Kowloon Peak, as they were set up before the measures were introduced.

Even at the existing mock-up flats for The Latitude, set up in an office tower in Kwun Tong, photography is still not allowed although the new guidelines ask developers to let visitors take pictures. Staff on the site said the designer of the showroom did not want his work photographed.

While not all existing new flats are required to follow the new rules, few new projects are expected to be sold next month.

A spokeswoman for Cheung Kong Holdings said no new project of the company would be put on market this month, adding that phase two of Festival City would only be sold in the fourth quarter of the year.

Sales schedules of projects expected to be put on the market soon, including Larvotto in Ap Lei Chau, the Hermitage and Lime Stardom in Tai Kok Tsui, have yet to be fixed as the Lands Department has not given consent for their sale.

'The property market is not looking good. It's partly due to the global financial fluctuations and due to new measures imposed on developers,' associate director of Centaline Property Agency Wong Leung-sing said, 'Developers are just standing still, waiting for others to act.'

The raft of measures to cool the property market and make it more transparent, announced by Financial Secretary John Tsang Chun-wah in April, ask developers to issue a price list, with a sales brochure, three days before homes go on sale; to offer at least one accurate show flat; to sell more units in the first batch of sales at a new development; to disclose details of transactions involving developers' board members and their family members; and to list the address and district of a development on promotional materials.

But the measures are just guidelines and are not legally binding.

Democratic Party lawmaker Lee Wing-tat said the voluntary mechanism had been ineffective from the start: 'I believe we eventually need legislation to ensure that flat sales are transparent.'

Transparency reprieve

Hundreds of flats in projects do not have to adhere to new rules

The number of flats at Festival City in Tai Wai that can be exempted from the tightened sales measures: 360