Developers try to get round control measures

PUBLISHED : Wednesday, 02 June, 2010, 12:00am
UPDATED : Wednesday, 02 June, 2010, 12:00am

Developers have tried to water down the impact of tightened controls on their flat sale tactics that took effect yesterday, exploiting an ambiguous clause that the government has laid down to limit the potential for price manipulation.

The new government guidelines require a developer to put up half the 'total number of flats available for sale' in the first batch released and list all their prices.

This was designed to force developers to put more flats on the market when launching a sale, instead of only a few dozen to whet buyers' appetites.

But it did not clarify whether 'the total number of flats' meant the number the Lands Department had approved for sale.

In its version of the guidelines sent to members last night, the Real Estate Developers Association says the 'total number of flats' means the number a developer selects for sale in each batch.

For example, it says a developer can split a 1,000-flat development into two construction phases and sell the 500 flats of each phase in four batches. For the 125 flats in each batch, the developer need only launch half of them - or 63 flats.

Lawrence Poon Wing-cheung, a spokesman for the Institute of Surveyors, said the rule 'has become rubbish' under Reda's version.

'Their interpretation will make things the same as before. The government shouldn't let developers read the clause in their own way.'

Apart from trying to water down the impact of the measures, the association says the measures will not for the time being cover completed, first-hand projects. It says there were 'still some outstanding technical details and legal issues' for these buildings, without giving details.

Secretary for Transport and Housing Bureau Eva Cheng said the association was still considering whether some sales should be exempt from the new rules, including sales of a small number of flats that were built more than 10 years ago, and the sale of flats to tenants.

Henderson Land chairman Lee Shau-kee said: 'The new measures will cause a little inconvenience ... We will follow the government's requirements. They hope we will sell flats honestly. Their intention is correct.'

Meanwhile, visits to show flats yesterday demonstrated that developers could get around other requirements listed in the guidelines if they had already obtained sales permission for projects.

For example, at the mock-up flats for Cheung Kong's Festival City in Tai Wai, which have been on sale for several months, a newly added kitchen and a bathroom are larger than in the actual flat.

At Emerald 28, a Lai Sun Development project in Prince Edward, an estate agent said a price list would not be released before the sale of the next batch of flats in the middle of the month, as the project was not covered by the new requirements.

Separately, Cheng denied media reports that she had decided not to sell a flat she owned in Ho Man Tin ahead of the sales guidelines being announced.

She said she initially thought about selling the flat before she became housing minister. She changed her mind early this year when her daughter returned from the United States.

'The measures are meant to enhance the transparency of sales. No personal considerations were involved,' she said.