New real estate rules go too far, says panel

PUBLISHED : Wednesday, 06 July, 1994, 12:00am
UPDATED : Wednesday, 06 July, 1994, 12:00am

A PANEL of real estate experts claims the government failed to do its homework properly before coming up with measures to dampen property speculation.

While it generally supported the government's plan to cool the overheated market, it said the measures were only corrective and not preventative, and that they also went too far.

The panel, organised by the Society of Hong Kong Real Estate Administrators, included Law Cheung-kwok of South China Brokerage, Alfred Lai Chi-keung of First Pacific Davies, legislative councillor Chim Pui-chung, Edmund Lau Kin-on of EC Properties and other experts.

Panel members felt there was no need for the government to suppress property prices and believed the objectives of the government's actions were not clear.

''It seems they are always doing corrective work rather than preventative. They are not doing their homework and planning for these things,'' Mr Lai said.

The long-awaited property package announced by the government amid a flurry of publicity last month, was designed to help curb speculation and halt rising prices.

It caused a buzz of anger and confusion when Secretary for Planning Environment and Lands Tony Eason briefed stock analysts and estate agents on his reforms before presenting them to the Legislative Council.

Mr Law, who is also the spokesman for the Hong Kong Association of Democracy and People's Livelihood, said the mortgage policy in the package was unfair to first-time home-buyers.

He said the government should convince major banks to come up with a financial package giving first-time buyers a mortgage of 90 per cent, saying the government's present 60 to 70 per cent ceiling was a grave hindrance to them.

''First-time buyers also face the recent increase in interest rates,'' he said.

''Despite its effect in stabilising property prices, the present anti-speculation package does not help potential first-time buyers in the short term.'' Mr Lai, who is also first vice-president of the Society of Hong Kong Real Estate Administrators, agreed saying he and the panel felt the banks may be imposing a credit squeeze.

''It is unfair for banks to charge the same credit interest rate when they lend 90 per cent of the value, as when they lend 60 per cent. They are stopping a lot of prospective buyers because of this credit squeeze.'' Mr Law also called for the setting up of a new department that certified status and issues certificates to first-time buyers.

Another item brought up by the panel was the problem of ''over-the-border flat buying''.

Mr Lai said many firms from China starting up business in the territory were buying up flats as well as offices, adding to price increases.

He said the companies were buying up flats to use as quarters for their staff coming across the border to work.

''We feel the government should also consider these people coming over the border in their planning of how many flats are needed in the future.