Property row does little for public confidence
Self-regulation is often regarded by some as the best approach for an industry in Hong Kong society. Only when industry practitioners fail to put the house in order should the government intervene for the sake of public interest. But this formula may not always work. The escalating war of words between officials and the Real Estate Developers Association over allegedly misleading remarks made by a senior executive has aroused concerns that sometimes neither self-regulation nor government intervention could address the issue in question.
The controversy stemmed from a message left by William Kwok Tze-wai of Cheung Kong in an internet blog shortly after the finance chief announced new special stamp duties to dampen property speculation on November 19 last year. Officials are adamant that Kwok was misleading in telling prospective buyers that they would not be caught by the new measures as long as a preliminary sales agreement was signed before midnight. But their demand for a formal investigation was brushed aside by the association, as revealed in the correspondence subsequently disclosed by the Transport and Housing Bureau. Reda argued that Cheung Kong and the government merely had different interpretations on the legal status of preliminary sales agreements and therefore it was a legal issue, which the association was not in a position to handle. It went on to challenge on what basis the government claimed it 'reserves all rights in the matter'.
Exchanges like this do not help assure the public that the government and the industry are taking effective steps to handle issues that stir public outcry. While officials may have scored points by disclosing the letters to reinforce the impression that the developers' group is no more than a private club set up for their own interest, it shows the government is also powerless in rectifying problems that the industry is unwilling to tackle. If the remarks are deemed misleading to prospective buyers, the public expects strong intervention from government to rectify the situation. Such indirect public censure falls short of public expectations.
Regrettably, the developers' association also does not take its self-regulatory role seriously enough. Although Reda is established 'to represent, promote and further the interests of real estate', one of its 19 objectives is to 'consider, investigate and inquire into all matters and questions in any way related to real estate', according to records of the Licensing Office of the Hong Kong Police. The issue is a serious one. It raises concerns whether there is dissemination of false information and misrepresentation in the sale of new residential properties. The association was not being responsive enough when its compliance committee decided only to refer the matter to the government and Cheung Kong.
The property sector is one of the major economic pillars in Hong Kong. It is only natural for people, most of whom are spending more than half of their hard earned money on their property, to continue to keep a close watch on every step made by the developers. The association, in the wake of a series of media reports criticising its lack of transparency and accountability, has sought to rebuild its image by commissioning a public relations agency to better communicate with the media. A website to promote the association's work is also being prepared. It is in the association's own interest to take more positive measures to enhance its public accountability and dilute the negative image associated with property developers.