Our powerful developers have to be pacified one way or another. So it should come as no surprise that while one government minister talked tough, another gave way.
Professor Chan Ka-keung, the Secretary for Financial Services and the Treasury, sounded all brave and defiant when he said property curbs introduced by the government in recent times would not be relaxed. The risks of an asset bubble remained, though Chan insisted that the government measures, such as doubling the stamp duty on residential and non-residential properties above HK$2 million, were working. That's all fine and dandy.
Developers and big business, of course, have been pressing the government to relax or even cancel some of these measures. But just when you thought the government was standing up to the developers, the transport and housing chief bore a generous gift. Professor Anthony Cheung Bing-leung announced that the government would allow the presale period before flats are completed to be extended from 20 months to 30.
Wow, that's some gift for the big property boys! The extension, which will take effect soon, will enable developers to clear a stock of 15,000 flats. Since interest rates are expected to rise and property prices to stay flat or fall, the developers can now offload the downside risks to the little guys, the buyers, with the full support of the government. No wonder the deputy chairman of Lai Sun Development, Chew Fook Aun, welcomed the measure.
But Real Estate Developers Association chairman Stewart Leung Chi-kin, who has been among the nastiest critics of the government measures, was still not satisfied, calling on the government to speed up the presale approval process. Some people are just too hard to please.
The government, of course, claims it's doing all this for the public to meet market demand for new flats. If the presale period is extended, Cheung said, buyers would have more flats to choose from instead of competing to buy a small pool of uncompleted flats.
Really, Anthony! If buyers expect prices to fall, they would not be rushing into the market. It's only the sellers, the developers, who are desperate to offload their stock. Cheung should at least be honest about it instead of treating us like fools.