High management fees likely for single-block developments, say property specialists

Property specialists note that the government is pushing small developments to boost flat total

PUBLISHED : Friday, 25 July, 2014, 3:42am
UPDATED : Friday, 25 July, 2014, 9:18am

The growing trend towards single-block flat developments as a result of the government's aggressive hunt for building land is likely to push up management fees for buyers of both private and subsidised flats.

This warning came from property specialists yesterday after it was disclosed that buyers of Home Ownership Scheme (HOS) flats in a remote Lantau town would pay management fees almost equal to their mortgage payments and more than those for at least one luxury estate.

Buyers at Tin Lee Court in Tai O, a 19-year-old block of 85 flats converted from public rental to HOS, will pay fees ranging from HK$2,043 to HK$2,073 a month for their flats of 478 to 482 sq ft.

Chan Kwok-hung, one of 12,500 people who applied in June to buy flats, attracted by prices of HK$641,100 to HK$897,300, said he had changed his mind.

"It's not cheap at all if we also consider management and commuting costs," said Chan, who had planned to buy a flat for his daughter. "I'm afraid the fee will escalate to HK$3,000 with inflation and ageing of the building."

The fee is close to the monthly payment of HK$2,500 on a 25-year mortgage and, at about HK$4.20 a square foot, is higher than the HK$3 per sq ft paid at luxury Pok Fu Lam estate Bel-Air.

The Housing Authority, which runs the Tai O project, said the high cost was due to a small number of flats sharing high fixed costs such as those for maintenance of lifts and fire systems.

But the case is only the tip of the iceberg, as many sites of less than a hectare are in the government's land-sale programme for private flats or proposed for rezoning to build subsidised HOS flats.

"The approach of adding housing regardless how small a site is should be discarded," University of Hong Kong real estate professor Chau Kwong-wing said. "The projects are not cost effective, they face strong political resistance and ruin the original planning of the community."

Three HOS projects in Sha Tin and Yuen Long, to be sold by the end of the year, are single blocks with about 200 flats each.

The chairman of the authority's subsidised housing committee, Stanley Wong Yuen-fai, said: "We have learned a lesson. In future planning, we should consider if public housing is workable on remote sites and in small projects."

Monthly charges

Comparison of management fees (per square foot)

Tin Lee Court, Tai O, HOS flat: HK$4.2

HOS flats on larger developments: about HK$2 on average

Private flat with club facilities in Bel-Air, Pok Fu Lam: HK$3-3.5

The Arch, West Kowloon, private flat with club facilities: HK$5

Note: Prices in terms of saleable area; sources: Centaline Property Agency, Housing Authority