Record complaints as overseas sales sting Hong Kong investors
Estate agents’ body calls for more education on risk after units at malls also turn sour for many
A leap in complaints about properties bought overseas resulted in the regulatory body for estate agents dealing with a record number of cases last year.
The Estate Agents Authority (EAA) said on Tuesday it received 475 gripes in total, up 51 per cent on 2015. This was largely the result of an 184 per cent surge in complaints to 156 cases from those buying properties outside Hong Kong and investing in local malls, EAA chairman William Leung Wing-cheung said.
“The situation might be caused by more and more estate agents participating in these types of transactions when the local residential market is stagnant,” he said.
The most common complaint was about “inaccurate or misleading property information”, particularly regarding units in malls.
Meanwhile, the surge in cases concerning overseas investments corresponded with the increasing number of people, now estimated at 514,000, putting their money into property outside the city, property investment service IP Global said.
While the EAA is responsible for regulating local property transactions and investments, Leung said it has no mandate to regulate city agents who sell overseas properties.
“We cannot even require [them] to be licensed with the EAA,” he said.
“So if we cannot touch them, we can only educate our local investors and explain to them the kind of risk they are getting into.”
But the EAA would continue to “maximise its efforts on public education”, including the launch of a new consumer education website next month, more public seminars, and a new televised public announcement.
“If we break down the issue, it’s basically the investors’ education, they have to be aware of the kind of risks they are getting into,” Leung said. “If there are intermediaries in the whole deal, the intermediaries should be doing their job properly.”
Lawmaker James To Kun-sun has in the past called for measures making agents accountable when they market non-local properties.
“I have been advocating tighter regulation of these activities for 10 years or more, but the government still says ‘no, it’s not right to do it’, so there’s a clash of principles,” he told the Post last September. “We must at least make it better for Hong Kong law to protect people buying overseas property.”
But Leung said it was difficult to regulate overseas cases given the different regulatory regimes and languages involved across the globe. “This is a problem that cannot be resolved solely relying on legislation,” he said.
The rise in complaints could be attributed to a few bad actors or transactions, but the lack of affordable properties in Hong Kong would attract increased marketing from overseas projects, James Fisher, director of market analysis at Spacious Hong Kong, said.
Education and warnings about risks were always welcome, but he warned: “Investors always need to be looking out for themselves in the markets, you can’t expect the regulators and government to always be ahead of the bad guys.”
The EAA also saw a record number of cases concerning the sale of first-hand residential properties, which rose 72 per cent in 2016 to 74 cases.
The most serious complaints included the issuance of non-compliant adverts, failure to honour rebate promises, and misleading mortgage information.