Paul Chan vows to get tough on Hong Kong property developers hoarding flats
Finance chief also promises action on property sales tactics, such as making places available to the highest bidder, with no reference price
Hong Kong’s finance chief has vowed to stop developers hoarding flats, as he promised to take the issue of land and housing in the world’s most expensive property market to the “highest level of government”.
At a press conference on Wednesday after delivering his budget speech, Financial Secretary Paul Chan Mo-po also said the administration would tackle “undesirable” sales tactics used by developers, such as requiring buyers to bid for flats instead of giving a clear price per square foot.
“[Land and housing] is a very important topic, touching the heart of the people in Hong Kong,” Chan said.
“[The issue] would need to be [tackled] at the highest level of government with a holistic view.”
Chan said the number of unsold flats in completed property developments had been on the rise while the government was making every effort to increase housing supply.
“We want to make sure that this supply really comes to the market in a timely fashion,” he said.
As of September last year, there were 9,000 unsold flats in private developments. Of those, 4,000 were in projects completed last year, 31 per cent of the flats completed in the year.
That compared to 2,000 unsold flats from projects completed in 2016 and 1,000 from those completed in 2015.
There is no rule saying developers must sell their completed flats within a certain time.
In his budget, Chan said the private sector would complete about 104,000 flats in the next five years, an increase of about 50 per cent on the previous five years.
He also said the government would look at developers’ sales tactics, such as putting their flats on offer to the highest bidder.
He gave an example of a site where the developer had completed 300 flats but only put two flats up for offers while hoarding the rest.
“This is undesirable,” he said.
Such tactics have come in for criticism in recent years, with some observers saying developers push up prices by selling flats to the highest bidder without giving any reference prices per square foot.
New World Development, for example, sold flats at Sai Kung development Mount Pavilia and Sai Ying Pun development Artisan House this way.
The Sales of First-hand Residential Properties Authority was founded in 2013 to regulate developers’ sales tactics, but it has drawn increasing criticism for doing little.
Hong Kong is the world’s most expensive city for housing, according to the Demographia International Housing Affordability Survey. Since 2003, private home prices have risen by 445 per cent, and people wait almost five years on the public housing waiting list.