Hong Kong developers halt sales while brochures rewritten for new rules
Developers tell agents to suspend activity at 30 projects while promotional material is updated
Developers will suspend sales of unsold flats at more than 30 new residential projects next week to comply with a new law requiring them to specify the size of flats in all their marketing material as well as provide additional information on the developments.
Under the new law governing sales of new homes due to take effect on April 29, developers are required to provide comprehensive information on their projects, including the "saleable floor area", a detailed location plan of the development, and the name of every street that is situated within 250 metres of the boundary of the project.
Until now the practice has been to advertise new flats by referring to their "gross floor area", which includes common areas such as lift lobbies, clubhouses, electricity meter rooms and rubbish collection areas. The saleable floor area of a property is the actual usable space of the flat, balcony, utility platform and verandahs.
"We have been informed by seven developers to stop selling the remaining units at more than 30 of their projects next week," a director at Midland Realty, Sammy Po, said.
An associate director of developer Sino Land, Victor Tin Sio-un, said the firm told agents to stop selling flats at 22 of its projects by April 22, as developers were required to publish sales brochures of new projects seven days ahead of their official launch.
"As sales brochures of these projects need to be changed in accordance with the new rule, we are working closely with architects, surveyors and lawyers to come up with brand new versions," he said.
Given the time-consuming preparation required, Tin said, priority would be given to four projects recently launched for pre-sale, while those that had been on sale for a long time would be changed later.
The deputy managing director at Sun Hung Kai Properties, Victor Lui Ting, said the firm was working on its sales brochures as the law would be strictly enforced in less than two weeks. It has already issued a brochure for Riva in Yuen Long that complies with the new rules.
Only a few developments had unsold flats at the moment, Lui said. There were seven flats at The Wings II in Tseung Kwan O, while just 1 to 2 per cent of the flats at The Wings Phase One and Century Gateway at the Tuen Mun MTR station remained unsold.
"As we do not plan to unload these remaining units at a discount before the new rule, we need to replace the marketing material for these projects even though only a handful remain unsold," he said.
Centaline Property managing director Louis Chan Wing-kit said some developers might be forced to defer sales of new flats because they needed more time to prepare new marketing material. "Besides the need to comply with the new rule, sales are also being hit by weakening buying interest," he said. Buyers were holding waiting for developers to offer better prices.
Chan said he believed developers would have to offer luxury residential developments at prices some 20 per cent below peak levels achieved earlier this year to offset the heavy property tax to be levied on buyers.
On February 22, the government announced a doubling of stamp duty on residential and non-residential properties valued above HK$2 million, four months after the introduction of a new 15 per cent tax, known as the buyer's stamp duty, on non-local and corporate property buyers.
Under the new regime, non-local and corporate buyers of apartments priced at between HK$6 million and HK$20 million will pay total taxes of 22.5 per cent.