THE Government says it gave developers the go-ahead to pre-sell only 18,323 flats last year further highlighting Hong Kong's worrying slowdown in private residential supply. The figure, released yesterday by the Lands Department, compares with an historical average private sector supply of about 35,000 new flats a year. In response to criticism that the Government has been dragging its feet in approving pre-sales, Lands Department principal solicitor Tom Berry said it would start contracting out some of the paperwork to private-sector solicitors to speed up the vetting process. Developers have complained of waiting up to a year for Government approval to begin marketing pre-sale flats because of red tape. Mr Berry yesterday conceded that the average wait was now 51/2 months - which, according to analysts, has been holding up supply. Developers are still hoping to persuade the Government to relax restrictions requiring a 12-month period between applying to pre-sell and a development's date of completion. They argue it should be extended to 18 months or two years as this would compensate for delays and help speed up supply. Discussions are continuing between Housing Secretary Dominic Wong Shing-wah and the Real Estate Developers' Association (Reda). Mr Berry said the Lands Department gave consent to 36 projects last year, allowing for the pre-sale of 18,323 flats. Many approvals came in the final quarter, meaning most of the new flats should be completed by the middle of this year. Four of the 36 developments, however, are under the Hong Kong Housing Society and will not be completed until after June next year. The existing slowdown in supply also reflects a sharp slump in new housing projects started by developers after the Government intervened to cool the residential property market in 1994. Many developers reacted by stalling planned projects. With demand now raging, developers are struggling to provide adequate supply, which has helped fuel the recent sharp rise in prices. 'We're seeing among the lowest supply levels since World War II,' Nava SC Securities analyst Stephen Brown said. 'Even in the 1960s, we were seeing consents exceeding 30,000 units.' In 1994, the Government introduced measures to cool the housing market, including shortening the period for pre-sales to nine months before completion. This was later extended to 12 months after strong developer protests. The Lands Department yesterday said it had given consent for just 29,280 units since the June 1994 clampdown, in stark contrast to the 30,485 units it approved in 1993. As of the end of last month, Mr Berry said, the Lands Department was processing 20 new applications for pre-sale consent, covering 13,679 residential units scheduled for completion between late this year and March 1998. 'We hope to approve two to three developments or about 3,000 flats in the next couple of months,' Mr Berry said. 'A lot of processing time depends on how quickly developers respond to our queries.' Developers have complained that despite the 12-month allowance, Government bureaucracy means they cannot actually start pre-selling flats until six to seven months before completion. After discussions with the Law Society and Reda, the Lands Department has decided to look at proposals to speed up the pre-sale consent process by farming out some of the legal work to the private sector. Agreement on the Deed of Mutual Covenant, which details the use of common area in a development, is typically the most complex and time-consuming legal aspect. 'We will try one or two cases first on an experimental basis, but basically, private solicitors will do all the work, and we will issue the final approval,' Mr Berry said. Reda, which represents most of the territory's big developers, yesterday applauded the move. 'We've been saying this for years; it's this legal aspect which is the most time-consuming,' Wai Siu-yu, Reda spokesman said. 'Getting private solicitors will release the workload of the Lands Department and this is good news if the Government is serious about this.' Mr Wai said there had been cases in which developers obtained permission to start pre-selling just before a development was completed, and in some cases only after another Government department had granted an occupation permit allowing buyers to move in. As for the June 1994 blanket ban on buyers speculating in pre-sale flats before completion, Mr Wai said developers were happy for that to remain. He said: 'We have always been saying that as long as there is the anti-speculation measure not allowing change of ownership until occupation is in place, there's no harm in relaxing the period by six to 12 months.' Last week, developers voluntarily agreed to clamp down on the speculator's latest trick of trading rights to buy flats in new developments through shell companies. Cheung Kong vice-chairman Victor Li Tzar-kuoi yesterday conceded that speculation in the right to buy flats had become rife. He also said the Government was correct in its decision not to directly intervene with legislation to cool the market, instead continuing to monitor the situation.