The buying and selling of property is an important economic activity, but it is a process that Hong Kong has not managed to get right. This is a despicable state of affairs that reflects the power of this city's property cartel.
Over the past few weeks, irate buyers of uncompleted flats at several developments have complained about being misled by dubious sales techniques. Their grievances are nothing new. They are about the creation of a marketing mirage by manipulating the distribution of sales information. Rules were supposed to have been in place to combat the problem - but they have been proved inadequate.
The techniques for creating that illusion are all too familiar. A developer typically puts a small number of flats on the market. By pricing them at slightly below the market's expectations, the units are quickly snatched up by eager buyers. It is after this initial sales spree that the developer goes in for the kill. Another batch of flats is put on sale to the large number of buyers who have missed out - or think they have missed out - in the first round. As this batch of units is additional to the initial lot, the sales method is not strictly governed by the guidelines laid down by the Real Estate Developers' Association. Crucially, this means the developer is not even obliged to distribute a price list for all the flats available for sale.
In the latest incidents, such important information was selectively released by agents, who were appointed by developers, to individual buyers. In many cases, only piecemeal information was given out and only after the buyer had paid a deposit. In the heat of a buying frenzy artificially engineered inside a packed sales office, buyers were told it was a matter of now or never. Either they signed up for one of the 'last' remaining flats, or they would lose out to other eager buyers. Worse, in some cases, the slot for the seller's signature on the sales and purchase agreement was deliberately left blank to give the developer the option of rescinding the sale.
Only after buyers had signed for a flat and left the chaotic sales scene did it dawn on them that they might have made a purchase they would not have made in a less pressured atmosphere. Inside the crowded marketplace, the physical distance between them, the agents and other buyers was close. Nevertheless, they had in fact been barred from much of the information they needed to make an informed decision.
Economists theorise about the perfect market, in which buyers and sellers make deals on a level-playing field and have equal access to all the information. While that is an idealised situation that may exist only in textbooks, it should not mean that we have to accept the gross imperfections that permeate the city's market for new flats.