Hong Kong developers vow to sell 20 per cent of housing estate flats on the open market, yielding to criticism of unfair tender process
- The decision by the Real Estate Developers Association was sharply criticised for not going far enough
- It comes amid a steep climb in the use of sales via tender, an opaque bidding process that puts the buyer at a disadvantage
The industry body for Hong Kong’s property developers said its members would from now on ensure that 20 per cent of flats in a new project are sold on the open market, as the government warned it could take action against those that sell through tender.
Lawmakers have slammed developers for the increasingly widespread and “unfair” practice of selling new flats through tender, a marketing tactic they claim puts the buyer at a disadvantage. And they were quick to criticise Thursday’s decision by the Real Estate Developers Association (REDA) for not going far enough.
According to government figures, use of the tender process, in which homes are sold to the highest bidder, has doubled recently as the city’s builders try to push up prices amid a slumping market.
The practice has raised concerns among senior government officials and regulators, who have urged developers to use the more transparent method of selling on the open market.
“Think how much a buyer has saved for his whole life to buy a property, only to find himself in an unfair transaction environment, not fully informed and not even knowing the price,” said Andrew Wan Siu-kin, deputy chairman of the Legislative Council’s housing panel.