Hong Kong developers’ cash rebates of up to 50% draw regulator’s scrutiny
- Housing authority says it has noticed developers’ high commissions to agents to boost sales and that it could launch an investigation should the need arise
Social media has been abuzz with discussions on how developers are offering cash rebates – a form of under-the-table discounting through private negotiation – to attract buyers. These incentives, in some cases, can reach as much as 50 per cent of the value of a new property.
The Sales of First-hand Residential Properties Authority (SRPA) said it had noticed some developers were offering very high commissions to property agents to boost the sales of new homes, while agents were passing on such rebates to their clients.
Although both these practices are commercial arrangements, the authority said it could investigate “to see if there is any misrepresentation or dissemination of false or misleading information by the vendor to induce another person to purchase any specified residential property”.
The SRPA noted the registered transaction prices were much higher than the actual purchase prices paid by the buyers.
One social media post said a 28 per cent cash rebate was given to buyers of homes in Chill Residence in Yau Tong, jointly developed by Poly Property and L’Avenue International Holdings.