Hong Kong property developers investigated on suspicion of breaching transparency laws

Hong Kong property developers are being investigated for suspected breaches of the law by failing to provide sufficient information when selling new flats to the highest bidders, the city’s housing chief said on Wednesday. Frank Chan Fan told lawmakers that Hong Kong’s authority governing the sale of newly built properties was investigating cases in which there had been a lack of transparency. “The authority will strictly enforce the law based on evidence gathered,” Chan said at a meeting on housing at the legislature. The minister offered few details of the suspected offences but suggested the firms had failed to comply with a requirement that information be made available on previous transactions. He said the Sales of First-hand Residential Properties Authority would distribute letters across the industry to remind developers to disclose further details in their transaction registers. “We will also adopt measures to ensure these tender sales achieve the same [level of transparency] as open sales,” he said. Hong Kong property market bargains: where prices have fallen most in last six months Many new flats in Hong Kong are offered privately to the highest bidders instead of at fixed prices in sales offices or on the internet. These sales by tender were previously only for large properties in prestigious locations, but have recently expanded to include smaller flats. The law states developers must follow the same requirements for both sales methods, providing buyers with project details and market reaction. The transaction register also shows details of deals in which buyers did not enter into a sales agreement for a flat within five working days of signing a provisional contract. In addition it records flats for which a final deal was not struck. For open market sales, developers must release a price list at least three days before the official start date to allow prospective buyers to assess the fairness of the rates. But this rule does not apply to the tender process, and critics say this puts bidders at a disadvantage as they have no way to assess prices. The authority estimates 30 per cent of the 5,500 new flats that came onto the market in the first quarter of this year were sold through private tender. The quarter immediately before saw 14 per cent of 3,280 new flats sold through tender, according to analysts. Last week the Real Estate Developers Association (Reda), the industry body representing the city’s property developers, urged its members to guarantee 20 per cent of flats in new projects for the open market. The call was criticised by lawmakers who said the figure was too low. There’s money in property, and that’s good enough for Hong Kong Stewart Leung Chi-kin, chairman of Reda’s executive committee, on Wednesday said the organisation did not know who had breached the rules. He urged the government to disclose details. Reda said its members had agreed to upload all tender documentation to project websites, and to show in transaction registers any special offers or extra benefits enjoyed by previous buyers. The Civic Party’s Jeremy Tam Man-ho asked the housing secretary at Wednesday’s Legco meeting whether the government would impose conditions on future sales of public land to ensure developers built flats of decent sizes. He said the number of so-called micro flats had been on the rise. “This is absolutely doable. The government has done this before,” Tam said, referring to temporary regulations from the last administration on maximums and minimums. However, Chan said he believed in the ability of the free market to address the issue, although he did concede the micro flat trend was undesirable.

Hong Kong property developers investigated on suspicion of breaching transparency laws

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}Housing minister Frank Chan suggests firms have failed to release adequate information on previous transactions

Housing minister Frank Chan suggests firms have failed to release adequate information on previous transactions