Vivien Chan, a lawyer turned property investor, has just stepped down as head of the Estate Agents Authority after serving for six years. She shares some of the highlights of her tenure
Vivien Chan stepped down as chairman of the Estate Agents Authority on October 31 after serving the maximum six-year term.
In November last year, Chan grabbed market attention when she bought a 5,700 sq ft house at Barker Road on the Peak for HK$538 million.
Chan is a senior partner of law firm Vivien Chan & Co, which also has offices in Beijing. She is also the founder of VCC Land, a property investment management and development group.
Chan started her career in London before returning to Hong Kong in the early 1980s. In 1985, she started her law firm and later expanded into property development through VCC Land.
VCC Land now owns more than 400 service apartments under the brand V.
During your six-year term at the Estate Agents Authority, what were the changes at the authority and the performance of the real estate industry?
When I first joined the authority, I set a goal for myself. I wanted to let the general public know that the EAA is not a paper tiger. It is one with "teeth" and "power" to enforce its rules to crack down on malpractices in the real estate industry. Apart from law enforcement, we also needed to educate homebuyers. With homebuyers getting increasingly demanding, estate agents have no choice but to improve themselves if they want to close deals with smart clients. Today, the industry's professional standards have improved a lot and the EAA is often where homebuyers turn to whenever they feel they have been treated unfairly by estate agents.
Can you share some of your most memorable events?
EAA was behind the initial push in requiring estate agents to provide information on the saleable floor area of second-hand properties to increase transparency and raise consumer interest. This was in January last year, just before the Residential Properties (First-hand Sale) Ordinance - which requires developers base their prices on saleable floor area in new flats - came into effect in April.
I am also happy to see the majority of estate agencies comply with the rule as it fosters a healthy development in the industry. Our smooth implementation facilitated the government's move in extending the rule to developers to provide similar information on new flats. Now, pricing of all residential properties are based on saleable floor area and homebuyers know what they are paying for. It is a complete overhaul of the market practice. Using gross floor area had long confused homebuyers as the sale prices included space that was not in their flats.
We conduct regular checks on sale sites, agency shops and property websites to ensure compliance with the rule.
What were the difficulties in introducing the use of saleable floor area in the secondary residential market at that time?
As we are a self-financing organisation, we did not have the budget to promote the practice, although the government did give us free air time to promote it. We then liaised with the media to allow us to explain the importance of adopting the use of saleable floor area and also created a platform to answer questions of home seekers.
When you first took up the chairmanship in 2008, did the trade representatives accept you?
As I am a lawyer and came from a different industry, they did not know much about me. Their first impression was that I was a hardliner. It took a while to gain their trust.
Throughout my tenure, I had attended all the annual events hosted by the eight trade associations. It did not matter if they were held in Yuen Long or in Mong Kok, I would be there.
How did the EAA help the industry when it was affected by the global financial crisis in 2008 and the government measures to cool the market last year?
The global financial turmoil took a heavy toll on many sectors of the local economy and real estate was one of the hardest hit. The number of property transactions fell after banks tightened mortgage lending. In May 2009, EAA offered a one-off six-month licence fee concession to provide financial relief to estate agencies. In July last year, hundreds of real estate agents took to the streets to protest against the "spicy measures" imposed by the government to curb investment demand. The authority arranged a meeting with the government to express concern about how rising stamp duties could put estate agents out of work.
What were the developments in the real estate industry during the past six years?
As of last month, the number of agents had increased 52 per cent to 35,573 from 23,349 in 2008. The licences of 60 agents were revoked as they were no longer "fit and proper" to hold a licence because of various reasons. Of them, 30 were suspended in the first half of this year.
What is your plan for the house on Barker Road?
The new house will be for my own use. The decoration work is still continuing and it is a little bit behind schedule. I may defer our plan to move in after Lunar New Year.
What is your view on the prospects of the property market?
As an international financial centre, demand for housing and offices remained strong. I am bullish for the city's long-term prospects. For genuine end users, it will be best to own their properties but it is difficult to say for speculators. I am not a speculator and most of my properties are held for long-term investment.