Concrete Analysis | Hong Kong homebuyers need balance between transparency and simplicity
Developers and buyers have become used to new sales practices but some aspects, like sales brochures, still need to be improved
The Sales of First-hand Residential Properties Authority last month launched new measures and suggestions to further enhance the transparency of new home sales. But is this what potential buyers really need?
One of the suggestions is to have developers arrange the balloting session and the flat selection session on two separate days. The authority believes this would allow potential buyers to have at least one more night to think over their flat selection.
As required by the ordinance, developers have to provide sales brochures and price lists, and information of sales arrangements, at least seven days and three days before a sales day, respectively. This was aimed at ensuring home seekers have enough time to collect all necessary information for a purchase decision.
However, based on our experience, home seekers already have ideas about flat selection before they register to buy a flat. The suggestion is unnecessary and will impose extra restrictions on developers and make the sales process even more complicated, after the improvements of the past two years.
JLL research shows that average monthly new home sales dropped from 1,100 flats to only 600 in the first six months after the Residential Properties (First-hand Sales) Ordinance took effect on April 29, 2013. But they have since rebounded to an average of 1,500 flats. This shows that developers and buyers have got used to the new sales practices. So far, more than 180 residential projects with over 29,000 flats have been released for sale.
It is true that buyers are better protected under the ordinance. For example, sales brochures now offer more information about projects, and the ordinance has more rigid restrictions on show flats. Some of the rules, however, have not benefited home seekers.
Sales brochures are one of the problems areas. Under the ordinance, developers basically have to update the sales brochure for any remaining flats for sale every three months, even if there is only one flat left. It involves lots of resources and is time-consuming, thereby increasing their marketing costs.