Hong Kong developers water down new guidelines on controversial sales through tender
- The move comes just a week after the city’s biggest developer was prosecuted for breaching official rules around the tender process
An organisation representing Hong Kong’s property developers has relaxed its recent guidelines governing the controversial sale of new flats by tender.
The move by the Real Estate Developers Association (REDA) of Hong Kong comes just a week after the city’s biggest developer was prosecuted for breaching official rules around the tender process.
The sales method, in which buyers submit their bids in a closed, opaque process without knowing what the prevailing price is, has been heavily criticised as being unfair to the buyer and tending to inflate prices.
REDA’s original guidelines, released on May 9, stipulated that flats of under 1,076 square feet could not be sold through tender. The guidelines are not legally binding.
The revised guidelines state that flats with three or more bedrooms with a saleable area of between 753 and 1,076 square feet can in fact still be sold by tender. Houses, town houses and “special units” – such as duplexes or units with an accompanying flat roof, terrace or garden – can also be sold via tender if they measure less than 1,076 square feet.
“Since the issuance of our circular of May 9, we have received feedback from members suggesting that a rather more flexible set of criteria be adopted in the sale of flats by tender in order to better reflect different market segments and special circumstances,” said Stewart Leung Chi-kin, chairman of the executive committee at the association.