HK government should regulate apartment sales

The Hong Kong government should regulate property developers' sales tactics to raise transparency, a lawmaker said, as Hong Kong’s Parliament conducted a special session on the collapse of HK$2.67-billion (S$474.89 million) of apartment sales by Henderson Land Development Co.

The Parliament conducted the meeting, which Henderson Land declined to attend, to discuss the 20 luxury apartment sales that fell through, prompting legislators' demands for the government to investigate the transactions.

The HK government increased its scrutiny on property developers after Henderson said it already sold an apartment at 39 Conduit Road in Hong Kong’s Mid-Levels district for a record price of HK$88,000 psf.

"What's happening is a failure of existing regulations," said Wong Kwok-hing, chairman of the Legislative Council's Housing Committee.

Henderson explained that its appearance during a meeting would be "inappropriate" because it has "sufficiently disclosed" details on the transactions and a proposed investigation is still under way.

The HK government is trying to curb a 38 percent increase in home prices which started in 2009. It introduced nine rules on new home sales last month, which include the use of show flats developers used to entice property buyers before a building is completed. These measures have no statutory power and are rules the Real Estate Developers Association requires its members to follow, said Mr. Wong.

The government is looking for details from Henderson, which is controlled by billionaire Lee Shau-kee, on the sale agreements following the cancellation of 20 of the 24 sales at 39 Conduit Road.

The property developer has repeatedly denied all alleged wrongdoing in the way it handled the transactions. It said recently that "the company strongly rejects" all allegations that there have been irregularities in the sale of the apartments.

The government has already submitted all letters exchanged between the Lands Department and Henderson to the Legislative Council (Legco), according to Duncan Pescod, Transport and Housing Permanent Secretary. He, along with other government officials, declined to comment on the investigations into the collapsed sales.