14 March 2012
RICS supports quoting prices of new flats with saleable areas
Further recommends new regulations to be applied to second hand properties
The Royal Institution of Chartered Surveyors (RICS) Hong Kong supports the government’s proposal to regulate sales practice of new flats. RICS Hong Kong has submitted its recommendations to the administration earlier and welcomes the adoption of the relevant recommendations in the proposal.
Over the past few years, RICS Hong Kong has been stressing the need of using saleable area and supports the measure put forward by the proposal. RICS further recommends that this measure be applied to second hand residential property market as well, so that saleable area is the only prevailing standard. This fairer practice offers more accurate market information to homebuyers. RICS will discuss with government officials with regard to the new measures, hoping the new rule applies to second hand properties as early as possible.
RICS Hong Kong supports the government’s measure to regulate marketing information of newly constructed homes, including announcing price lists and sales brochures 3 days ahead of launch of flats, stating the elevation above ground level of flats and the distance to roads clearly in sales brochures, and disclosing property transactions online within 24 hours of temporary contract. These stipulations allow consumers and citizens to have more accurate information. RICS believes accuracy and announcing time of sales information are equally important. Therefore, RICS advocates sufficient monitoring after enactment of the laws, to ensure the sales information are accurate and announced on time.
RICS Hong Kong is also in favour of the bill, which introduces criminal sanctions on misrepresentation and dissemination of false or misleading information. However, RICS hopes to have a clear definition of criminal liability and sanctions, including that of property developers, property agencies etc, avoiding sacrificing the businesses of related parties.
At the same time, RICS Hong Kong calls for a cooling-off period for both homebuyers and developers, but believes further consultation of the public and the industry is necessary so that both parties can agree on the amount of forfeiture of calling off the deal, or the ratio of the forfeiture to the transaction amount.
Mr David Tse, Chair of RICS Housing Task Force, said, “the new measures can improve transparency of transaction details of newly launched flats and allow a unified definition to calculate the area of a unit, and this is an important step forward. Since purchasing homes are mostly the largest lifetime investment of the average households, we recommend that the use of saleable area for price calculation be extended to second hand housing market. By this consumers’ interests can be better protected.”