Cheung Kong to obey new flat rules early
Updated: 2009-11-25 07:32
(HK Edition)
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The headquarters of Cheung Kong Infrastructure Holdings Ltd in Hong Kong. Bloomberg News |
HONG KONG: Cheung Kong (Holdings) plans to sell 400 homes this year at a Hong Kong project that will be the first to be priced since the government announced a clampdown on misleading sales tactics by developers.
The blue chip developer will start sales at the 1,416-apartment development, called Le Prime in the New Territories, "in a few days," Francis Wong, director of the company's real estate arm, told reporters yesterday.
Wong said Cheung Kong will display prices for homes in Le Prime calculated according to usable space as well as in conformity with the previous method in which a portion of common areas was included to devise a price per square foot.
"There is no pressure" on Cheung Kong, Wong said. "We will start selling under the new rules before they are supposed to take effect."
Hong Kong's government said last week that developers selling unfinished homes will have to price their apartments according to the usable floor area, provide clearer information on floor numbering and report preliminary sales and purchase agreements within five working days instead of one month.
Developers have included a portion of common-use areas of buildings in the square footage of their sales pitches. Builders typically set aside 20 percent to 30 percent of the projects as common-use areas, Cusson Leung, a Credit Suisse analyst, said November 20.
The restrictions come after lawmakers criticized Henderson Land Development for selling an apartment on the "68th" floor of a 46-story project last month. The government threatened to intervene to prevent an "unhealthy" market after record-low mortgage rates spurred a 30 percent gain in apartment prices this year.
The marketing restrictions were reached in an agreement between government and the Real Estate Developers Association of Hong Kong and take effect at the end of this month, Chief Executive Donald Tsang said November 20.
The jump in Hong Kong home prices sparked a public outcry over housing costs, putting pressure on the government to increase land supply and review its regulation of developers.
Hong Kong acted earlier by increasing required downpayments on luxury homes to 40 percent from 30 percent.
The target minimum price of Le Prime's three-room apartments, covering 1,069 square feet, is HK$5.8 million ($748,000), equivalent to HK$5,500 a square foot on a total area basis, Wong said. Cheung Kong will provide prices on a usable area basis when it issues the price list, he said.
China Daily/ Bloomberg News
(HK Edition 11/25/2009 page4)