Sunday, 27 July 2014

Who Has the Last Laugh?

Prospective buyers checking out the model of Mont Vert flats in Taipo
Can you hear the wicked laugh in the distance?

That's probably Hong Kong's richest man, Li Ka-shing, amused that 400 of the 492 flats on sale at Cheung Kong's Mont Vert project in Taipo were sold on the first day of sales yesterday.

This despite buyers not being able to view the flats at all -- even though it is stipulated by law. Under Section 44 of the residential properties ordinance, which took effect in April last year, developers of a newly completed project are required to make every flat -- or a comparable flat -- available for viewing by potential buyers.

If a developer is unable to do this, it needs to seek written consent from prospective buyers.

Cheung Kong claims "the personal safety of those prospective buyers will be endangered" if flats ready in the first phase were opened for viewing while there was ongoing construction on the second phase.

The flats here are affordable -- but some are very tiny...
However, many of these prospective buyers were willing to sign the agreement promising to buy without personally inspecting the flats -- which seriously harms the interests of the buyers.

The buyers of some of these Mont Vert flats, some of which are as small as 172 square feet, aren't probably going to be occupying them -- they are most likely going to rent them out to people who commute across the border to work, or to mainland students studying at Chinese University.

The tycoon looks like he is trying to alleviate the affordable housing situation by bringing out flats that are just under HK$2 million, but in reality how does a person live comfortably in less than 200 square feet with all their worldly possessions?

That is why Li is probably laughing at us again -- coming up with this "excuse" not to allow buyers to really see the actual space they are buying with about HK$2 million dollars, and they actually fall for it and purchase these micro flats anyway.

It just demonstrates there is a healthy demand for tiny flats -- and no doubt developers will think of even tinier places for people to live in, but also the hope that riding on the Li ticket will be the first step to becoming wealthier.

Are the boom times of flat speculation back again? Time will tell.

But in the meantime we can hear laughing in the distance...


2 comments:

  1. You are absolutely right in that Li Ka-shing is laughing all the way to the bank. While posing as someone who actually cares about the needs of the working and middle class, in fact he is reaping a huge profit from these tiny tiny apartments. Here's how he does it: On the surface, buying a flat anywhere in HK for under $2 million sounds reasonable. But, that would mean that if he sold a flat of a more humane and acceptable size of say 600 feet - he would be charging HK$6 million - which is way above the average for somewhere way out in Taipo. He would never be able to flog normal size apartments for that price. So in fact this is a type of legal scam.

    Secondly, how sad is it that there is one law for the average person, and another law for the super wealthy in HK. The HK government has allowed Li to ignore the very law which is supposed to protect the consumer. Hong Kong is gradually becoming the very thing that NO ONE who loves the place wants to see it become - just another Chinese city. And we all know what that means - local government working in collusion with big business, where the victim is always the same - the poor and middle class.

    SK Hunk

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    1. Hi SK Hunk! My sentiments exactly! Where is the government enforcing the law on Cheung Kong? But the loophole of getting prospective buyers to sign agreements not to view the flat means Li is off the hook. We aren't protected at all! Here's another op-ed that had my head nodding... http://www.scmp.com/business/article/1560685/hong-kong-needs-think-out-box-rents

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