November 20, 2009
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<Comments on Government’s measures on property market>
Below are highlights (see MingPao for details)
(1) 發展商須在臨時買賣合約簽署後五個工作天內，公布未建成一手住宅物業的交易資料
— Timely market information can enhance efficiency and transparency. But we need accurate information as well, accurate in the sense that we know whether buyers are connected persons. Or transactions are related to other buy-back or under-the-table agreements (I buy it now but you promise to buy it back later, something similar to repurchase agreement in the bond market)— This is the only sensible measure amongst 4
(2) 在價單上列出每個單位每平方呎／米「實用面積」的價格
— In principle, more prices disclosure are good. But you don’t disclose confusing ones. Basically, all prices in the secondary markets are on construction area (建築面積); The measures could make prices between primary and secondary prices incomparable somewhat. But I admit this will only have small adverse impact, since prices basing on construction are also in the price list.(3) 在售樓說明書內更顯眼地列出有關樓層編號的資料。上述新措施將於十一月底正式落實
— Red-herring. Just address populists’ non-sense criticisms
(4) 針對發水樓的問題，不再提供額外誘因給發展商，興建環保露台等設施。不排除日後立法，強制要求發展商加入環保設施
— More confusing one. Simply speaking, Construction of those balconies are NOT free. If you have 1100 sq-feet, including a 100 sq-feet balcony, the price you have to pay does not matter whether these 100 sq-feet is free or not. But it could be more complicated, think of the following— If developers have to pay land premium for the balcony and such area is NOT deducted from total construction area, they will probably charge you MORE, not less, on a per sq-feet basis. The total price you pay will probably rise indeed.
— If developers are forced to build and such area is deducted from total construction area, that means the remaining area – the area for other parts of the home (living room, bedroom etc.) – will be smaller. Unless you value balcony more than, say, bedroom, you have to pay for something that you value less. The total price is unlikely to gain in this case (unless market really dislikes the balcony), but you are paying the same price for something you value less.
Take another numerical example. If the total construction area is 1100 sq-feet, and the government forces developer to build a 100 sq-feet balcony, then only 1000 sq-feet is left.
That 100 sq-feet could originally go to your bedroom, living room or kitchen. Now they are as a whole 100 sq-feet smaller. You have a balcony at the expense of other parts. Your room is smaller (originally it could be 1100 + 100 sq-feet balcony), and you have to pay for something you really value less.
