New marketing rules hit Hong Kong residential sales

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In Hong Kong the Residential Properties (First-hand Sales) Ordinance came into effect at the end of April and it is already affecting sales of properties.

The new rules governing the residential sector mean that sellers are required to regularly update and maintain any marketing materials relating to the property they have on the market.

The aim of the new system is to offer buyers more protection by making sure that there is maximum transparency in the transaction process. Although fresh data has yet to become available, all expectations are that there will be a significant drop in sales as vendors resist the need to prepare new marketing materials to comply with the tighter regulations.

The moves come on the back of an increase in volume for transactions of small to medium sized residential units due to a slight fall in asking prices.

Figures from the Rating and Valuation Department show that 13,551 new homes are due to be completed in 2013 and a further 15,817 in 2014. The Transport and Housing Bureau forecasts that 67,000 new homes will be on the market over the next three to four years.

Thomas Lam, Knight Frank’s head of research and consultancy for Greater China said that the effects on the Hong Kong market will be a general slowdown in sales transaction volumes.

“Residential sales will fall about 10% this year, with mass residential prices dropping around 10% and prices in the more resilient luxury sector falling 5%,” he forecast.

With the high density living arrangements of many residents being an identifying factor of life in Hong Kong, the likelihood of any major changes to urban planning is slim in the short term.

Indeed, the residency permit offers currently on the table from an increasing number of EU member states means that Chinese investors are moving their interest, and their funds, further west.

If you are thinking of moving money abroad, you should always compare the travel money exchange rates offered by specialist currency firms with those available from the major banks to make sure you get the best deal.

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New marketing rules hit Hong Kong residential sales

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