Private Residential Property Sales and Prices

Despite the marked upsurge in the first quarter, the private residential property market had a rollercoaster ride in 2005. Largely due to strong market activity in the first quarter, the total transactions registered increased by 3 per cent from 100 630 in 2004 to 103 362 in 2005, the highest level since 1997. The overall residential price index at the end of 2005 rose 6 per cent over the previous year.

Tenancy Control

The Landlord and Tenant (Consolidation) (Amendment) Ordinance 2004 took effect on July 9, 2004, putting an end to security of tenure for domestic tenancies and the statutory minimum notice requirement for terminating non-domestic tenancies. Such security of tenure provisions had impeded market efficiency. Their removal was in line with the Government's policy of minimising intervention in the operation of the property market.

Estate Agents

The Estate Agents Authority (EAA) is an independent statutory body responsible for licensing and regulating estate agents. Under the Estate Agents Ordinance and the Estate Agents (Licensing) Regulation, all estate agents are required to obtain a licence to practise.

Two other regulations — the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation and the Estate Agents (Determination of Commission Disputes) Regulation — also regulate the industry. The former stipulates rules relating to the conduct, duties and practice of licensed estate agents. The latter prescribes rules and procedures for the EAA to mediate in disputes between estate agents and their clients over commissions and fees. There is also the Estate Agents (Registration of Determination and Appeal) Regulation which prescribes the procedural rules for lodging appeals to the District Court against the EAA's determinations.

Sales Brochures of Uncompleted Residential Properties

Developers of private residential units may apply for consent from the Director of Lands to put up units for sale before completion. To ensure that essential information is provided to prospective purchasers before they decide whether or not to enter into property transactions, the Real Estate Developers Association of Hong Kong (REDA) has set up a self-regulatory regime under which its members need to provide adequate and accurate information in sales brochures in accordance with REDA's guidelines. There is close liaison between REDA, the Government, the Consumer Council and the EAA to keep the regime of self-regulation under review and to identify scope for further improvement in the light of operational experience.