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Following is a question by the Hon Ma Fung-kwok and a written reply by the Secretary for Transport and Housing, Professor Anthony Cheung Bing-leung, in the Legislative Council today (19 December 2012):
Question:
According to the Housing in Figures published by the Hong Kong Housing Authority in early 2012, while there are some 2.6 million residential flats in Hong Kong, there are only 2.35 million households. During the first nine months of 2012, the overall flat prices rose by 20%, surpassing the 1997 peak by 26%. It has been reported that the rents for private residential flats have increased for seven consecutive months. On the other hand, some members of the public have relayed to me that it is not uncommon to find a large number of flats being left vacant for a long period of time in some housing estates. In this connection, will the Government inform this Council:
(a) whether the Government has drawn up a clear definition of "vacant properties"; if it has, of such definition; if not, the reasons for that; of the measures it had adopted in the past to check the actual situation of private residential flats being left vacant;
(b) whether it knows the vacancy rates for private residential flats of various sizes and prices in the past five years (broken down in accordance with the following tables); and
(i)
Size
(square metres) 2007 2008 2009 2010 2011
Below 40
40 to 69.9
70 to 99.9
100 to 159.9
160 or above
(ii)
Price
(million dollars) 2007 2008 2009 2010 2011
2 or below
2.01 to 6
6.01 to 10
10.01 to 20
20.01 or above
(c) whether the Government will consider introducing a "vacant property tax" so as to increase the cost for property owners to keep their residential flats vacant, with a view to releasing more residential flats into the market so as to increase the supply of flats, thereby alleviating the pressure of rising prices and rents for residential flats; if it will, of the details; if not, the reasons for that, and the circumstances under which it will consider introducing a "vacant property tax"?
Reply :
President,
Our response to the three parts of the question raised by the Hon Ma are as follows.
(a) The Rating and Valuation Department (RVD) conducts a survey every year to provide a snapshot of the year-end vacancy position of the private domestic stock. This survey comprises: (i) a full survey in respect of domestic premises completed within two calendar years; and (ii) a random sample survey covering 3% of the remaining premises. The survey findings are provided in the Government's annual publication known as the "Hong Kong Property Review".
According to RVD's practice, if a unit is not physically occupied at the time of the survey, it will be treated as a "vacant property". Premises under decoration will also be treated as "vacant".
(b) The breakdown of the vacancy rates of private residential properties in the past five years (2007 to 2011) by flat sizes are as follows:
Size
(square metres) 2007 2008 2009 2010 2011
Less than 40 2.9% 2.7% 2.5% 2.7% 2.3%
40 sq m to
69.9 5.3% 5.2% 4.1% 4.5% 4.0%
70 sq m to
99.9 6.4% 7.1% 6.6% 7.7% 7.7%
100 sq m to
159.9 7.5% 7.8% 9.6% 7.6% 9.2%
160 or above 10.4% 11.1% 12.7% 12.9% 10.2%
As prices will change very often in accordance with market situation, it is difficult to have a meaningful comparison among the figures of different years. As such, all along we have not broken down vacancy rates by different value classes of private residential properties.
(c) Figures from RVD suggest that the overall vacancy rate of residential properties as at end 2011 was 4.3%, which was the lowest since 1997 and was below the average of 5.0% over the period from 1991 to 2010. Such a relatively low level of vacancy rate indicates that flat hoarding does not seem to be a root cause of the property market boom over the recent two or three years. Indeed, the exuberant residential property market in these few years is mainly a result of the abnormal low interest rate and abundant liquidity environment, as well as the tight supply of residential properties. As such, vacancy tax on residential properties may not be an effective measure to address the current housing situation. Nevertheless, the Government will continue to closely monitor the trend of the private residential property market, and will introduce suitable measures as necessary to ensure its healthy and stable development.
Ends/Wednesday, December 19, 2012
Issued at HKT 12:34
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