CURRENT PERFORMANCE INDICATORS

Hong Kong has one of the world's most active real estate markets, with an average of 777 transactions in property every day in 1995, compared with 430 in Tokyo and 235 in Singapore. The real estate services industry covers development and leasing services, maintenance and management, as well as brokerage and agency services.

• The industry accounted for about 11.9% of Hong Kong's Gross Domestic Product in 1994 and provided 72 000 jobs locally in 1995.

• The production-based Gross Domestic Product contribution of the industry amounted to $113.2 billion in 1994, compared with $91.6 billion in the previous year.

• Building development in the private sector underwent a period of consolidation. A total of 1 080 buildings, with 3.8 million square metres of floor area, was built at a cost of $29.4 billion in 1995, as compared with nearly 1 300 buildings in 1994.

• Some 200?00 property transactions with a total value of $310 billion were conducted in 1995.

• There were 1.6 million registered property owners in 1995, an increase of 1.8% over 1994.

• There were about 4 800 registered estate agents in 1995, compared with 964 in 1985.

THE GOVERNMENT'S COMMITMENT

The Government is committed to maintaining Hong Kong's status as an active and efficient real estate services centre capable of meeting the demands of both local and international customers. We seek to achieve this by :

• encouraging self-regulation of the professions involved and introducing registration certificates for authorised persons to ensure that their services remain efficient and reliable and meet the highest professional standards;

• establishing a sound and effective regulatory system to govern the operation of real estate agents. We have introduced the Estate Agents Bill into the Legislative Council with a view to establishing a licensing system with legal backing; and

• improving the efficiency of relevant government departments which facilitate the provision of real estate services. For example,
  • The Lands Department will be able to speed up the processing of lease modifications and land exchanges when its computerisation programme is completed by mid-1996 at a total cost of $28 million.

  • The Land Registry began to operate as a trading fund from August 1993 in order to improve the quality of services to customers.

  • The Buildings Department has reviewed its administrative procedures and enhanced the efficiency of the Building Authority in monitoring the practices and performance of the construction industry and building professions.

POLICY DIRECTIONS

We propose to :

• afford greater protection for consumers involved in property transactions by introducing legislation to set up an Estate Agents Authority to regulate the operation of estate agents;

• identify ways of improving the quality and reliability of sales information relating to uncompleted properties in Hong Kong by examining the recommendations in the Law Reform Commission Report on Description of Flats on Sale;

• raise the service standards of the professions in the industry by :
  • promoting the establishment of professional associations; and

  • encouraging self-regulation through the development and enforcement of professional codes of conduct;

• ensure a steady supply of trained personnel for the industry by encouraging the private sector to work closely with local universities in promoting and continuously improving training programmes; and

• establish a formal channel to facilitate communication between the professions and the Government and among different professions within the industry.

The success of the real estate services industry is attributable to the enterprise, flexibility and professionalism of its practitioners. While the Government will continue to facilitate the further development of this industry, it is for the private sector to take the lead in improving the quality of service and enhancing its competitiveness.

The private sector makes its vital contribution by :

• improving the quality of its service by providing adequate training opportunities for employees in the real estate services industry and working with the Government, the academic institutions and the Vocational Training Council to develop relevant training courses;

• establishing professional associations and developing voluntary codes of conduct for the various professions serving the industry; and

• capitalising on the wealth of experience and expertise acquired in the d omestic market to reap the full benefits of business opportunities offered by fast emerging markets in the region.

LONG TERM ISSUES

The real estate services industry is an essential element of Hong Kong's overall service industry and has made significant contribution to the remarkable economic performance of the past few decades. The private sector has not only excelled in providing efficient and high-quality services to local customers but has also seized opportunities offered by the sizeable markets in South-east Asia and China to expand its scope of service beyond Hong Kong. The vast potential of the real estate market in China remains the main challenge.

The Government will continue to explore new measures, in partnership with the private sector, to facilitate the further development of this industry. Only by doing so can Hong Kong maintain its position as a real estate services centre where local and overseas developers, landowners and investors can receive reliable and high-quality services in all aspects of the real estate business.

Secretary for Housing
Secretary for Planning, Environment and Lands

March 1996