30/5/2018-2

URA involved in pushing up property prices

At the beginning of this month, the URA had acquired about 80 residential property rights for the redevelopment project at the Saigung-ri/Gorgeine Street in Western District at the unprecedented price of 23,568 yuan. The high selling price can be expected in the future. Public opinion criticized the URA for pushing up property prices.

Wei Zhicheng, executive director of the URA, yesterday wrote on the blog that the URA was passive. The price was determined according to policies and regulations. However, it was acknowledged that the current overall property market, whether the bureaucrats or private developers are faced with high purchase prices, is facing a high price. Even with construction expenses, interest, etc., it is an indisputable fact that the high price of “flour” will reflect the development cost in the future.

When the URA acquired the six reconstruction projects in Kowloon City last year, the owner-occupier unit purchased nearly RMB 16,000, and earlier this month, it also purchased Sungyeongli/Gorgeous Street in Western District with nearly RMB 24,000, and then broke the old building’s purchase price. Wei Zhicheng denies that pushing up property prices in the blogosphere indicates that the Western District project has only about 80 residential property rights. In the past year, there were more than 1,100 residential properties in Sheung Wan and Sai Ying Pun, and it was criticized that the Bureau’s promotion of property prices was a lack of reason.

Rising prices of old buildings in the same district continue to rise

He pointed out that under the “high rise”, especially the market value of the old building continues to rise under the heat of the property market. Take Sai Ying Pun as an example. The URA acquired 40 to 50 years old buildings in the first half of the year and the average transaction price was as high as 1.5. Ten thousand yuan; Under the high price of “flour”, it is also indisputable that organizations take into account the financial sustainability and the property market conditions, and reflect the development cost to future property prices.

Wei Zhicheng frankly expressed his concern about the URA’s continued “high buy”. If the market volatility in the future is to “sell low,” the financial risks and shocks that the URA should face cannot be ignored.

As for the “buy low and sell high”, the URA has also “nothing”. Wei said that in the early years, the bureau had indeed purchased projects at relatively low prices, and in recent years, they have completed sales at relatively high prices. These “buy low and sell high” projects seem to bring about considerable accumulated surpluses, but the bureau has to carry out urban renewal and improve living conditions. At the housing estate level, even if there is a large gain in sales, it is a temporary income that will be spent on urban regeneration spending in the future. Sometimes, income and expenditure cannot be offset.