WEDNESDAY, JULY 8, 1981
DR HO KAM-FAI SUPPORTED THE BILL ON THE CONDITION THAT NEW DOMESTIC PREMISES SHOULD ALSO BE BROUGHT UNDER RENT CONTROL AFTER THE IR FRESH OR FIRST LETTINGS.
HE SAID: +GIVEN THE FACT THAT SUPPLY PERPETUALLY LAGS BEHIND DEMAND, REMOVAL OF RENT CONTROL FOR NEW PREMISES WILL ENHANCE THE SPECULATIVE APPEAL OF THESE PROPERTIES.
+ IT IS THEREFORE NOT UNREASONABLE TO EXPECT SPECULATIVE ACTIVITIES TO BECOME INTENSIFIED.
BUT HE SAID THE GOVERNMENT DID NOT MAKE ANY ATTEMPT TO CURB SPECULATION IN THIS REVIEW EXERCISE AND, AS A RESULT, THE END-USERS OF DOMESTIC ACCOMMODATION WILL BE VICTIMISED.
HE SUGGESTED THAT THE GOVERNMENT SHOULD SERIOUSLY RE-CONSIDER APPLYING THE BIENNIAL 30 PER CENT RENT INCREASE CEILING TO NEWLY-BUILT PREMISES AFTER FRESH OR FIRST LETTINGS.
WHILE NOTING THE ARGUMENTS FOR THE EXEMPTION ARE TO ENCOURAGE DEVELOPERS TO PRODUCE MORE FLATS FOR THE RENTAL MARKET AND TO INDUCE OWNERS OF NEW PREMISES TO LET THEIR FLATS OUT, DR HO DOUBTED WHETHER THIS EXEMPTION PROVISION WILL SUBSEQUENTLY BRING ABOUT A STABILISING EFFECT ON THE PRESENT RENTAL LEVELS.
+ IN A FREE MARKET, THE PRICE OF A COMMODITY IS TO A GREAT EXTENT DETERMINED BY THE FORCES OF SUPPLY AND DEMAND.
+STATISTICS IN THE REPORT OF THE COMMITTEE OF REVIEW SHOWED A SHORTFALL IN HOUSING OF ABOUT 204 000 FLATS IN 1980. THIS SHORTFALL WILL STILL REMAIN AT A HIGH LEVEL OF 137 000 IN 1985.
+GIVEN HOUSING SHORTAGE OF THIS MAGNITUDE, IT IS VERY UNLIKELY THAT RENTS FOR DOMESTIC ACCOMMODATION CAN BE STABILISED IN THE NEAR FUTURE DESPITE AN IMPROVED SUPPLY THAT MAY RESULT FROM THIS DECONTROL MEASURE, HE SAID.
DR HO ALSO FELT THAT DECONTROL OF NEW PREMISES WILL CREATE TWO DIFFERENT CATEGORIES OF PRIVATE RENTED ACCOMMODATION UNNECESSARILY.
HE POINTED OUT THAT WHILE SITTING TENANTS CONTINUE TO ENJOY PROTECTION AND SECURITY OF TENURE, TENANTS IN THESE EXEMPTED PREMISES WILL SIMPLY LIVE AT THE MERCY OF THEIR LANDLORDS.
+ IN THE END, A PROPORTION OF THE TENANTS IN THESE UNPROTECTED PREMISES WILL FIND THEMSELVES UNABLE TO AFFORD THE RENTS DEMANDED AND MAY BE FORCED TO SQUAT.
+THEY WILL EXACERBATE THE SITUATION OF PUBLIC HOUSING AND WILL PUT UNDUE PRESSURE ON THE GOVERNMENT TO ACCELERATE ITS BUILDING PROGRAMMES BEYOND ITS CAPACITY, HE SAID.
THE HON ALLEN LEE SAID HE COULD NOT SUPPORT THE PROPOSED RENT INCREASE FROM 21 TO 30 PER CENT BIENNALLY BECAUSE IT CONCERNS THE INTEREST OF THE GENERAL PUBLIC+.
HE SAID