XN000022-1973-06-25 — Page 8

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Monday, June 25, 1973

Rent legislation in recent years, he explained, aimed at providing

security against eviction and protection against unreasonable increases in

rent, not in fixing rents. This formula had worked successfully before.

He said the government was aware that, in the long term, the provision

of more land was a very important factor. However, in the short term it

would have little or no effect on rents.

"The one thing that is going to bring down rents is the provision

"If rents come down so will land prices, the

of more housing," he stressed.

converso is not necessarily true."

Commenting on claims that the new controls might affect future

developments, Mr. Fry said this was not so as far as the government was

concerned,

"Provided a developer can see a fair return on his investment, the

fact that increased rents thereafter might be restricted is no real detorrent,"

he said.

He noted that the new legislation would provide for a three-year

control-free holiday for new property and during this time "it should be

possible for developers to establish rents at a stable level."

The Commissioner said it could be that controls would result in

less property being available for rental, as had happened in Britain, but

the trend in Hong Kong recently had been for developing companies to retain

premises for investment purposes rather than to sell.

In his view, this trend would continue if the rents obtainable

provided a fair return.

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