XN000022-1978-12-14 — Page 4

THURSDAY, DECEMBER 14, 1978

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THE PRACTICE OF MOST BANKS TO ALLOW MORTGAGE REPAYMENT

PERIODS TO BE PROLONGED AT TIMES OF RISING INTEREST RATES AND

THE ABSENCE (+THANK GOODNESS+) OF SHORT SELLING OF FLATS BY SPECULATORS IN HONG KONG,

+THESE FACTORS SUGGEST, MISS CHUNG SAID, THAT IF REAL INCOME IN HONG KONG IS NOT SUBSTANTIALLY CHANGED PRICES AND RENTS FOR SMALL FLATS IN GOOD LOCATIONS ARE LIKELY TO LEVEL OFF, WHILE THE SUPPLY OF AND DEMAND FOR LUXURY ACCOMMODATION ARE NOT LIKELY TO EASE FOR SOME TIME.

MISS CHUNG SAID THE 40,000 PUBLIC HOUSING FLATS TO BE COMPLETED IN 1979 WOULD CERTAINLY BE WELCOMED BY THE THOUSANDS OF ELIGIBLE FAMILIES DISPLACED BY DEVELOPMENT CLEARANCES, OR AFFECTED BY DISASTERS OR LIVING IN SQUATTER HUTS OR DILAPIDATED TENEMENTS.

THE GROWING ACCEPTABILITY OF ESTATES IN THE NEW TERRITORIES WOULD BE MORE MARKED IN 1979. + FORESEE THAT THE GROWING POOL OF LABOUR IN THE NEW TOWNS WILL ATTRACT MORE LARGE INDUSTRIAL FIRMS TO MOVE TO THE NEW TERRITORIES AND, IN TURN, THE SMALLER INDUSTRIAL FIRMS, WHICH SERVE THE LARGER ONES, WILL ALSO MOVE.+

MISS CHUNG SAID THE DESIGN OF HOUSING AUTHORITY FLATS WAS FLEXIBLE ENOUGH TO PERMIT A DEGREE OF INTERCHANGE SHOULD IT BE DESIRABLE TO ALTER THE PROPORTION OF FLATS FOR RENT AND FOR SALE, ADDING:

+PERSONALLY, I WOULD LIKE TO SEE AN INCREASE IN THE PROPORTION OF FLATS FOR SALE FOR MANY REASONS, INCLUDING ECONOMIC, SOCIAL AND POLITICAL.+

ON PRIVATE HOUSING, MISS CHUNG SAID THAT UNLESS PROJECTS NOW BEING PLANNED WERE DEFERRED THE SHORT TERM OUTLOOK FOR THE CONSTRUCTION INDUSTRY FOR 1979 WAS ONE OF HIGHER LABOUR AND MATERIAL COSTS AND OF HIGHER CONTRACT PRICES.

MISS CHUNG SAID THE PRACTICE OF SELLING PRIVATE FLATS WELL AHEAD OF THEIR COMPLETION DATES HAD BEEN AN IMPORTANT FACTOR IN THE FINANCING OF RESIDENTIAL DEVELOPMENT IN HONG KONG - BUT IT COULD LEAD TO A SITUATION WHEREBY A FLAT WAS BOUGHT AND SOLD FOR A QUICK PROFIT SEVERAL TIMES BEFORE IT WAS ACTUALLY OCCUPIED.

SHE SAID 1978 SAW POSITIVE ACTION BY MANY DEVELOPERS TO DAMPEN SPECULATION, USING A BALLOTTING PROCEDURE TO ALLOCATE FLATS AND CHARGING A FEE FOR THE TRANSFER OF BOOKING RECEIPTS OR PURCHASE AGREEMENTS FOR FLATS.

ALSO, INTEREST ON MORTGAGES HAD JUMPED FROM AN AVERAGE OF 0.83 PER CENT PER MONTH AT THE BEGINNING OF THE YEAR TO THE EXISTING AVERAGE OF 0.96 PER CENT PER MONTH.