TNAG-1857-FCO40-2632-Legislative-Council-of-Hong-Kong-memoranda-and-minutes-of-me-1989 — Page 75

HONG KONG LEGISLATIVE COUNCIL

香港立法局

12 July 1989

一九八九年七月十二日

23

The average controlled rents for Part II tenancies now stand at about 65% of the prevailing market rent. However, for about 55% of these tenancies, the controlled rent is below this overall average, and about 18% of them are less than 50% of the prevailing market rents. So to ensure that controlled rents do not fall behind this overall average, the Government proposes to increase the minimum percentage component from 60% to 65% of prevailing market rents. Assuming that market rents remain relatively stable, this will have a net effect of increasing by 883 the number of tenancies affected by the minimum percentage component and increasing the average controlled rent by $18 per month. On this basis, the rent increase mechanism would bring controlled rents to the decontrol level in 1992.

The third proposal in the resolution seeks to further extend the life of Part II of the Ordinance, from 19 December 1989 to 18 December 1991.

Part II of the Ordinance provides protection of rent control and security of tenure to about 60 000 post-war domestic tenancies, plus an undetermined number of sub-tenancies. As explained earlier, Part II is allowed to expire after 18 December 1989, the tenants concerned will face, on average, an immediate rent increase of more than 35% and in some cases, of more than 100%.

These rent controls will be reviewed again next year, taking account of the state of the property market and the social and economic consequences. Any further steps towards decontrol will be carefully considered in the light of the situation at that time.

Sir, I beg to move.

At this point, the following Members declare their interests:

Mrs. Selina CHOW as a director of a company which is a landlord.

Miss Maria TAM as a landlord.

Mrs. Rita FAN as a landlord.

Mr. Peter POON as a landlord and a director and a shareholder of a company which is a landlord.

Mr. CHENG Hon-kwan as a director of a company which is a landlord.

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