Registrar-Generals-Department-Annual-report-1965-1966 — Page 10

that action was being taken to introduce new legislation which would facilitate the entry of developers into adjoining buildings in order to erect shoring under the provisions of the Buildings Ordinance 1955, and which would provide for Committees of Review to be set up to hear appeals against the exercise of the Building Authority's powers under the Buildings (Amendment) (No. 2) Ordinance 1964. The Working Party on Slum Clearance fully supported this action, which resulted in the enactment of the Buildings (Amendment) Ordinance 1965 on 27th August 1965. The reviews that followed the enactment of this Ordinance resulted in the commencement or resumption, subject to suitable measures being taken to protect nearby buildings, of the majority of building works that had previously been prohibited by the Building Authority.

10. The difficulties of real estate developers were not confined to the effects of the Buildings (Amendment) (No. 2) Ordinance 1964. The situation with respect to high-cost flats, the market for which had been saturated in 1963-64 and had become even worse in 1964-65, showed no improvement, and not only were sales very slow but the general level of rents continued to fall; and this despite the fact that of the 2,096 aliens who arrived in Hong Kong to take up residence during the year 1,219 were citizens of the United States or Europeans, who without doubt increase the demand for high-class accommodation. There were also thousands of empty flats in the lower price brackets, and instead of purchasers flocking as in former years to pay for flats prior to completion or even prior to commencement of construction, sellers found that they had to lower prices or offer attractive instalment terms to induce purchasers to buy.

11. Even before the banking crisis in February 1965 real estate operators had begun to experience difficulties in borrowing from banks. This was due to the passing of the new Banking Ordinance in October 1964, which required banks to maintain at all times a minimum holding of specified liquid assets, and placed limitations on the total of advances to one person, firm or company, and on the amount of land held by a bank otherwise than by way of mortgage. Naturally after the banking crisis, during which large sums were withdrawn from many of the banks which had been financing real estate developments, borrowing from banks for this purpose became extremely difficult, as noted in paragraph 8, except where banks were already committed to such loans. Government, however, recognizing the difficulties that the

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