Although the overall direction of pricing future Sandwich-class Housing will be dependent on private property prices, details will only be determined in subsequent Executive Regulations.
This information was disclosed by lawmaker Vong Hin Fai, president of the parliament’s Third Standing Committee, which met with competent government officials yesterday morning on the Sandwich-class Housing Bill.
In previous meetings, the Committee was repeatedly assured that the future housing will be of a private property nature. This means the property can be resold privately after the blackout period of 16 years provided the government does not opt to exercise its priority privilege.
However, the housing cannot be called completely private as the government will initiate the investment. It will also initiate the maintenance fund for major projects by putting 2% of the total construction costs and the land premium as a first investment, making it a pseudo-private type of property.
The pricing of the future type of housing will be determined as against private realty in the neighborhood. That is, prices of private properties will be taken as reference points and a certain portion of deduction will be imposed, which will consequently produce the price of the Sandwich-class Housing.
When future owners want to trade their properties on the market after the blackout period, they will need to pay the deducted portion.
The portion of deduction will be determined by the Chief Executive in the form of Executive Dispatch. The scope of reference areas will also be determined by future Executive Regulations or Dispatch.
Vong was asked if any comments were made on the determination of the scope of reference areas, for the fact that Macau is a small place and a slight geographic difference can result in enormous difference in property prices. He admitted that similar concerns were raised at yesterday’s meeting too.
In addition, the scope of use and the mode of trigger of the fund will also be determined by the future Chief Executives.
Vong emphasized that the latter topic will be supervised by a “rigid” procedure. For example, he said, when money needs to be withdrawn from the fund for repairment projects, relevant laws will be abided with and the approval from competent government supervisory departments – whose authorities will be determined by the Chief Executive – must be obtained.
What is unclear is whether this fund can be used for projects not related to residential sections of the housing estate, according to Vong. He pointed out that within a housing estate, there will surely be commercial spaces, parking lots and other public facilities.
Negotiations on this topic will continue between the parliament’s legal team and the government’s, Vong concluded.
Some Committee members wondered why prices will not be evaluated against the cost.
Furthermore, certain Committee members also expressed concerns over the timing of price evaluation, which is not mentioned in the Bill.
For example, Vong said, fluctuations in property prices are not uncommon but in fact ordinary. “Over a period of years, prices of private property in a district can rise to a new peak or drop to a new trough,” Vong said, to prove that the timing of evaluation will be very important to reflect fairness.
Consequently, the Committee reminded the government to either include the point of time for price evaluation in the Bill, or to promise to make Executive Regulations in the future to determine the timing.
Vong disclosed that the government reiterated in yesterday’s meeting the “private” nature of the future type of housing. This explained why the government wants to evaluate prices against nearby private properties, Vong cited government officials as saying.
Vong did not say if the government had made any comments on the time of price evaluation, but disclosed that there was some disagreement among Committee members on the mode of price evaluation, with some demanding the Economic Housing mode and others the currently proposed mode.
The current Bill has no proposal on the standards which the Chief Executive should follow to make the aforementioned determinations.
The Bill proposed that during the application period, if the lead applicant withdraws from the household due to death or divorce, the application will be voided. Nonetheless, if there is another person in the household who is eligible for a Sandwich-class Housing application, the application will be considered active. However, the replacement applicant must be within the household when the application is first made.
The Committee also discovered some discrepancies between proposals in this Bill and provisions in the Economic Housing Law. Article 25 of this Bill proposes that after signing the contract of intent, if the interested buyer withdraw from the transaction, they will not be punished or fined. This proposal is different from the latter law, which requires the drop-out buyer to pay 1% of the price of the concerned unit as a service charge or fine.
Considering this prospective financial burden on the government, the Committee raised this to the government, which said it would consider the topic. Vong emphasized that this is to protect the government’s interests.
The Committee concluded studying Articles 21 to 27 of the 54-article Bill yesterday morning. Vong said the Committee would strive to finish reviewing the entire Bill in the next meeting.
