Hong Kong rental limits 'ineffective’

Press, 15 July 1980, Page 21

Hong Kong rental limits 'ineffective’

NZPA correspondent - Hong Kong

Rent controls imposed by the Hong Kong administration on one of the world’s most free-booting societies are showing up as little more than an unsuccessful public relations exercise.

Reflecting carefully honed money-making skills. property owners have found sufficient loopholes in the six-month-old control legislation to make it virtually ineffective as a tool to damp down soaring house and apartment rents in the colony.

Under the controls, increases in rents were to be limited to 20 per cent of the former rental and freshly signed leases to cover a two-year period. Landlords were permitted to reclaim their properties if they needed the premises to become their home or if the property was required to become a residence for a member of their familv.

Tenants who believed the Government intended the law to give them relief from extremely high rent increases received a rude shock.

Landlords promptly found sons, daughters and relatives who needed to occupy apartments when leases expired. Relatives moved in when tenants moved out and a short while later landlords relet premises for rents well in excess of the amounts seemingly permitted by law.

The legislation does not apply to the levels of rent charged when new tenants move in.

Against a background of rising property values and rents, which during the last five years have turned hundreds of Chinese middle-income families into asset millionaires, tenant bitterness is rising. Apartments rented three year ago for SNZ7SO a month now rent for more than SNZ2SOO a month. Owners of 1100 sq ft apartments with a full

view of the colony’s spectacular harbour seek, and get. in excess of 5-NZ3UUO a month rent. Similar three-bedroom apartments of about 2000 sq ft are regularly let for more than SNZ3SOO a month.

Letters to English language newspapers have emphasised tenants’ problems. One letter quoted a landlord as saying be needed a house for his family. After the tenant left the landlord moved in a servant and began looking for a new tenant to pay a rent three times that previously paid.

Another ’tetter writer declared it was now very easy for landlords to evict tenants. “All they have to do is show reasonable cause,’’ he said.

“The tenants have to take tiie landlord to court and this can cost them S 1 0 0.0 0 0 (about •5NZ23.000) or more. What tenant can afford this? The rich and greedy in Hong Kong win every time.’’