With a rising property market over the last 10 years in Hong
Kong, valuation surveyors have experienced relatively few claims.
Whether this will change depends upon the future state of the
economy, and the property market in particular.
At present, Hong Kong is one of the world's most expensive
cities in which to live. It also has the highest disparity between
the average house price and the average income, at nearly one-17th
of the home price. In 2012, the IMF was predicting an abrupt
correction and a bursting of the Hong Kong property
"bubble". Remarkably, however, the price of Hong Kong
property has continued to increase. Despite numerous cooling
measures introduced by the government, such as mortgage-tightening
and increased stamp duties, Hong Kong's residential property
prices have jumped 18.7% in the past year.
Nonetheless, with about 15,000 housing units available for sale
or rent in the market, some analysts are predicting a 5 – 10%
drop in new property prices by the end of this year, signifying an
end to the decade-long property boom. This "correction"
in itself is unlikely to trigger a swathe of claims, particularly
with the economy still predicted to grow.
Even if Hong Kong does see a sudden drop in property prices,
there are various other factors which should act to reduce the
prospects of claims against valuation surveyors in Hong Kong.
Firstly, the Hong Kong Monetary Authority has taken a pro-active
stance in capping the maximum value loan on a property. This, in
turn, reduces the prospect of the property suffering such a severe
drop that the lender suffers a loss and brings a claim. It is
unlikely that Hong Kong will see the raft of lender claims that
have plagued surveyors in the UK.
Secondly, deciding the potential market value of an apartment in
Hong Kong where numerous other identical properties have been sold
over the previous period is a far more certain (and less risky)
exercise than predicting the value of a one-off house, where
nothing comparable may have been sold in the area in recent
Thirdly, the Hong Kong Institute of Surveyors
("HKIS"), equivalent to the Royal Institution of
Chartered Surveyors in the UK, is seeking to ensure that Hong Kong
valuation surveyors continue to meet the required levels of
expertise. The HKIS published the Valuation Standards (latest
edition in 2012) to bring Hong Kong in line with international
standards. In addition, to supplement the Valuation Standards, the
Hong Kong Stock Exchange issued a formal Guidance Letter in
September 2013, and further refined it in January 2015, to provide
guidance on the preparation of property valuation reports and
market reports in relation to listing documents.
Whilst it could be said that new standards give rise to a higher
benchmark against which to judge competency, in our experience, the
"prevention is better than cure" approach adopted by the
HKIS should lead to a reduced number of claims.
We would consider therefore that the outlook for valuation
surveyors in Hong Kong is positive for now. The exposure areas are
likely to be in other activities carried out by the profession,
such as in the FM and Property Management areas.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The process for obtaining planning permission for development of property in the Cayman Islands has been updated as a result of the latest revision of the Development and Planning Law and accompanying regulations (July 2015).
In principle, when the parties agree to arbitrate, they shall be
bound by that agreement. It should therefore follow that when a
party initiates arbitration proceedings, the other party - the
respondent – will avail itself of the opportunity to present
its case and participate in the proceedings.
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