[1][2] Excluding rural settlement housing, which represents 7% of the city's total domestic households, the remainder of the population is effectively squeezed into an area of 42 km2 (16 sq mi).
[5] Similarly, in residential sales, project metrics are equally predictable because the small circle of architects and banks means secrets are difficult to keep for long.
[1] Developers' returns have been reinvested into other business sectors such as utilities, which had the benefit of being stable and highly cash-generative, and often had significant real estate of their own.
[32][31] According to an analysis by the South China Morning Post, 12 major property conglomerates directly speak for at least 64 seats on the 1,200-member committee that selects the Chief executive.
[35] An editorial in Ming Pao said: "Though developers have used controversial marketing gimmicks, the government has rarely exercised its powers to protect consumers.
"[36] In addition to various misleading and opaque sales practices, the widening wealth gap and housing prices beyond the reach of everyday residents have become core livelihood issues.
[32] According to an opinion poll published in August 2011 by the Chinese University of Hong Kong, two-thirds of those interviewed thought developers cared only about making money and nothing about social responsibility.
Although Chief Secretary Henry Tang claimed in May 2011 that there was no such thing as "property hegemony" – the alleged dominance of developers over local politics and the economy — 78 percent of those polled agreed it existed in Hong Kong.
"[10] During the final years his administration, Tsang became the focus of controversy over pecuniary benefits he allegedly received from property tycoons, such as a trip to Phuket on a private jet allegedly owned by Cheung Chung-kiu, a billionaire businessman from Chongqing; transport to Hong Kong from Macau aboard a $19 million yacht owned by Thomas Lau.
[10] Rafael Hui, Chief Secretary appointed by Tsang, also came under investigation by the ICAC, and was convicted in late 2014 along with several principals in the property industry in a landmark corruption case.
A commentary in People's Daily urged: "For the sake of public interest … it is time developers show their utmost sincerity instead of minding their own business, hoarding land for profit and earning the last penny".
He further states that the policy, backed by loose money from the banking sector, has caused the economy to restructure around the government-mandated land price.
Hang Lung Properties, having completed The Long Beach estate in Tai Kok Tsui in 2005, still had unsold units on hand 2018;[48] similarly, in The Cullinan, a high-end development in West Kowloon which was introduced in 2007, the developer was still holding 60 of the most luxurious units in the project's two towers more than a decade later, for revenue maximisation in a perpetually rising market.
Pointing to data that the number of unsold units in completed projects had been on the rise, the government introduced measures to stop developers from hoarding flats.
[46] Hong Kong property buyers thus commonly accept that the usable space of a residential unit is only 65–70 percent of its gross floor area - this is known as the Efficiency Ratio.
[51] In the absence of strict rules for building authorities to regulate the designs of show flats, developers have been accused of misleading buyers by creating deceptive units to market their products.
According to The Standard, developers use glass walls, deliberately undersized furniture, missing doors, and ceilings that are higher than specifications to falsely create the impression of spaciousness.
[56] The Consumer Council recognised the accepted common practice of skipping the 13th and 14th floors, but suggested that developers' "imaginary heights [be] brought back to earth.
"[57] New World Development was involved in controversy when allegedly sold 39 flats at The Masterpiece in Tsim Sha Tsui to business associates before the public sale in August 2010 to create an illusion of keen interest.
In 2004, while Leung was Director of Housing, the government had sold Hung Hom Peninsula, an unused Private Sector Participation Scheme project,[59] at less than half of the original asking price.
[60] There was widespread suspicion among members of the public that job offer was a quid pro quo for the favours he allegedly granted to its parent company, New World Development (NWD), in 2004.
The government announced in October 2010 that it would set up a 14-member committee to consider direct legislation to regulate property transactions in the primary market, and to make recommendations within a year.
[65] In March 2012, following a two-month public consultation during which a clear consensus emerged for legislation as soon as possible to deal with deceptive sales practices,[66][67] the government tabled the Residential Properties (First-hand Sales) Bill that includes a raft of measures aimed at increasing transparency of property transactions, covering show flats, promotional brochures, how flat sizes are defined, and the required timing of the release of data about prices and transactions.
[55] REDA objected the legislation on the grounds that "contravened the protection of the right of private ownership and disposal of property stipulated in the Basic Law.
"[50] In op-ed in the South China Morning Post, Alex Lo welcomed the measures and criticised the REDA's arrogance, saying "People who enjoy too much power and privilege rarely know when to stop.