Subdivided-flat registration rate at 42.5% as ‘early bird’ phase deadline passes

Property registration of subdivided flats in Hong Kong has lagged behind expectations due to property ownership complexities and limited public awareness, according to industry experts. On Monday, the Hong Kong government only received 42.5% of the applications anticipated in the inaugural six-month "early bird" registration phase of the Basic Housing Unit Ordinance.

Landlords who registered during this time were granted a waiver of HK$3,000 (US$382) in certification fees per subdivided flat for each of the first three years. The regulation, enacted in March, aims to eliminate substandard subdivided flats. The government anticipates that roughly 80,000 such flats could be accredited, yet only around 34,000 were registered in the initial half-year.

Scott Leung, a deputy chairman of the Legislative Council's housing panel, deemed the 42.5% application rate as reasonable, yet believed the HK$3,000 discount was insufficient motivation for landlords to expedite their applications. Leung cited cases where inherited properties with pre-existing subdivisions faced challenges in verification of legal ownership, leading to delayed registration.

A second six-month registration period, offering reduced fee discounts, is currently underway, with the one-year application period set to conclude. Landlords have been granted a three-year grace period to renovate and rectify substandard units to meet government standards. Rents for renovated units may increase, potentially rising from around HK$5,000 to HK$7,000, as landlords seek to recover their expenses.

However, Leung expressed confidence that rents would eventually decline as more public housing and basic housing units become available. Jerry Ho, vice-chairman of the Hong Kong Basic Housing Units Operators Association, suggested organizing more briefings on basic housing units across various districts to increase awareness, as some owners might not be aware of the new regime.

Ho highlighted the need for talks in areas like Sham Shui Po, Mong Kok, and Yau Ma Tei, as residents in these communities might be less inclined to travel to Tsuen Wan for such sessions. Fellow lawmaker Vincent Cheng proposed sharing sessions involving landlords who have already submitted applications, in order to provide reassurance to those who have yet to do so.

He recommended authorities continue providing show flats, offering renovation guidance and budget estimates for converting existing subdivided flats into compliant units.