Four Certified. 110,000 Still Waiting.
Four Out of 110,000
Four flats. The Buildings Department confirmed this week that four units have been certified under the scheme to regularise illegal residential structures, from a backlog of 110,000 units identified across the territory. The scheme was designed to give owners a path to legal standing. The path has been taken four times.
An owner in a subdivided flat in Sham Shui Po carries paper on a unit that does not formally register in the system. The flat is occupied. The rent is paid. Neither of those facts makes the unit mortgageable. Standard residential lending at BOCHK, Hang Seng, or Standard Chartered requires registered title; an unregistered structure does not qualify. The owner cannot borrow against it. A tenant living there cannot use an unregistered address for most government applications requiring a registered property.
Regularising an illegal flat puts the proof burden on the owner: hire a registered architect, commission a structural assessment, submit to the Buildings Department queue. The queue runs months. The architectural fee runs before the queue. The architectural fee alone runs HK$3,000 to HK$8,000 before the Buildings Department queue opens. Four is the result.
Rising, Off the Register
Secondary residential prices are forecast to rise 11% this year. Moody's confirmed the upswing holds. Grade-C resale flats in Kowloon and the New Territories are the tier ordinary buyers can reach. The 11% applies to owners who can list on Centaline -- who carry title deeds and have a bank prepared to lend.
An owner in Kwun Tong with an uncertified subdivided unit cannot list with Centaline or Midland. The bank says no. A cash buyer discounts for legal risk, or walks. The 11% projection covers assets with title deeds; the 110,000 uncertified units sit outside that projection, transacting informally, in cash, at whatever the two parties agree.
This week, fire victims won the right to resell their fire-damaged flats without penalty, relief that moved through the system and into the news in May. The regularisation scheme for 110,000 illegal structures has moved in the same period to certify four. The fire victims' relief cleared the Legislative Council in May. The regularisation scheme reached four units in the same month.
An owner in Sham Shui Po who filed in January — architect hired, structural assessment paid, forms submitted — is waiting for a Buildings Department site inspection scheduled for autumn. Secondary prices will have moved by then. The Centaline index updates weekly. The certified count does not. The Buildings Department's next published figure arrives in the quarterly report, due September.