Hong Kong developers battle to rein in building prices, and avoid red tape – South China Morning Post

Hong Kong is usually trumpeted as one of many world’s costliest cities in which to personal a house, caught as it's in the proper storm of restricted land, dense inhabitants, and sturdy demand.

However one other vital issue is usually ignored: the price of building right here.

This yr the typical worth of a flat has risen 14.2 per cent, a report excessive, in accordance to the Centa-Metropolis Main Index, a gauge of the secondary housing market.

“There are a lot of causes property in Hong Kong stays among the many costliest in the world. However bringing in trendy building strategies and modernising or re-designing the town’s approvals course of may scale back prices considerably,” mentioned John Webb, market director of constructed surroundings Asia at Aurecon, a worldwide engineering and infrastructure advisory agency.

Building prices in Singapore and Sydney are each constantly cheaper than Hong Kong, in accordance to the “Worldwide Building Survey 2017” produced by international undertaking supervisor, Turner and Townsend.

The price of truly building a excessive-rise flat is US$three,371 per sq. metre in Hong Kong, whereas Singapore is 46 per cent cheaper at simply US$,803 per sq metre, and 35 per cent decrease at US$2,169 per sq metre in Sydney.

Labour prices in Singapore are US$12 per hour, the identical as Hong Kong, and soar to US$48 per hour in Sydney, in accordance to the survey.

Whereas Hong Kong is paying not more than others, comparatively talking, for building supplies, “the unlucky actuality of its building trade is that members perceive and worry the issue of getting initiatives authorised by the authorities, throughout design and building”, provides Webb.

“There's a notion amongst some in the trade that the authorities have a tendency to interpret the codes and pointers too conservatively.”

For developers, the price of a 3-month delay in acquiring the fitting approvals can outweigh any financial savings made throughout building, even when utilizing “sensible” design strategies to lower materials use, he added.

“It's little marvel, then, that developers seem to place larger worth on reliability of procuring building approvals shortly than on sensible, economical design. In any case, their objective is to get the property to market as shortly as doable.”

In flip, some consultants reply by merely taking the trail of least resistance in their design, building heavy, over-strengthened constructions utilizing the out-dated strategies, which slavishly comply with the prescriptive pointers issued by the authorities, in some circumstances a few years in the past, he mentioned.

Webb names London, Singapore and Sydney as being among the many quickest nations to undertake trendy and revolutionary building strategies, all of which have left Hong Kong’s ranges of effectivity, pace and price financial savings properly behind.

It's little marvel, then, that developers seem to place larger worth on reliability of procuring building approvals shortly than on sensible, economical design. In any case, their objective is to get the property to market as shortly as doable

John Webb, market director of constructed surroundings Asia at Aurecon

“And it’s Hong Kong’s residents who're paying the excessive worth of not innovating,” mentioned Webb.

Progress is being made by some ahead-considering building companies in the town, nonetheless.

Hip Hing Building govt director Derek So, for instance, says his agency has collaborated with the Nano and Superior Supplies Institute (NAMI) to develop what’s referred to as “capsule expertise”, its use of the following technology of tremendous-sturdy light-weight concrete.

“A 500 sq. foot flat in a standard excessive-rise building requires 150 tonnes of standard concrete. With tremendous-sturdy light-weight concrete, the building weight will likely be 30 per cent lighter. Because of this, the estimated price for laying the foundations will likely be 20 per cent cheaper,” he mentioned.

On the similar time, the brand new technology of concrete can supply superior thermal and acoustic insulation properties, he mentioned.

The 56-year-previous Hip Hing – a unit of NWS Holdings, itself the service operation flagship of New World Growth – just lately constructed the posh residential undertaking The Morgan in Mid-Ranges, and the Kerry Lodge in Hung Hom.

“It should additionally assist property homeowners save with utility payments in future,” mentioned So.

Derrick Pang, chief govt director of Asia Allied Infrastructure Holdings – which developed the T-Plus residential growth in Tuen Mun, well-known for its a lot-publicised 128 sq ft flats – additionally mentioned his agency now centralises its materials sourcing, as a approach of saving prices.

The agency, previously often known as Chun Wo Property Growth, offered all the T-Plus growth to veteran property investor Tang Shing-bor for HK$.2 billion in July.

“Beforehand, we allowed sub-contractors to supply supplies on their very own as soon as we gained a building contract,” mentioned Pang.

“However [on closer inspection] we discovered we have been typically ordering an excessive amount of and our new system helps us management not solely the amount, but additionally the standard of the supplies we use.”

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Hong Kong developers battle to rein in building prices, and avoid red tape - South China Morning Post