Enough, enough and more enough – the time has come to call an end to all this nonsense surrounding Hong Kong’s property market and the government’s alleged attempts to cool prices.
Yet another initiative is about to be launched which imposes what is in effect a fine on developers for hoarding completed residential properties in anticipation of higher prices. There will, of course, be loopholes in this scheme because there always are.
Yet again it is being claimed that this will have a significant impact on property supply and thus prices.
Meanwhile the government’s largely cosmetic land supply task force buzzes around allegedly looking at new sources of land supply; it too is doomed to failure.
Then there are higher stamp duties for non-permanent residents buying property here.
What has all this achieved? The answer is zilch: prices keep rising and affordability keeps shrinking. In addition, the quality of housing for most Hong Kong people is abysmal in terms of size, quality and surrounding environment.
Little wonder then that when people are asked to identify their most pressing concern, housing repeatedly comes top of the list. And when people are asked why they have left Hong Kong or are intending to do so, housing again figures among the most pressing reasons.
Everybody understands the depth of the problem and everybody with half a brain has been underwhelmed by the government’s response. But no one in authority is prepared to cut the crap and get serious about providing decent housing for Hong Kong people.
The reason is that the bureaucrats and their puppet masters are determined to equate the property market with the housing market.
That seems to be logical but it is not when viewed in terms of public policy. Let me explain: Hong Kong’s property market is essentially controlled by a small cabal of big companies – all of which used to do other things but discovered that the property development business was infinitely more profitable than anything else.
Thus the bulk of Hong Kong’s economy has ended up revolving around the property market.
To protect the interests of property developers the government, the only supplier of land for development, pursued a policy of land sales that more or less ensured that the bulk of property development remained in the hands of this small cabal.
Having created over-dependence on the property market the government is extremely nervous of making life difficult for the cabal, fearing the impact this would have on the economy as a whole.
Meanwhile on the sidelines is a rather different situation in the New Territories where, again as a result of government policy, a stranglehold on a significant proportion of land supply and accommodation has been placed in the hands of the reptilian Heung Yee Kuk, which masquerades as the authentic voice of the rural community but is in reality yet another cabal with considerable political savvy and a fine nose for profit.
The government dares not challenge the Kuk and so there is no foreseeable prospect of an end to the system that gives its (male) members free plots of land plus a raft of other privileges that help distort the property market.
This leaves the government playing public consultation games, fiddling around with the taxation system and issuing impressive-sounding statements of concern, but as far as the property market is concerned its scope for real action is considerably proscribed.
What the government can however do is address the housing problem by the simple expedient of, for the foreseeable future, placing the bulk of new land supply at the disposal of public housing. The costs of development could, at least in part, be financed by an accelerated home ownership scheme, a hugely popular scheme that gives ordinary people their only chance to clamber aboard the property ownership ladder.
Moreover the government should start to seriously address questions of quality – there is no inherent need for new public housing estates to be ugly, cramped and basic. Creative planning does not necessarily add to expense but it does challenge the dull minds of the bureaucrats who get the jitters when they hear the word creative.
Some of them come to this matter with a very unhealthy attitude that sees public housing tenants as supplicants, who deserve nothing more than basic accommodation.
They continue to view public housing through the mindset of some of its original proponents, who were under pressure from employers to keep wages down and realized that the best way of helping out was to introduce publicly subsidized affordable housing.
Hong Kong has changed a great deal since those days and the rich have become richer and the poor poorer in relative terms. The most striking manifestation of this is the squalor of most of the housing stock compared with the (often tasteless) opulence of the palaces housing the rich.
A concerted effort to boost public housing supply would affect prices in the market as a whole. Indeed if more land was made available for public development at the expense of private development, prices in the private sector might well rise further.
However the essential purpose of a determined expansion of the public housing stock is to achieve social ends. As matters stand the focus of government policy is on the property market, and housing considerations take second place. Reform is possible but the will to initiate reform is questionable.
