Hong Kong MTR

Leave the property market alone

PUBLISHED : Thursday, 17 July, 2003, 12:00am
UPDATED : Thursday, 17 July, 2003, 12:00am


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I refer to the leader headlined 'Make housing policy consistent and coherent' (June 27).

You said that due to the lobbying of property developers, the government would now liaise with the two rail companies, the MTRC and KCRC, to restrict their supply of property to the market by holding back their property development projects.

More worrying is that the developers are advocating that the two rail companies should not be in the property business at all. The government should think twice before accepting such a proposal.

Without the help of income from property development, we can look forward to fare increases from the two railway companies, or alternately, even larger government deficits.

In the case of the MTRC, the policy change will also affect its shareholders. People bought MTRC shares in good faith for its income prospects. If policies change overnight to suit 'circumstances', will investors have the confidence to buy future government assets?

In the mainland, commercial rules and regulations can be changed overnight as an expedient, often to the detriment of foreign investors. Are we trying to acquire this kind of poor reputation too?

The reason Hong Kong people are not buying properties, even at the now reasonable prices, is that they do not feel secure in their jobs. The reason jobs are not secure is that businesses are having a hard time making ends meet because Hong Kong is not competitive.

The government needs to make restoring competitiveness its top priority in efforts to revive the economy. It needs to see what it can do to bring down high public transport charges, high utility charges (within the rules of the scheme of controls with the companies) and high port charges and find ways to dismantle other cartels which operate in this so-called free economy.

When we are competitive, business will flourish and unemployment will fall. When people have a steady income and feel their jobs are secure, they will want to buy their own homes and property prices will rise. The reverse thinking - that artificially jacking up property prices will help our economy - not only will not work, it will lead us into deeper economic trouble.

ALEX WOO, Tsim Sha Tsui