Maintaining prosperity is more important than closing income gap

PUBLISHED : Sunday, 18 April, 2010, 12:00am
UPDATED : Sunday, 18 April, 2010, 12:00am

February's budget was more positive than some economists had predicted. The only significant measure with regard to the property sector was a stamp duty rise from 3.75 per cent to 4.25 per cent for properties valued at more than HK$20 million.

This doesn't make any sense if it leads to more pressure being put on the property market. The bottom line is that the budget surplus this financial year of HK$13.8 billion is partly due to the government's land-sales policy. It made income by selling lots of land to developers.

Ensuring economic recovery and prosperity should be the priority above the need to tackle the gap between rich and poor. If the economy is growing thanks to a booming property market, then everyone gains.

We should not forget what happened when Tung Chee-hwa interfered in the property market during his period as chief executive.

The government had pledged to have 85,000 new flats built every year and there were fears that this would result in a collapse of the property market.

We learned a painful lesson and no lawmakers want to see a repeat of these mistakes. We cannot afford to have the property market collapsing.

Land prices here will always be high.

Land and apartment prices may hit a historic high, but there is nothing wrong with that.

This will demonstrate the fact that developers are very optimistic and confident about the state of Hong Kong's property market.

As regards interest rates, US Federal Reserve chairman Ben Bernanke has said they will remain low for an extended period.

This means interest rates in Hong Kong will stay low and this will help end-users in terms of paying mortgages.

In addition to the property market, the SAR also relies on cash flows from overseas to enable it to enjoy economic growth.

Investors from different places, such as the mainland, Singapore, Korea and the West, seem to very comfortable about putting their money into Hong Kong. They are happy to live and work here. This can also help the property sector.

Jack Lam Ting-kin, Mid-Levels