Sound and fury on show against property tycoons

PUBLISHED : Saturday, 24 July, 2010, 12:00am
UPDATED : Saturday, 24 July, 2010, 12:00am

Public anger over the behaviour of property tycoons is reaching new levels. This must be so because even the government has noticed, and in the past couple of weeks has made a number of gestures that suggest a determination to act. But, as ever, when it comes to dealing with powerful vested interests, the government shows a marked reluctance to stand up for the public.

A high-profile police raid on the offices of Henderson Land, accused of furnishing false information about prices, will probably result in more or less nothing happening. Meanwhile, a more recent issuing of non-statutory guidelines on increasing the transparency of property pre-sales is being welcomed by the Real Estate Developers Association - because it recognises impotence when it sees it. Even some seemingly tough talk by the chief executive is treated with equanimity by property tycoons, who know just how cheap talk can be.

They also know that their position is secure and little will be done to disturb them. Government land policy, inherited from the colonial regime, lies at the heart of the current situation, which has allowed a few property developers to dominate the real estate business and behave in ways that would not be tolerated elsewhere.

The notorious land sale system of auctions and grants makes it all but impossible for anyone outside the small, property tycoon clique to get hold of land for development, aside from some minor sites in remote locations. As there is no other source of land supply, the system is hermetically sealed. Even were the system to be changed today, it would have little impact on the dominance of the clique.

However, there are things that could be done to protect consumers' interests. Proper information should be made available about the true usable area of properties offered for sale; the Land Registry could be placed online with free access; tough measures could be taken against those issuing misleading price information; and so on.

There is no mystery about what needs to be done, but considerable doubt over the will to do it. And it really is no good saying that this is the traditional Hong Kong way of doing things - which, were it to change, would threaten the stability of the property market and thus of the economy. This kind of argument wilfully ignores the fact that public expectations of transparency and regulation are much higher than they once were. The people making this case have the mindset of those who denied women the vote on grounds that they would be much happier without the burden of this onerous responsibility.

Yet, the views of the property tycoons have been successfully superimposed on members of Hong Kong's property-owning class, who fear a diminution in the value of their properties - which, for many, are the biggest asset they hold. Naturally they want prices to remain high and are not too bothered how this is achieved. Their concerns are real and cannot be brushed aside.

But neither can the concerns of those hoping to jump on the property ladder, nor those of owners of older properties who have reason to fear new government rules that reduce the threshold for forced sales to property developers. And what about the people poised to buy a property but denied accurate information about their potential purchase?

Layered on top of this is the responsibility of the media which, far too often, is ready to repeat claims and views of the property tycoons without investigating them. For example, why was there no immediate questioning of Henderson Lands' claim to have sold the world's most expensive apartment in what can only be described as a fairly nondescript apartment block? Surely that was worth a modicum of further investigation at the time, not later, after the alleged sale had fallen through.

So it's not just the government that needs to do more to protect members of the public from property developers. Yes, it's not simple, but that is no excuse for dressing up a series of largely ineffective measures as real action.

We will know when and if the government really intends to get serious. That will be when it ceases to appoint property tycoons (or their sons) to every important body in Hong Kong and when it ceases showering them with official honours.

Heaven forbid, the day may even come when officials are prepared to communicate with other members of the public with the same sense of urgency and deference they show towards tycoons.

This is an issue that will not go away. It's put-up or shut-up time. Taking on Hong Kong's most powerful people is a daunting task but the price of not doing so is also high. Maybe the slogan 'Act Now' would be appropriate.

Stephen Vines is a Hong Kong-based journalist and entrepreneur