Should foreigners be banned from buying property in Hong Kong as a way to cool the market?

PUBLISHED : Wednesday, 22 September, 2010, 12:00am
UPDATED : Wednesday, 22 September, 2010, 12:00am

Ronald Ling Pak-ki, 20, University of Hong Kong

The local property market is really getting out of control these days. Limited land supply and a huge demand for luxury flats have led to a drastic increase in property prices.

The market must be cooled down before the bubble bursts. Hong Kong had a painful experience when property prices crashed following the Asian financial crisis in 1998.

At the moment, the government is reluctant to increase the land supply. So, if it wants to improve the current situation, banning foreigners from buying property in Hong Kong is one way to do it.

It is believed that foreigners, especially mainlanders, have contributed to the high demand for flats. As they do not have right of abode, they buy property simply as an investment. They aim to make a profit by renting out the flats or selling them. This could have an adverse affect on the local property market. If this 'abnormal' demand was removed, the market would cool down considerably.

On the other hand, I admit such a ban could tarnish Hong Kong's image as an international city built on free-market principles.

However, the local property market could collapse unless action is taken immediately.

With that in mind, I think the government should consider banning foreigners from buying property in Hong Kong.

Elaine Yu Yee-nee, 15, Creative Secondary School

Hong Kong needs to attract highly skilled workers from all over the world to maintain its competitive edge. And preventing foreigners from buying property will certainly make the city less attractive to expatriates and harm its reputation.

Educated people help create wealth in Hong Kong. If foreigners cannot buy property here, would they still want to come? They could easily choose to go somewhere else, like Singapore or Malaysia. These places offer great incentives for highly qualified foreigners. Then Hong Kong would lose out to its biggest competitors.

In Hong Kong, land is scarce, and property tycoons play a dominant role in its economy. They have control over the prices of flats and when they should be sold.

In my opinion, the government should provide more land to the developers. Also, the authorities should make sure that the developers build residential complexes within two years. They should not be allowed to postpone projects so they can sell flats at a higher price.

Hong Kong strongly believes in the freedom of choice. And a free and strong property market is a great advantage for the city. Therefore, the government should not ban foreigners from buying property in Hong Kong. It would send a bad signal to outsiders, including skilled workers and potential investors.