Beyond limits

PUBLISHED : Saturday, 11 June, 2011, 12:00am
UPDATED : Saturday, 11 June, 2011, 12:00am


Executive councillor and chairman of the Housing Authority's subsidised housing committee Anthony Cheung Bing-leung said recently that the 'structural problem' of mainland people buying Hong Kong properties needs to be solved, and called for a resumption of the Home Ownership Scheme (HOS).

Cheung also proposed that the government use some of its land sales revenue to finance a housing development fund to help local buyers and called on the administration to revamp existing policies to tackle Hong Kong's sky-high property prices and housing problems.

He said a suggestion that the government should consider banning non-locals from buying mass-market homes, restricting them to the luxury market, could be discussed but the issue was complicated.

As head of the subsidised housing committee, it's totally appropriate for Cheung to come up with ideas to assist local homebuyers. But any plan to restrict mainland people from buying properties in Hong Kong, without thorough research, would be beyond the limits of good sense.

Such a measure would be nigh-on impossible to implement because it would involve a substantial change in policy. It would also give the impression that we are discriminating against mainland people, fostering an unhealthy 'them and us' attitude by driving a wedge between us.

Hong Kong's property prices have surged considerably since last year and overall prices have passed the 1997 peak. Buying a modest home is now beyond the means of most Hongkongers.

According to statistics, about 40 per cent of our luxury properties are snapped up by mainland buyers. Despite government measures to dampen prices, rein in unscrupulous property sales tactics, suppress speculation and increase land supply, the inflow of capital from the mainland and increasing demand keep pushing prices up. Housing problems could seriously affect people's livelihoods and destabilise our social foundations.

The government must act swiftly, but limiting mainland buyers is certainly not the way to go. Instead, we should strictly divide the market into private and public sectors. To help the people meet their housing needs, besides reconsidering the resumption of the HOS, the government has to build more sizeable public housing units for middle- and lower-income earners. Rents should be set at no more than 20 to 25 per cent of household incomes.

This would certainly provide the necessary breathing space for many people to enter a housing market that is within their reach.

Meanwhile, the private sector can be allowed to develop in a free market, driven by demand and supply. This would provide a win-win solution; everybody could afford a roof over their heads and the government wouldn't have to take on the impossible challenge of putting a lid on housing prices.

We can also take a leaf out of Singapore's book. Some 84 per cent of its population live in government-subsidised housing. That's one effective way to tackle the root of our problem.

Albert Cheng King-hon is a political commentator.