No closer to owning a property in Hong Kong

Michael Chugani says the new cooling measures won't do anything to help those Hongkongers who can't afford to buy a home now

PUBLISHED : Monday, 05 November, 2012, 12:00am
UPDATED : Tuesday, 22 September, 2015, 4:52pm

So, you think the government's latest cooling measures will finally make prices affordable enough for you to become a homeowner. Forget it. If you can't afford a flat now, the new measures won't change that. Prices will probably fall some way, but don't hold your breath for a free fall. Yet we all know that only a free fall from the current lunatic level will put homes within reach of those who can't afford one now.

Chief Executive Leung Chun-ying has no intention of engineering a market collapse. Homeowners would go after his scalp if he did that. Besides, a collapse would rob Hong Kong people of one of only two paths to wealth - owning a flat and speculating in stocks.

That's why Leung talks in riddles. He wants to make homes affordable without forcing down prices. How you can square the two I don't know. One way homes are affordable in an overpriced market is if everyone wins the Mark 6 or is bequeathed a fortune by a rich relative.

Even then you must be realistic. A HK$3 million fortune is peanuts unless you settle for something in the remotest parts of the New Territories. But there aren't many of those left. Make it HK$6 million if you want something closer to town. But don't expect anything more than a shoebox.

Forget about a spacious new flat in a good area unless you win big in the Mark 6. You could wait for another killer epidemic like severe acute respiratory syndrome, a shooting war between China and Japan over the Diaoyus, or a property bubble burst. The result would almost certainly be a market collapse. But then, you could be out of a job. No bank would touch you for a mortgage.

I can't afford a flat, I don't have a rich relative, and years of buying the Mark 6 has lost me a fortune rather than gained me one. I returned to Hong Kong from the US just when Sars hit. Prices were in a free fall. I didn't dare buy. What an idiot I was. I have been at the mercy of our merciless landlords ever since.

Our former chief executive, Donald Tsang Yam-kuen, once advised aspiring homeowners to settle for remote areas like Tin Shui Wai. He was mocked for saying that but his message told a home truth: after years of climbing the upward mobility ladder to what passes for middle class here, people like me can only hope for a shoebox in the "city of sorrow".

But even Tin Shui Wai is escaping my reach. Nowhere is immune to the lunacy of our property market.

It has to be lunacy when prices surge more than 50 per cent in four years. They've already gone up nearly 20 per cent so far this year. Tell me that's not insane.

Analysts say the new measures will probably push prices down about 10 per cent in the short term. If you couldn't afford a flat at the start of the year and prices have gone up over 20 per cent since then but will now go down 10 per cent, can you afford a flat without that Mark 6 win or a rich relative?

Do the maths. I don't think you'll need a calculator. As for me, my landlord tells me my rent will go up in a few months when my lease expires. Any suggestions, C.Y.?

Michael Chugani is a columnist and TV show host.