Bad idea to survey mainlanders on why they buy Hong Kong property
"Times have changed. We cannot ignore their [mainland buyers] demand and have to consider how to accommodate their needs - provided they are genuine needs. We have to do a survey to find out how many of them buy a home for self-use, how many for long-term investment and for speculation."
Marco Wu Moon-hoi
Long-Term Housing Strategy Steering Committee
SCMP, September 24
I like that bit about genuine needs. The only mainland property buyers whose genuine needs could possibly concern us, Mr Wu, are those who have moved here and are looking to buy their homes, in which case we call them Hong Kong residents.
This is only a small minority of them. Most have come here because they want to invest their money in a place that is reasonably safe and, in many cases, to hide their money from the authorities in Beijing.
But whether or not they have nobler objectives than just looking to make a turn on their money, we are under no obligation to accommodate them. Let the national government deal with their genuine needs. These people are no more our responsibility than if they lived in southern Chile.
In fact we have already gone out of our way needlessly to accommodate them. The misconceived Capital Entrant Migrant Scheme, which has done nothing for us but put unnecessary strain on our economy, was changed in October 2010 to exclude property from the list of qualifying investments.
They still allowed everyone on the application list at the time to put their money in property, however. The result, as the chart shows, is that instead of slowing down, property investment through the scheme accelerated and more than doubled to HK$41.5 billion.
It's a great traffic cop we have here. With one hand he signals a line of mainland traffic to stop and with the other hand he beckons it on. Real joined up government we have.
But where I think Mr Wu crucially shows that he is entirely at sea in these matters is in assuming that he can conduct an accurate survey of investment intentions.
Put yourself in the position of a survey respondent who has just been bothered for the fourth time with a nuisance call on his mobile phone. His inclination is to sandwich the message "Get Lost" between expletives and then thumb the red button.
Even assuming the survey is face to face, the first thing any mainland buyer will ask himself is why he should tell the truth when he already knows from every media outlet in town that the objective of this survey is to provide reasons for excluding mainland buyers.
This assumes that he has thought his objectives through in the detail that the survey takes for granted. He hasn't. His objective is to make money.
Thus if you ask him whether he is in it for the long term or for speculation he will tell you that it all depends on the property market and on what else he thinks he can do with his money at the time. It is the most truthful answer you are likely to get. It is also the best one for anyone's investment purposes.
If he thinks about it he may ask you what distinguishes a long-term investment from speculation if the objective in both cases is to sell at a profit. Three months? Six years? What's the answer, Mr Wu?
The answer, of course, is that Mr Wu's Long-Term Housing Strategy Steering Committee is as short on insight as it is long on name.