Hong Kong must not withdraw measures to cool property market

PUBLISHED : Thursday, 18 July, 2013, 12:00am
UPDATED : Thursday, 18 July, 2013, 4:17am

When people are being put out of business because of a change in government policy, they have every right to speak up. The real estate agents are entitled to do the same as the anti-property speculation measures continue to hit them hard. Many who joined a mass protest earlier this month said they had not had a single transaction for months. Property prices, however, are not dropping much. Agents say they are struggling to survive; with some having already lost their jobs or switched to other industries. The feeling of being victimised is understandable.

Sympathy aside, the measures should not be withdrawn at this stage. They were introduced after property prices had risen 120 per cent since 2008 and 34 per cent from their peak in 1997. The first package in October imposed a 15 per cent stamp duty on home purchases by non-locals and companies. Four months later, the net was cast even wider, with the duty doubled for homes and other properties valued at more than HK$2 million. They may be harsh measures. But as the government stressed, they were deemed necessary to curb market exuberance.

A steady supply of affordable flats has been the goal of successive governments. When home prices go through the roof, action is called for. The measures have been generally well received by the public. They underline Chief Executive Leung Chun-ying's determination to cool the overheated market. As the saying goes, what goes up must come down. Estate agents have prospered from the boom times. As the market adjusted to the measures, a downturn in business was inevitable.

With interest rates still low and liquidity abundant, the government has rightly warned that the risk of a property bubble cannot be ignored. But that does not mean the measures should stay indefinitely. Officials should keep the situation under constant review and, hopefully, they can be lifted when appropriate.