Hong Kong needs more home owners

PUBLISHED : Thursday, 03 January, 2013, 12:00am
UPDATED : Thursday, 03 January, 2013, 5:27am

Many people in Hong Kong are not optimistic about the future. They are unhappy with the government and the unaffordable home prices.

This discontent is not surprising as the lives of many seem to revolve around owning or buying property as a means of wealth creation, and to give them a sense of achievement.

Many young Hongkongers find that if their parents cannot help them with a down payment on a flat, they must put off getting married and having children. It is no wonder we have an ageing population.

Wealth inequality is getting worse; those with property are set apart from those without.

By limiting land supply, the government inflates land prices and increases its revenue. This form of wealth creation can backfire and officials will always try to ensure property owners and banks are not affected by negative equity brought about by a huge price correction. Vested interests ensure property prices remain high.

Landlords increase rents, businesses suffer and the cost of living and other prices rise disproportionately, as salaries cannot keep pace with inflation.

One way to solve these problems is to make Hong Kong a home-ownership society. This can be achieved by ensuring that hard-working citizens can afford to buy their own home. This is a basic human right, just like the right to education and basic health care. Creating a civilised society is not the same as creating a welfare society. Home owners become stakeholders of their society. This leads to improved social stability, increased civic participation, lower crime rates and even reduced dependence on social assistance. It also leads to a reduction in the gap between rich and poor.

Property should be considered a natural resource, rather than a mere commodity which reduces people to the level of rent or mortgage slaves. A property and inheritance tax should be imposed on those people who own multiple properties and collect rents. The rich enjoy low taxes on rental income and capital gains from property.

Until we achieve a home-ownership rate above 87 per cent (like Singapore), it is fair to take measures that stabilise property prices.

People talk about poverty eradication, a minimum wage and "fruit money" for the elderly, but the root of all problems is caused by housing ownership being too exclusive. We need democratisation of home ownership for all. What we do not need are all these daily squabbles on democracy, or politicising the illegal structures in the chief executive's home.

Bernard Lee, Tsuen Wan