Get tough with people from outside Hong Kong wanting to buy flats
A survey recently done by the Time Out Hong Kong magazine showed that an amazing 81 per cent of respondents rented their flat in Hong Kong, with an average rental per month of HK$17,100.
The median average household income is around HK$22,900. It would take an average household around 17 years to purchase a 500 sq ft flat. This is tantamount to modern-day slavery disguised as capitalism, or what we proudly boast as the "freest economy" in the world , where the rich are free to enslave the poor.
The main beneficiaries of our housing policy are the average rich investor (many non-locals ), sovereign wealth funds, property developers and landlords. Why have a policy that serves the investment needs of the world at the expense of Hongkongers' genuine housing needs?
The devaluation of the renminbi has prompted mainlanders to purchase property here, providing them with a safe haven to park their money. Likewise, when their currency was rising, they purchased property here at ease. In both cases they drive up prices in the city.
Some opportunistic politicians have accused the administration of Chief Executive Leung Chun-ying of interfering in the property market; which has failed to hold down prices.
Had Mr Leung imposed more severe measures on foreign purchases similar to the restrictions on sales of tins of milk formula, given the high number of mainland buyers, property prices would have fallen.
Hong Kong should have imposed at least a 30 per cent buyers' stamp duty on foreigners. Any purchases by foreigners, or locals who already own homes, for properties worth below HK$6 million should also be temporarily banned, ensuring the grass roots who genuinely buy for end-user needs are not priced out.
Until supply is increased, or interest rates rise, intervention is necessary. This is also important until a more sustainable government revenue generation system is introduced with more progressive taxation, such as capital gains, estate and inheritance taxes.
The proximity of Hong Kong to the mainland exacerbates the problem. It is a fact that well-off citizens from the mainland have contributed to property bubbles worldwide - from Vancouver to Singapore to Sydney.
But governments intervene. The free market alone will not solve this property crisis for us. Therefore, the Hong Kong government must intervene more, but in a constructive way.
Bernard E. S. Lee, Tsuen Wan