Loans plan ‘could help extra 10,000 Hongkongers a year’ get onto property ladder
Young or middle-class Hongkongers struggling with sky-high rents should be given leg-up onto housing ladder through interest-free loans, says Chinese University scholar
More than 10,000 young or middle-class Hongkongers every year could be given the chance to own their own home if the government offered interest-free loans using just a fifth of its huge annual land revenues, a leading adviser on long-term fiscal planning has proposed.
Emeritus professor Liu Pak-wai of the Chinese University of Hong Kong put forward the idea as government officials face mounting criticism over a huge surplus projected for the 2018-19 city budget, which lawmakers said should be invested in social programmes.
“High property prices and rents are closely related to high land prices. They are effectively a ‘tax’ as they reduce people’s disposal income,” Liu said.
“But this is not an equitable tax as property owners actually become winners” owing to spiralling asset prices, he said.
“If the government obtains huge land revenues from these high land prices, why can’t it use that money to help the losers?”
Liu’s proposal came after a 2014 study that raised fears of a long-term structural deficit in government budgets attracted sharp criticism this week for sounding a false alarm. Economists argued that a deficit forecast to set in by 2021 would in fact come much later, if at all.