There is no guarantee that you will own your flat forever.
While many Hongkongers are putting their life savings into residential property, few are aware that the land leases granted after the handover no longer have a renewable clause.
This means that, from 2047, when guarantees enshrined in the Basic Law expire, the extension of many land leases will depend entirely on the government's discretion. While most people expect the Lands Department to renew the expired leases, the absence of a clear government policy on the issue means there will always be a risk.
Property expert Professor Chau Kwong-wing, of the University of Hong Kong, said 2047 'may sound too distant but it actually is going to affect us in a few years' time, when you apply for a long-term housing mortgage'.
Critics are now urging the government to clarify the conditions of renewal as early as possible to avoid unnecessary fluctuations in the property market - at a time when the city's economy is plagued by uncertainty. It is also an issue that the next chief executive will need to consider for a city in which there is no freehold, except for the land in Central on which St John's Cathedral stands.
Properties built before 1984 generally have a renewable clause in their land leases which guarantees an extension once these expire. Things changed after Beijing and London that year signed the Sino-British Joint Declaration, which guaranteed Hong Kong's social and economic systems would remain unchanged for 50 years after the 1997 handover. From 1984, it was no longer a given that a land lease would be renewed after 50 years, and after 1997 most land leases no longer had a renewable clause. This is a particular problem for rural properties and those to the north of Boundary Street in Kowloon, which marks the border between the old colony of Hong Kong and the New Territories.
The impact could be felt as early as in five years' time when a home-buyer applies to a bank for a 30-year mortgage.
'Will the bank be willing to take the risk given there was no guarantee that the lease will be renewed?' Chau asked.
Ng Leung-sing, a member of the now-defunct Sino-British Land Commission formed under the Joint Declaration, said the commission did not discuss the arrangement of land leases after 2047.
'The future arrangement will be made according to the central government,' Ng said. 'My personal view is that leases are expected to be renewed if there is no significant change in land policy.'
But Ng said he expected large numbers of land owners and banks to ask for a clear arrangement when the date approaches. 'It's about their rights and interests,' he said.
Chau said land leases without renewable clauses are supposed to be resumed by the government when leases expire. He added that the current practice of discretionary renewal by the Lands Department - making the lease perpetual, at least in effect - gives the public a false impression of owning a property forever.
'Different expectations of what will happen after 2047 would also cause confusion and a fluctuating property market,' he said, urging the government to spell out clearly the conditions for the renewal of leases.
One suggestion, he said, is to pass legislation empowering flat owners to seek the renewal of an expired land lease.
Poon Wing-cheung, a real estate professor at City University and a spokesman for the Institute of Surveyors, said few buyers paid attention to the land lease term when buying a flat.
'Buying a non-renewable property for a short renting period is risky,' he said. 'Whether the risk is too high that the property price will come down depends on the public's confidence in the future political system.'
He said a responsible government should resolve the issue in a timely fashion before it turns into a social problem, with no bank offering a mortgage extending beyond 2047.
Major banks in Hong Kong like Hang Seng and Standard Chartered said they still have not come up with a policy for mortgages extending beyond 2047.
A Hang Seng Bank spokesman said it reviews its mortgage terms from time to time. At present, the bank still offers residential mortgage loans up to 2042.
Eric Cheung Tat-ming, a law professor at the University of Hong Kong, said the Joint Declaration clearly states that land leases without a renewable clause can be extended to 2047. Owners can launch a judicial review against the Lands Department if it refuses to renew the land lease, he said.
'But what will happen after 2047 is not purely a legal issue,' he said. 'It's also about the people's expectation and confidence, whether they will take risk in property transactions. The sooner the government deals with it, the lower the risk.'
A Development Bureau spokeswoman said owners of non-renewable leases do not have an automatic right of renewal. The government, acting in the capacity of a landlord, has in the past 10 years used its discretion to extend 14 residential leases, each for a term of 50 years and subject to the payment of land rent.
The bureau would not say whether the practice will continue for leases expiring after 2047.