A STUDY group says the Government is using property market speculators as scapegoats while continuing to restrict the housing supply.
The University of Hong Kong's Centre for Real Estate and Urban Economics, in response to the Government's long-term housing strategy review, (LTHSR), said: 'Ominously, the LTHSR chapter on 'Maximising the Contribution of the Private Sector' is only 4.5 pages long, but almost one full page of that is focused on 'speculative' activity, the need to monitor it, and to take 'appropriate' measures when 'necessary'.' It added: 'It seems that when government policies fail, a convenient scapegoat is always needed - enter the speculator.' The submission notes that speculators have rarely counted for more than 7 per cent of transactions and play a critical role in any market, using classic arbitrage procedures aimed at buying low and selling high.
'They can fail in their gamble and lose money. They rarely, if ever, are responsible for the policy environment that makes this possible,' the submission said. Speculation in the property market would cease to be an issue if the government's policies did not restrain housing supply.
The centre has recommended that the incoming administration place the production of housing at the top of its priority list.
'One should choose alarmist rhetoric with care - nevertheless, it seems clear that a housing crisis is in the making,' the centre, which falls under the Department of Real Estate and Construction, says.
The submission points to the limited supply of developable sites available beyond 2001, a possible underestimation of Hong Kong's future population and slow re-zoning as areas of concern.
Lack of communication between the many branches and departments concerned in the clearance of land release and development was also an issue.
