QUOTE OF THE MONTH award goes to a 'well-placed government source' who says we need no longer worry about a glut of housing as he has in his hands a report that finally reveals all and proves the glut will soon be absorbed. I can well understand why this official does not want his name revealed. Nor did I in my schooldays when I had not done my homework. The difference is that when I presented my homework late, I did not try to make it up to the teacher with claims of having made a marvellous new discovery. Mr Well-Placed-Source does so, however, when he said that in the past, there were no detailed figures to back up property market forecasts. 'With detailed figures, there are a lot of things we can do now,' he told our reporter, and for that preposterous claim of having achieved a first, he rises to the top for Quote of the Month award. Listen, Mr Source, every year your Lands Department publishes a comprehensive Ratings and Valuation survey that lists the floor area of the stock, completions, authorisations, commencements and take-up of residential, office, retail, industrial and all other forms of property in the public and private sector. It is a thick book. It is in fact the Bible of the Hong Kong property market. It has it all. Aside from this Bible, every month several government departments publish detailed monthly and quarterly figures on a wide range of other property data, including prices and rents broken down by sector and location, construction activity, mortgages, take-up, credit position and the list just goes on and on. It is by far the most comprehensive statistical coverage of property to be seen anywhere in Asia. When I worked as a research director in the investment business, one of my most difficult tasks was to hire property analysts who could contribute from day one. There was just so much for them to absorb that you could never transfer an analyst to property from another sector. Getting up to speed with all the information available was a task of up to a year. The studies that some of them did on forecasts of supply and demand were also marvels of detailed work and never were they chary about sharing that work with government officials. They felt honoured to be asked and wondered why they so rarely were. Some of them even went well past the published figures in the work they did. I knew one stockbroker who as far back as 1980 used to charter a private airplane to fly over Kowloon with a camera to check progress of work on property developments. Ask him and, after he had told his clients, he would show you the pictures. And are we to believe that only now is a detailed study available? On your bike, Mr Source. You simply have not done the work and have not even bothered to ask others. There you have the long and short of it. Even if it were true, could you please tell us, sir, what we are now to make of all those confident government prognostications we have had right up to the present day? Would you care to stand up in front of the class now and tell us that it was all nonsense, that you did not have detailed figures on property and that it was just bluster? Could we have that confession from you. How interesting to see you make the discovery that new supply is going down and any recovery of demand will reduce vacancies. Have you heard, by the way, that a fellow named Christopher Columbus got on a sailing ship a little while back and found land where he did not expect it? Fact. Hard to believe, I know, but there you go. Ain't discovery a wonderful thing? Here is another discovery for you to make. The vacancy rate in residential property never goes to zero. There is always a frictional level of 4-5 per cent, which represents people moving out or not yet having moved in. Thus the market does not have to absorb all of the 74,200 flats vacant at the end of last year before prices go up again. Take-up of about 25,000 of those flats, what developers can sell in a few good weekends, will do the trick of bringing the vacancy rate back to the frictional level. And could you please show us what section of your new study tells you that a rise in demand for residential property is correlated to tourism and export growth, as you suggest it is. I have gone through the figures and I do not see it at all. Back to school with you, Mr Source, and this time please remember to do your assigned homework if you want to tell others who have actually done it that you know more than they do.
