Nothing is more likely to stimulate a small avalanche of hypocrisy than discussion about land and property in Hong Kong. Property developers, allegedly speaking in the name of community interests, arrive in their chauffeured limos to lobby officials for a greater supply of cheaper land. Free-market ideologues, rattling around their lavish apartments, pontificate about why making property purchase accessible to those on low incomes distorts sacred non-intervention policies. Meanwhile, hapless members of the government oscillate between repeating the long-dead mantra of 'positive non-interventionism' while busying themselves with finding new ways to intervene in the property market.
All this is taking place in Hong Kong - the only avowedly free-enterprise society where the government retains total ownership of all land with the anachronistic exception of St John's Cathedral. Furthermore, Hong Kong houses a higher percentage of its population in public housing than any other capitalist society. In case anyone gets carried away with the idea that the origins of this vast housing programme were purely altruistic, it is worth remembering it was widely supported by industrialists keen to keep wages low by removing the pressure of high housing costs.
Fast forward to today and we see Chief Executive Donald Tsang Yam-kuen promising to intervene to avert a property bubble and we see calls for reform of the land sales policy from self-interested property developers.
At the upper end of the property market, the government thinks it is moving decisively to cool the market by imposing a 60 per cent lending cap on loans to this sector. This is no more than vaguely amusing to cash-rich buyers who have no need to borrow. Many of them are from the mainland and are holding hot cash that they are keen to offload into property.
Meanwhile, anyone who has taken more than a few moments to study the government's land sale policy knows perfectly well that it is expressly designed to favour a small clutch of larger property developers. Alone or in concert, they are the only ones able to bid for the large land plots, which tend to be offered in government land sales alongside smaller plots at sites adjacent to the developer's existing holdings.
This encouragement of monopolistic practices is carried out under the banner of the free market and ensures competition is severely limited. Unsurprisingly, the larger property developers are keen to prevent changes that threaten their monopoly, but they are still pressing for ways of acquiring land at lower cost.
While the developers understandably focus on increasing profitability, the one serious method of creating a bigger property-owning class in Hong Kong has been firmly ruled out by the Tsang administration. It says that the Home Ownership Scheme, which juddered to a halt in 2002, will not be revived although some still-unsold HOS properties will be offered for sale.
