More needs to be done to help ease Hong Kong’s housing crunch
Financial Secretary Paul Chan Mo-po did not do enough to address the city’s property crisis in last week’s budget. While talk of a rent tax deduction and enhancing transparency in land sales are welcome, more resolute measures have to be taken
No government budget can avoid broaching the city’s housing crunch. But to the dismay of many people, Financial Secretary Paul Chan Mo-po has not addressed the issue enough in his fiscal blueprint last week. That is why he was repeatedly questioned by lawmakers, journalists and members of the public over the past few days over the dearth of land and housing initiatives.
If there is any positive note on this front, it would be the rental tax deduction being studied by the government. Responding to criticism in a radio programme last week, Chan revealed that the option was being seriously considered. As it involved changing the computer system of the tax authorities, implementation in the new financial year would be difficult, he said. But he later played down the idea, saying it would be misleading to discuss the idea in public at this stage because the full details had yet to be sorted out. Alas, public expectation has already been raised.
In the absence of more effective measures to make residential properties more affordable, the proposed tax deduction for rental payments appear to be the next best option. Given our public coffers are overflowing and first-time homebuyers are also given a similar deduction, it makes sense to extend the concession to tenants.
The impact on the rental market is perhaps a more important issue for careful consideration. There has been suggestion that residential rents may be propped up as a result of government intervention. Officials must study carefully and give a full public account of its deliberations in due course.
Another welcome move is to enhance the transparency in land sales. Instead of just announcing the winning tender, the development minister said unsuccessful bids would also be disclosed on an anonymous basis. Observers believe the transparency could curb overly aggressive bidding and help cool down the property market. Whether prices will be rationalised as a result will be closely watched by the people.
The finance chief has also rightly expressed concerns over some questionable sales tactics by developers. It is not uncommon for an individual company to withhold newly built units from sale pending better timing or to test the market response by releasing a few units without an asking price. Chan needs to go beyond rhetoric to consider tightening the law further.
It takes more than a single budget to ease our worsening housing shortage. It is good to learn that more options are being studied. Officials are expected to exhaust all possible ways to tackle the problem. More resolute measures have to be taken to show that the new government is determined to do better on this front.