What next after a vacancy tax on developers hoarding empty flats?
CY Leung’s expression of regret on housing highlights conflict between reality and political expediency – but are we doomed to repeat mistakes of the past
As expected, the city’s developers wasted no time in forming a united front to challenge the effectiveness of the coming vacancy tax on empty new flats they have been hoarding.
They raised one key question: why only target them while giving a free pass to speculators who are also holding on to vacant flats in the second-hand market?
Their concerns are understandable. The crux of the matter is how much of a difference it will make to taming the city’s runaway housing prices, even with the release of all the 9,000 flats that developers are estimated to be hoarding. Not to mention that developers are accusing the government of inflating the figure by using a different method of calculation.
While the answer is quite obvious, it now seems a greater deterrent is inbound after the latest round of interest rate increases by the US Federal Reserve.
Hong Kong Monetary Authority chief executive Norman Chan Tak-lam has warned potential homebuyers and mortgage bearers of the growing financial burden, and expressed hope it will help ensure a “more healthy development” of the property market.