Ideological lies continue being told about free markets and capitalism
About 50 per cent of Hongkongers do not own homes and are therefore forced to rent, which often takes up half their income.
In today’s Hong Kong, those who can afford the down payment for a property and so qualify for a housing loan often pay the minimum required, than rent the property out.
Technically , landlords should get bank approval for this, and be restricted from renting out properties where the principal owed is still above 50 per cent. But banks turn a blind eye, as long as monthly loan mortgages are serviced. The Hong Kong Monetary Authority also ignores this.
Tenants who can’t afford to purchase basically help the wealthier landlords pay off their housing loans. With a severe housing shortage indicated by low vacancy rates, renters are at the mercy of landlords.
Many who invest in Hong Kong’s property market proudly call it “investment”, although it’s a situation where others suffer. Think of it this way: if oxygen were limited and we allowed both local and foreign investors to purchase and invest in oxygen in advance, leveraging them up with bank loans, and they then sold it back to locals most of whom found the prices unaffordably high – many would suffocate.
Investment in property doesn’t bring any economic benefit to society; as price increases do not create more property.
The value of property, or land, going up doesn’t make the city more productive. With capital going into property investments, less capital goes into productive investments. Wages locally do not rise nor support such price increases, therefore buyers and investors are imported – pricing out locals.
Another common excuse is to blame the high prices on low interest rates from the dollar peg. Environmentalists, political groups and existing residents often reject new developments and supply increases, which also keeps prices high.
Ideological lies continue being told about free markets and capitalism trickling down to all, while The Heritage Foundation affirms our economic philosophy – to our own detriment.
Business groups often say it is their “right in Hong Kong to conduct business”, and advocate non-restriction/intervention in terms of their economic freedoms and profit motives.
This right isn’t a given, or divinely assured to them, and can and has often been taken away, as history around the world has often shown – either through taxation or by force.
Bernard E. S. Lee, Tsuen Wan