Hong Kong has a genuine need for more affordable property
I agree with what Peter Guy says in his article (“Hong Kong’s property cartel is pushing wealth inequality to the brink”, November 17).
He referred to a Channel News Asia panel interview he participated in, where one of the other guests was Dr Law Chi-kwong, the secretary for labour and welfare.
Guy recalled that, during the programme, he had said reducing property prices was “an effective way to redistribute wealth” and this was rejected by the Hong Kong labour minister.
The government line is that Hongkongers would be afraid if real estate prices dropped by half. This is not necessarily true, as only about half the population are homeowners.
Many existing homeowners are waiting for prices to fall substantially, so that they can afford an upgrade to a larger flat.
Many of them would also prefer a fairer society, and would like to see Hong Kong’s cage homes and subdivided flats become a thing of the past.
Law said that increases in property prices are related to economic growth, and driven by strong demand rather than supply constraints. In fact, a lack of supply (from artificial suppression) is what’s driving prices up.
It’s also worth mentioning that the beneficiaries of the economic growth that Law mentions are mostly the landlord class and property tycoons, as it will take 38 years of average income to purchase a flat here.
Law is right that the rise in prices also comes from strong demand, but this is investment demand – purchases by rich locals and foreigners, especially mainlanders.
Investors and speculators know that the Hong Kong government simply cannot supply enough land and housing to meet the real housing needs of locals.
Add to that external and investment demands, and it’s a given that prices must continue rising. Low interest rates from the US dollar peg exacerbate this problem.
All this is done in the name of a free market system and non-government intervention, and the property tycoons are the winners in the end.
We need politicians who will work with the central government to rein in the property cartel.
Making property prices more affordable would create a more equitable and harmonious society. This is surely something Beijing would support.
Bernard E.S. Lee, Tsuen Wan