Beware the big impending Hong Kong property bust
Michael Chugani says this is last chance for Leung Chun-ying to make an impact on overheated property market and leave at least one legacy
So many thousands scrambled for a few hundred flats last week the developers made them draw lots. Yes, buying a home has become a lottery. Imagine, picking numbers to line the pockets of developers by paying over HK$5 million for flats barely 300 sq ft. Nut jobs, as US President Donald Trump would say.
Developers are duping buyers by talking up the market and circumventing government cooling measures. But beware, a crash is coming. It’s just a question of when. Our property market is now largely a casino for investors and mainland developers either fleeing overpriced land at home or wanting to get their money out.
The last time a tsunami swept away the overheated market during the Asian financial crisis combined with the Sars outbreak, the government bailed out home owners by bowing to property tycoons. It froze land sales and home ownership flats to drive up the market.
But politics judges leaders by success or failure. Trying doesn’t count. Leung failed after trying for five years to provide affordable housing. His cooling measures all fizzled. The success formula is to pummel hard in quick succession. Cooling measures in dribs and drabs only encourage the nut jobs and draw sneers from developers.
Leung has one more month in office. Dare he hit hard with a fistful of measures all coming at the same time? Curing the madness that afflicts our property market will leave him with at least one legacy.