Wednesday, October 16, 2013

Let me see if I've got this straight...

So, after Hong Kong property prices rise into the stratosphere, making a home unaffordable for anyone who doesn't have one already, the government finally recognises that the market is "overheated".  To fix this, they introduce extra stamp duty on property, making it even more unaffordable.

With me so far?  Good.  Now after months of this, the market is almost dead.  No one can afford to buy, so no one can sell.  So some developers start making promotional offers, including stamp duty rebates, in an effort to get the market restarted.  This, our esteemed Chief Executive solemnly declares on last night's news, "could have a negative impact on the property market".

So, let me see if I've got this straight.  The government makes property more expensive in order to make it more affordable.  Then when this bizarre policy somehow actually starts working, with developers effectively lowering their prices, far from welcoming this, the government pronounces it to be unhelpful.
You couldn't make this stuff up, could you?  Does anyone understand what's happening?  I can see two possible explanations:
  1. The government doesn't know what the hell it's doing; or
  2. despite its proclaimed commitment to more affordable housing, the government is secretly conspiring to keep prices out of reach of aspiring homeowners.
Take your pick...  I plump for number 1, but this being Hong Kong, number 2 isn't totally unthinkable.


Anonymous said...

The two options offered are not mutually exclusive.

nulle said...

I would choose option #3, both of the above.

a) the gov't doesn't know what it is doing, especially when it shifted from granting no addt'l TV broadcast licenese to only two. Especially the one denied the license most critical of the gov't AND incumbuent players.

b) the gov't keep the prices high so only mainland immigrants can afford private housing OR so build so much pressure massive amounts of public housing being built to satisfy mainly low education or low income mainland immigrants (aka New HKers)

I would be rich if I get a dime for each mainland locust killed in HK :p that would seriously solve a lot of problems in HK.

Private Beach said...

I can't endorse actually killing them, but reducing the inflow would help. We could start by checking more strictly on how many of the marriages that give them entry as spouses are genuine - anecdotal evidence suggests certainly not all. And Hong Kong should certainly have the power to refuse to accept convicted killers as immigrants, a decision now out of our hands.

My wife tells me that stamp duty rebates invite speculators back into the market at less risk to themselves, which is why the government is concerned about them.