No news is not always good news
This year’s policy address offers no real solutions to the city’s housing conundrum
| Text : Elizabeth Kerr | Photo : www.thinkstockphotos.com |
In the last week of October, legislator Lee Wing-tat took the developers of Queen’s Cube in Wanchai, the Nan Fung Group and the Urban Renewal Authority, to task for its pricing and failure to sell more than five of the building’s units. All the suites are 400-square foot (approximately) studios that investors usually can’t resist, as brisk sales of similar properties on Caine Road proved. But prices were too high given the location according to many property professionals. If they were too high for investors seeking a closet to rent to unsuspecting new arrivals it the city, where does that leave everyone else?
On another front, the HSBC released a statement to the effect that the bank believed local home prices would rise an additional 15 percent in the next year. Continuing low interest rates and a lack of (are you tired of this phrase yet?) sufficient new supply until at least 2012 are among a host of reasons.
The Standard reported HSBC’s Hong Kong chief executive Mark McCombe called the policy address’s approach to affordability, “prudent.” “I think it is ... extremely important that people in Hong Kong have a chance to own their homes,” he said. And so there it is. Many in Hong Kong, from middle-income earners, to newly graduated students, to developers and landlords and everyone in between waited, perhaps, anxiously for Donald Tsang’s words on housing in this year’s policy address. With the Housing Authority’s remaining Home Ownership Scheme flats nearly gone, everyone wanted to know if it was coming back any time soon.
It looks like the wait continues. Tsang outlined a number of initiatives designed to improve quality of life: the implementation of a minimum wage (though Tsang didn’t set a rate), post-hospital care for the elderly, expanded district child care programmes, added health and welfare services for “high risk” women (high risk of what is unclear) and education subsidies among others.
But where all these people are going to live is a mystery. Hong Kong Federation of Trade Unions’ Wong Kwok-hing said most the proposals were well intentioned but lacked teeth, or as he said, “depth, consideration and sustainability.” And for housing policy, Wong said Tsang didn’t adequately address the issue by refusing to restart construction on HOS flats, and suggested the rent-to-own idea being bandied around right now was more trouble than it was worth. “The scheme disappointed and angered the public. As a result, people have lost faith in the government,” Wong said, also in The Standard.
Other than increasing land supply for the notoriously stuck sandwich class, Tsang said little directly about housing, an almost out of control market, and widespread public antagonism directed at developers. The decision to remove property ownership as a means to residency for Mainland buyers could go a long way to slowing down the upward spiral too, but most of these “solutions” come as side effects.
Tsang says he understands, “that people are frustrated that they cannot afford a house even with years of savings,” but asks whether or not, “the government should extend credit to help families get on the property ladder.” The aforementioned rent-to-buy flats involve rents being capped for five years to allow residents time to save down payments, but as usual, Tsang and Co., avoided getting to the heart of the matter, which many believe is overly influential developers. Better luck next year.
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