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Who's to blame for land shortage?

stephen or

While none of us like seeing Hong Kong’s already high housing prices continue to soar, it would be unfair to simply blame it on the government's incompetence. In fact, it is Hong Kong legislators, those who are supposed to represent the benefits and demands of their constituents, who must take at least part of the responsibility. Every time the government proposes a land reclamation bill, certain members of the legislature will swiftly voice their oppositions and obtain backing from environmental groups. By hijacking the moral high ground and antagonising any plans that propose increasing land supply, these members are generally able to successfully politicise the issue and stop bills being passed that are supposed to improve people’s quality of life. Caught in the contention between supporters and opposers, the government officers in charge of land supply matters have been subjected to vicious personal attacks. Sadly, as a result, many public servants have lost their passion for public service and become indifferent workers who just want to do nothing and stay out of trouble.

This has been an age-old problem and a vicious cycle: the ineffectiveness of Hong Kong’s housing policies has resulted in the worsening of the supply-demand imbalance. After the 2008 financial crisis, countries around the world pushed forward financial quantitative easing measures, thus pushing up global asset prices along the way. Hong Kong properties have always been an ideal choice of wealth preservation for local and mainland investors, who then rushed into the Hong Kong housing market, resulting in an even more acute housing shortage for seekers of self-occupied homes, as well as skyrocketing home prices. As the value of properties appreciate, home owners sit on large amounts of assets, while others brave steep prices and high interest rates to procure a housing unit—any unit— regardless of whether they actually like it or not.

Then there are those who can’t afford to buy a home, or low-income citizens who find everyday a struggle; for this demographic, simply getting a public rental housing unit would be a dream come true.

Adding to this, a U.S.—China trade war is heating up. Between a confident President Trump and a well-prepared Chinese government, it is very possible that the current quarrel will escalate into sanctions and tit-for-tat retaliations, and Hong Kong is likely to suffer casualties if a full-blown trade war does happen. 

Real estate is a valuable yet unmovable asset, so it would only be a natural decision for investors to liquidise their properties as a risk prevention measure in times of a trade war. However, such setbacks are usually temporary, and with the Greater Bay Area integration in full steam, I remain greatly optimistic about the future of Hong Kong’s housing market.