As yesterday’s massive 0.35% collapse in property stocks shows, the Hong Kong government is finally getting tough with developers’ sales tactics. After consultations in an atmosphere of mutual respect and understanding, officials are now politely requesting the real estate cartel to voluntarily:
- tell prospective home-buyers where the property will be
- tell them the price more than five minutes before they sign on the dotted line at midnight while panicked crowds outside bang on the door insisting to be allowed in to pay 10% more
- give them a somewhat-you-know-kinda-vaguely better idea of what the apartment will actually look like, eg, where the walls will be
- conceal advance cut-price sales to family and friends more effectively, so everyone else doesn’t get so upset
courtesy of Glengarry Glen Ross
In return, the government assures property developers that it will:
- continue to keep land in artificially short supply to keep prices high
- permit them to continue colluding at land auctions and in sales timing, pricing, etc
- let them carry on adding 200 square feet of elevator shaft, stairwell, external air-conditioner platform, hallway, entrance lobby, pigeons’ nest and mailbox interior to every 500 square feet of advertised apartment area
- publicly defend their inalienable right to make profit margins of at least 50%
- recognize their children’s contribution to the community by naming them Justices of the Peace this year, giving them Gold Bauhinia Stars further ahead and actively considering the possibility of dukedoms
If the developers fail to give the general impression that they are going along with this deal, officials will talk about giving active consideration to the potential possibility of discussing statutory measures at some stage in the future, though of course without doing anything that might threaten our Healthy Property Market.
This is of course a Good Thing for the community, as it guarantees the market stability we enjoy from having high property prices and avoids the dreaded market volatility we would suffer if homes became more affordable.
On the one hand, it means home-buyers will be ripped off about 1% less than before. On the other hand, this deal recognizes that, unlike in other parts of the planet, the gross domestic product in Hong Kong rises every time someone sells a property for more than they bought it. And if families didn’t have to spend at least 35% of their incomes over a 20-year period to buy a 400-square-foot home, the economy would collapse. And without the multiple billions of dollars in profit being made by the property cartel every year, tycoons would make fewer donations to mainland universities and local medical schools, cross-border integration and partnership would cease, there would be widespread unemployment, all our babies would catch rickets and men’s penises would shrivel up and drop off.
So we have struck a good balance.