As the last howls of anguish about unaffordable housing echo through Hong Kong’s avenues and alleyways, a new and contrasting chorus of screeching and wailing rises to warn the city of an even greater peril: property prices that are too low. The dread prospect of the middle class being able to purchase a home and still have enough cash left over for food follows the dismal failure of our leading real estate company, the Lands Department, to auction a scrap of reclamation out at Tung Chung for the sort of bubble-about-to-burst sum that seemed inevitable a few weeks back.
The developer that won the auction, privately held Nan Fung – accustomed to making do with inferior lots the big boys don’t want – had to bid against itself to meet the reserve price. The lack of interest shown by Cheung Kong, Sun Hung Kai and the other cartel leaders is probably due to weakening market sentiment and upcoming auctions for bigger and better locations. But the Standard’s fictitious columnist Mary Ma floats the possibility that the barons are boycotting government land sales to protest new rules that make it slightly harder for them to rip off people deluded or desperate enough to buy their nasty overpriced rabbit hutches.
They have done this before; it was back in the old days when the Hong Kong government measured its total reserves in billions rather than trillions and genuinely needed the flow of revenue from land sales. The developers have less clout these days (not that officials realize it). So the ‘Mary Ma’ theory, we can safely assume, is an attempt by the Sing Tao Group’s proprietor to help out his fellow tycoons/advertisers by starting a lame rumour: if this wanton persecution of innocent property moguls continues, the righteous wrath of the cartel shall be visited upon the government’s fiscal well-being for this and for 10 generations to come.
According to the Business Week article, the auction price of HK$2,426 a square foot translates into apartments going for HK$4,500 a square foot. This is 7% above current home prices in the far-flung pollution trap that is Tung Chung – hence the panicky, wrist-slashing, end-of-civilization tone of the Standard’s bed-wetting reporters in their story about the seller who had to trim his asking price from HK$2.8mn to HK$2.65mn. “Small concrete box beneath mosquito-infested hills out near airport worth less than gullible nonentity thought! Read all about it!” The horror.
To quote today’s guest artiste, singing some of the most erudite lines ever composed on the subject of Hong Kong’s property-scam pyramid scheme:
all the low are living high.
Every city’s got em
can we ever stop em
some of us are gonna try.
Or then again maybe not.