I have a copy of Extraordinary Popular Delusions and the Madness of Crowds. (Get yours for free here.) It came out in 1841, the same year the UK took Hong Kong Island, but if he were around today, author Charles Mackay would surely mention the Big Lychee’s latter-day tulip manias. To quote from Amazon’s review of the book: “Why do otherwise intelligent individuals form seething masses of idiocy when they engage in collective action? Why do financially sensible people jump lemming-like into hare-brained speculative frenzies…?” To which we can add: who seriously thinks a car parking space in the little patch of paradise that is Tai Wai can be worth HK$1.3 million?
The Standard’s story leaves us in little doubt that the bubble du jour is car spaces. But you have to wonder: is the tycoon-owned and tycoon-friendly paper reporting a bubble, or simply urging one on? The report is about one (allegedly Nazi-managed) development by Li Ka-shing’s Cheung Kong group. It looks rather as if, deprived of money-laundering Mainland customers by Hong Kong’s property market cooling measures, the company is applying its apartment-selling tactics to humble parking spaces – which developers have traditionally seen as a source of rental income. Drip-feed units onto the market, while a cooperative media quote real-estate agents’ tales not only of instant profits, but of rental yields that still look enticing. (The project is atop an MTR depot, so there may be fewer parking slots than in sites farther from the railway. The developer says only residents can buy these car parking spaces, though that doesn’t seem to be affecting this mini-mania.)
The other developers will, as always, imitate the master. And, if a real bubble is to take place, speculators obsessed with quick, easy returns will take the bait. Some of them will not be lemmings at all, but seasoned lemming psychologists, calculating that if you get in soon enough and the developers, agencies and media do their hype thing, idiots afraid of ‘losing out’ will join in the rush. (Seriously: how much hot Mainland money is really flooding into parking spaces?)
The extra taxes recently imposed to cool the market apply only to residential units. With mortgages available for parking slots, this craze will be open to all, or at least anyone who can scrape a few hundred thousand Hong Kong bucks together; if past bubbles are any guide, families will pool their savings. The Hong Kong Monetary Policy sees no need to worry because the parking-space market is not big enough to affect the banking system, and the assets being traded are not a necessity or politically sensitive.
If a bubble really takes place and thousands of HK$1 million dollar-plus parking slots start changing hands, some people will end up holding what had been some horribly overpriced little oblongs of concrete.
Mackay’s book did not address only financial bubbles, but other forms of collective insanity, such as the rush of Medieval peasants to join the crusades and outbreaks of witch-burning. Maybe because he was Scottish, he neglected one of the worst forms of communal mental disease: golf. There is something tragic about using up hours walking around a field in funny pink or yellow clothes hitting a little ball with a stick. When a whole segment of society is addicted to it, it gets scary.
Environmental activists Green Sense have a refreshingly bold suggestion (not their first): develop the Fanling golf course into housing for 100,000 people. Amusingly, they promise that a team of young architects are working on a blueprint. The Hong Kong Golf Club’s boss is alarmed enough to say “Hong Kong must have its own course as an international city to attract investors to visit,” which tells us something about how golf damages its victims’ sense of reality.*
Critics could point out that if Hong Kong actually has a surplus of housing, thanks to all the empty apartments out there, it would not make ‘green sense’ to build more. But the activists still have a point. This is a government-owned, 170-hectare space that could be used for all sorts of useful purposes: for example, you could get 50,000 7-Elevens in that area, and still have room for the world’s biggest columbarium.
Golfers are 30 times more likely than the rest of us to be struck by lightning. It is the only interesting thing about them. Everything else you need to know about their illness is here. What they need is not help so much as drastic, cold-turkey-style intervention, and Green Sense surely point the way to a humanitarian solution to this affliction.
* Hong Kong is a net outbound investor and does not need to seek inward investment; any investor who will not look at a possible location unless it has a golf course will probably not allocate capital efficiently; if these investors are only ‘visitors’, we have enough already, thanks.
The solution would seem to be to do what they have been doing in America for years:
Live in your car!
And don’t knock golf.
It gives White people the one chance they have in their life to dress like Black people.
Tai Wai is one of the more pleasant areas: lots of old low rises and family businesses, even on-street parking.
We need more info about these parking spaces: seaview? square footage? aircon? high enough to stack 2 portacabins/containers with shower facilities? boundaries already surveyed or subject to beggar-my-neighbour, non-zero-sum, near-subliminal land grabbing? do the neighbours have 3 stars and/or fat kids in the back?
Since the imposition of the new tax, registered housing (increasingly arcane anti-squatter measure introduced in the 70′) stock in Big Wave Bay and Shek O, which affords you no personal title, cannot be mortgaged nor transferred, is selling for even more eye-watering sums than before.
Illegal 4 bedroom house built to the most stringent standards of cost minimisation and as an affront to over 2 millennia of architectural evolution… Yours for 10.4m. 700sqf carbon-neutral bungalow lovingly built by Uncle Cheung over 15 years from scrap bricks and leftover concrete, a snip for 8m cash. The only pleasure to be had from the mess is some lucky punter managed to offload their house of 10 years to the awful French boss of Shanghai Tang for 7m+.. Oh the joy.
As for golf – it’s God’s way of corralling the blandest people on the planet into one area so the rest of us can enjoy ourselves elsewhere.
Meanwhile, someone is releasing sex tapes of CCP officials from Chongqing.
If there was a definition of flaccidity-inducing video, that would be it.
Except perhaps a grainy 1970s film of a rotten mouth-breathed Mao Zedong trying to rejuvenate his yang energies on some poor village beauty. Hu Jintao did the same thing, but apparently restricted himself to PLA beauties and was nice enough to give them a promotion afterwards.
Cerebos, Could you tell us more? Houses that can be sold but not transferred? Do they have a registration number of some sort? Do they show up on Lot Index Plans?
I’ve often wondered whether normal people can buy squatters’ “huts”, fishermen’s resettlement houses, floating structures, temples, graves etc.
Just build your own squatter mansion. Lands Department will come and paint a nice registration number on it and CEDD may put up some “danger of landslides” signs nearby, but otherwise no-one will bother you.
Totally off topic, but here’s something for RTP:
The mighty George said it best: http://www.youtube.com/watch?v=Z4w7H48tBS8