Safe Hong Kong mourns yet again for its apparently catastrophe-prone tourists overseas. Financial Secretary John Tsang prepares for what pundits expect to be a weirdly cautious budget starting in a few minutes. The rebates, allowances and other handouts to which we have all grown so accustomed will – the soothsayers say – be tweaked downwards, as if we need to be surreptitiously weaned from them.
While they are waiting, lawmakers accuse the government of negligence while Cheung Kong signed up buyers for its Apex Horizons sort-of-hotel development. At the mercy of commission-driven real-estate agents, the story goes, hapless purchasers thought they were getting residential units; now Lands Director Bernadette Linn makes it clear they weren’t, and threatens to send her valiant Hotel Residency Inspection Gestapo SWAT Team into suites to check that no-one is staying more than 28 days, putting pictures on the walls or getting too comfortable on the couch. Inevitably, the lawmakers liken the case to the Lehman Minibonds Scandal Outrage Saga Massacre.
While the parallels aren’t exact, it is easy to see why the government is going to come under pressure to bail out the investors/buyers/victims/fools. First, obviously, the alleged mis-selling. Then, according to an expert on RTHK3 this morning, the initial paperwork buyers signed committed them to signing the final no-turning-back purchase agreement within an uncommonly short time. On top of that, there’s the government’s ‘negligence’. The South China Morning Post today says:
Linn said her department had reminded the developer in January that the buyers could not keep the units for private residential use.
“We did not take the case public because at that time there was no evidence of abuse or of anyone being misled,” she said.
Of course there wasn’t: the big sales push hadn’t started yet. Bernadette’s officials could have issued a factual statement advising buyers of the non-residential status of individually sold hotel suites. True, it would have been an unusual step. True, it might have pissed off Cheung Kong boss Li Ka-shing – or more to the point, looked as if it were designed to do so. True, the government back in 2011 had reminded the developer it would have to alert buyers as to the project’s status. But these are strange times. The only thing that’s ticking over as usual is Hongkongers’ heightened sense of ‘fairness’. It could have been anyone’s mother or brother buying one of those suites, or sitting in that hot air balloon over Luxor.
If the government buckled, would it bully Cheung Kong into refunding or compensating buyers? Or would it pick on the intermediaries? Presumably, the government will stand firm. With a bubble due to burst at some point, and thousands of idiots at risk of being plunged into negative equity, this would be an insane time to set such a precedent. More likely, we will see disgruntled investors sitting outside Li Ka-shing’s many properties and outlets banging drums in protest for years to come, as per the minibond folk. (Did any minibond victims also buy a unit at Apex Horizons? There would be a movie in that.)
To cheer everyone up, the Standard indulges us with no fewer than four heart-warming stories. Chinese Estates Holdings is (it says) getting HK$80,000-90,000 a square foot for retail property in Causeway Bay. ‘Veteran investor’ Johnny Cheung made HK$2 million by flipping a shop in Western. (Talk about a role model – good old Johnny!) A 900-sq ft apartment in Taikoo Shing has been rented out for an unprecedented HK$41,000 a month. And a Mainlander stumped up HK$1.5 million in stamp duty to buy a shoebox across the road in Kornhill. Four little rays of sunshine to brighten up all our lives.