Double Stamp Duty Victims? Let’s hope so

An average number of new disgruntled pressure groups started protesting in Hong Kong over the weekend, including the Sai Kung League Against Driving Into Cows and the No to Dumping 80% of All Trash in Tsuen Mun Campaign. And then there was the Alliance of Double Stamp Duty Victims march.

The name suggests that they support innocent home-buyers frozen out of the market by the extra levies the government has imposed on property transactions to (allegedly) ease prices. In fact, the organization represents real-estate agencies – the intermediaries who skim a commission off every deal. By pulling the plug on speculation as the frenzy expanded into such idiocies as hotel suites and parking spaces, the government has hit these agencies hard. They can make so much during a bubble that they outbid other retail outlets for ground-level space and drive ordinary shops out of whole stretches of streets in residential neighbourhoods. Recall that buying and selling little concrete boxes does not add to GDP. Even the cartel-supporting Standard’s ‘Mary Ma’ editorial struggles to express sympathy.

It would be heartening if the government announced that 90% of agencies should close, and 90% of the spotty inadequates who staff them find more productive employment. Instead, the official statement justifies the extra stamp duty as better than nothing as the bubble gets closer to bursting. (One factor in all this is that our lower-performing high schools produce graduates that are numerate and hard-working but still somehow barely fit for salaried, wealth-creating employment, and it’s either this or being an insurance salesman.)

The government press statement says the extraordinary measures “will be adjusted or withdrawn once the property market has restored to normal condition.” Can anyone remember a time when the real-estate sector was in a ‘normal condition’?

Not all critics oppose the extra stamp duty out of self-interest. Some dislike it in principle, for interfering in economic freedom and maybe even infringing the Basic Law. But this is about practical politics, not theoretical economics. When the government feels a need to do things like ban people from carrying more than two cans of infant formula out of the city, you know something isn’t right. Hong Kong is undergoing extreme economic distortions, and even the most competent and popular administration would be tempted to compensate in the short-term through counter-distortions.

The property bubble and unaffordability of housing is partly the result of ultra-low US interest rates and Hong Kong’s dollar peg. A further factor is the prevalent local investment psychology (not peculiar to Hong Kong) that real estate is the only asset class. Last but not least, there is past government policy to starve the market of supply and allow developers to build for outsiders and investors rather than end-users.

If critics of the extra stamp duty proposed scrapping the dollar peg or came up with some magic-wand quick-fix to the housing costs problem, maybe more people would listen. The only half-way sensible suggestion was to put container-accommodation in spare space under bridges, and few people above the age of 15 had the imagination to handle that idea.

The killer argument against the government measures is simply that they don’t work. But at the margins, at least, maybe they do. The recent peaking of residential prices – insofar as the indices are reliable given such low volumes – suggests that the government’s measures have had an impact. If the frenzy had been allowed to continue into and beyond parking-space territory, we would be building up towards an even bigger collapse when it finally comes, and secretaries and taxi drivers would have been caught up in it and we all know what happens next. It isn’t solving the problem, but it might be reducing the ultimate carnage a bit.

This is damning with faint praise. But then, we can look forward to seeing the sight of property agencies turning back into hairdressers and stationers, and agents flinging themselves from tall buildings – and consider saying to the government, “Okay, carry on.”


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16 Responses to Double Stamp Duty Victims? Let’s hope so

  1. Joe Blow says:

    Mary Ma is my mother.

    Her full name is Mary Blow-Me (anglicised to ‘Ma’).

  2. Agent provocateur says:

    Estate agents aggressively work with sellers to drive the prices up. Then, when looking for property they do little more than lead the way to an address and ask you to “sign here” and “here” and “here” before pocketing a hefty commission when the deal is done.

    If it starts raining estate agents, that will be wonderful. The greatest problem is that if the parasites throw themselves out of their windows in despair it won’t matter because they are all on the ground floor.

  3. Gweiloeye says:

    Dare i say it but these agents when they hang out in their multitudes in shopping cntres and outside MTR stations are like a swarm of “locusts”, and we all know how much HongKongers hate “locusts”.

  4. Regislea says:

    I used to go through IFC Mall quite regularly and was always being obstructed by these spotty herberts with their brochures. Why does the mall management allow this? I assume if I strolled into IFC with a guitar in hand and started busking, they would throw me out. So why allow those people in?

    Actually, I think I might know the answer.

  5. PropertyDeveloper says:

    At the risk of being supported by ex-“R”TP, I’d say that Hemlock and the government have both got it right: after each of the sets of discriminatory cooling measures, property prices have dropped a few per cent, which was the aim of the exercise.

    The balloon can’t be seen to be pricked by a government which is both highly unpopular and lacking in legitimacy; all they can do is take on more ballast.

  6. Bela says:

    You have to feel sorry for people who are so young and who have already given up the notion of having a productive and useful life.

    On the other hand, you could just have a good laugh.

  7. Stephen says:


    Might know the answer ?

    The “spotty herberts” will be pushing the residential abominations built by the Developer (usual suspects) who just so happens to own the Management Company, who manages the mall. So of course the Agents are allowed to congregate in packs and block the mall to sell their wares.

    The crash is coming so load up on cash as bargains (or sanity) are to be had …

  8. The Regulator says:

    The purpose of mainlanders buying flats in HK is to use them as vaults. So price doesn’t matter.

  9. Fred (the "R" TP) says:

    Not all property agents are bad ( although I would agree that the few good ones are the exceptions which prove the rule)

    I have on a couple of occasions dealt with a very responsible middle-aged lady who works for one of the big agencies, and who helped me buy a sensible property at a sensible price.

    On the other hand I never forget once meeting a youngster, barely out of her teens and nothing between her ears, who boasted that in the 1997 property boom she was making $200,000 per month in commissions. ( Said young lady – so I later learned – put all her money into property herself and then lost everything ) .

    PS : Confucius he say :
    “property bubble is like virginity – one prick all gone”

  10. Fred (the "R" TP) says:

    @ Joe Blow

    So your mother’s work at the HK Standard editorial desk should technically be called a blow-job ?

    Or if she doesn’t use a computer and actually writes her editorials by hand it’s a….

    (Shut up Fred !)

  11. Joe Blow says:

    @ Fred


    Little known fact: my mother is a first cousin of Sarah Beat-Me. Oh, those Eurasians !

  12. I can’t help feeling there’s something bizarre about the policy of driving down property prices by making property more expensive. Rather like John Tsang’s claim that “internal economic growth” is somehow responsible for Hong Kong’s decline in competitiveness – or perhaps the supposed growth he refers to is in the (paper) value of property? Lewis Carroll’s Red Queen would be right at home here.

    Still, driving out the estate agents can’t be bad. Hong Kong must be the only place in the world where some villages have 1 or 2 estate agencies but no general store.

  13. Fred the Proletarian says:

    @ Joe

    Sarah Beat-Me ?

    Apologies, but I don’t quite get that one. I must be too sleepy

    Time for bed. Delay no more !

  14. Worm Flu Patient Zero says:

    Both the 15% stamp duty and the Buyer’s Stamp Duty are jokes. No one can trade up for a start (why risk a punitive 15% tax if you can’t sell your existing home within 6 months?) and it hasn’t made the property market any cheaper for first time buyers. All the speculators left over a year ago when the BSD was introduced so it is not them who are pushing up prices. It’s the people left holding the housing stock who are either cashed-up or ultra-long-term investors – usually ah bahts. These grumpy old men can’t even be bothered to take calls from agents and they will only sell at a very attractive price. “What? What? How dare you call me? I’ve having Yam Cha etc.” (Think Mr Burns on speed). This has everything to do with this useless peg that has produced an unecessary boom, bust and forced austerity leading to ultra high prices now. And, for the record, I’m not an agent.

  15. gweiloeye says:

    here’s what they should have done – holy crap batman, they’re bigger than my HK apartment

  16. Gregory Moore says:

    Dear Hoffard,

    I wanted to thank you for your insights into the world of HK politics, that helped me revitalize a dying song…I appreciate that this is not relevant to the issue of stamp duty, but the old blogs are not open for comment…I read quite a few.
    Anyway, I just wanted to say thank you.



    Mr. Governor (I Don’t See Why C.Y. Is Chief At All) – Gregory Moore

    Intro 1:
    So you call yourself a candidate
    Your candour out-spoken, well wishing
    Since the camera and you met
    It ain’t looking for your reply

    Verse 1 :
    Campaigning on their coat-tails, they dragged you on in
    Strolling into office, freed from woes and the chase,
    Beijing reigns by vote or the tail, piggies tagged for the win
    Betting on all horses, to see their foes displaced
    No one’s ever on our side, til they count on us to swing it

    Chorus :
    Mister Governor,
    Can you hear us calling?
    Mister Governor,
    We do not believe you,
    So why don’t you just give it up,
    So why don’t you just give it up,
    Or else just fade away?

    Intro 2:
    So you call yourself a candidate
    You’re candid, well spoken, yet broken
    Hoping all your moves are set
    We ain’t looking for you to lie

    Verse 2 :
    Stump speeches say they all fail, cos we’re tired of the spin
    Courting all our bosses, who done paid us off to save face
    A trumpet preaches ‘all hail’, our new chief who begins
    Cutting all our losses, to make good on his place
    No one’s free to decide, til they count on us to believe it

    I don’t see why CY is chief at all
    I don’t see why CY is chief at all
    I don’t see why CY is chief at all

    So here’s hoping that our masters
    Know which spears turn power on its prey
    And here’s to downing hours no faster after
    Throwing the switch on fear and its sway

    Verse 3:
    Believing all your tall tales, they bragged to the wind
    Bearing all your crosses, when talking ’bout your case
    True freedom only prevails, when we’re saving our skin
    The thing ’bout the toss is, it’s always been laced
    No one’s sure what’s implied, til they count on us to leave it

    Chorus :
    Mister Governor,
    Can you hear us calling?
    Mister Governor,
    We do not believe you,
    So why don’t you just give it up,
    So why don’t you just give it up,
    Or else just fade away?

    Verse 4:
    Our issues all went on sale, cos they nagged and weighed-in
    Sitting on their asses, til the day they’re replaced
    Though we call it blackmail, backs turn when cops come-a-lookin’
    Waiting on the benches, for some way to win the race
    No one’s ever knows why, still they count on us to mean it

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