The South China Morning Post’s ‘Public Eye’ column sort of echoes my point that Hong Kong’s pro-democracy activists would accomplish a lot more for the city if they channeled their energy into protesting the damage poor governance does to people’s lives. Specifically, the systematic impoverishment of nearly everyone by property and related cartels…
When was the last time you saw [pro-dems] organise a mass protest against tycoons ripping off the people? Why aren’t they throwing bananas at officials to vent anger over tycoons demanding HK$2 million for 177 sq ft flats that buyers aren’t even allowed to see beforehand?
The SCMP has to turn the argument into a democrat-bashing exercise, leading to the obligatory claim that Occupy Central’s planned downtown sit-in will inflict immeasurable harm on the innocent public. (No traffic and maybe a day off – the horror!) But the main point is a valid one. The pan-dems’ usual response to this sort of charge seems to be that we need to get universal suffrage first: then solving cronyism and other wrongs will come naturally. But it has been nearly 30 years now.
The latest real-estate bubble is related to distant central banks’ money-printing, and former Chief Executive Donald Tsang’s determination to maximize developers’ profits by (among other things) curbing land supply. We can add ‘hot money’ from China and maybe Russia and elsewhere, as also seen in London, Vancouver and other cities. On top of that is the local investor psychology, which is cynically – but it has to be said easily – exploited by the property tycoons, helped by a silent and complicit bureaucracy. The drip-feeding of units onto the market and the high-pressure and scare-tactic sales practices wouldn’t work without the herd of zombies desperate to buy.
Big developers (with official blessing) have recently scrapped planned luxury projects in order to build much larger numbers of much tinier apartments. The way things are going, the only homes the middle class will have a hope of affording are ones that are literally too small to live in. Maybe, with an aging population and declining household size, the city will in future come to need a larger proportion of micro-flats in its housing stock. Or maybe we are on course for a situation where only the publicly housed poor and the top 10% of the rich will be allowed space to have kids. Our planning and other officials aren’t saying which.
In theory, the government could set much tighter controls on what developers produce; it could require that apartments be a minimum size and even a maximum price (with resale conditions, as with the Home Ownership Scheme). Instead, the Lands Department carries on as if it’s a private-sector, profit-maximizing real-estate auctioneer, while housing officials try in vain to cool things down with extra stamp duty. (Yes – one part of the government tries to make housing as expensive as possible, while another tries to make it cheaper.) If speculators were hording vital medicines or food during plague or famine, government would intervene, but the right to keep apartments empty while people live in cages is sacrosanct. Officials don’t even seem to have the curiosity to wonder what is ultimately better for the economy and indeed humanity: expensive or cheap housing? Instead (as in other world cities right now) the nearest thing to a coherent government-wide policy is to wring hands and wait for the bubble to burst.
It’s a long time coming, and lots of people are adamant that Hong Kong has years of rising property prices to come.
Even as it is, you have to wonder: who, exactly, is buying these apartments of 250 or 300 square feet at HK$3.5-4.5 million? Where have they come from? What are they expecting to happen? What do these people look like? It’s a genuine puzzle.
Strolling down my own street a few days ago, I saw the offerings in a real-estate agency window. An apartment in the same road is for sale. It is a small-to-medium size flat with a similarly sized (ie, quite large) balcony attached. In these respects, it is exactly the same size and layout as mine – at least before mine had certain, shall we say, modifications that transformed outdoor space into indoor in no uncertain manner. I bought my flat a bit over 20 years ago, before Soho and the Mid-Levels Escalator existed and the neighbourhood was a quiet old blue-collar quarter up the hill from Central. But even so… asking price in the agency window: 9.9 times what I paid for mine. As with all inexplicable phenomena, people try to come up with a rational explanation; in my district’s case, the latest is ‘renovation of the nearby Police Married Quarters as a creative hub’ (yeah, right, that’ll make a slum worth US$1.3 million).
Multiply that sort of thing citywide, and we surely have something that’s too absurd, too bizarre, to last and which cannot end happily. Meanwhile, a massive and unfair transfer of wealth from the poor to the rich carries on, and the nearest we have to sane people are demanding that the Chinese Communist Party allow opponents to run against it in elections.