Henderson Land launches the most expensive residential development in Kowloon City, it says here. The apartments on sale range in size from 286 to 433 square feet. Agoraphobics who fear getting lost in such expanses will be relieved to learn that these are the gross sizes, which include bits of communally owned corridors, stairwells and lobbies. The actual living spaces in these units are a far cozier 182 to 282 square feet. The prices are HK$3.95-6.28 million.
The ‘per square foot’ scam, which allowed developers to lie about the size of homes, is finally coming to an end, and Hong Kong must adjust to a new method of pricing flats. Thus, the average price per square foot in this Midget Mansions project would formerly have been advertised as HK$14,079, but is now HK$22,032.
Henderson Land’s boss is 84-year-old Dr the Hon Lee Shau-kee, whose number-one son procured three baby boys from a surrogate mother to ensure the continuation of his virtuous line, and presumably sweep the old man’s grave for decades to come so his ghost is at peace and doesn’t come back to trouble us. Another of Lee’s claims to fame was the infamous apartment on the ‘88th floor’ of a 46-storey tower.
Now, as if the old guy isn’t pushing HK$22,000-psf shoeboxes in Kowloon City, he pops up on the front pages proposing HK$1 million homes on agricultural land he has been sitting on for decades in the New Territories. (He calls them 300-square-foot; maybe, like Germans and Italians of his age who still think in Deutschmarks and Lira, he is thinking gross area – but who knows?) The Standard calls him a ‘feisty billionaire’, while the less charitable might prefer ‘wily old goat’. Either way, it is hard to believe that his suggestion springs solely or primarily from concerns for the well-being of the people of Hong Kong, let alone a specific urge to make homes affordable. (That said, it must be obvious to these tycoons that squeezing more and more local people out of the property market is hardly a sustainable model, and at some stage they would need to focus on sales volume rather than margins.)
Lee is presumably hoping to unlock the value of this old farmland at long last out of self-interest. As a supporter of failed CE candidate Henry Tang, he also probably relishes putting CY Leung in an awkward spot. But that doesn’t mean million-dollar homes are a bad idea. There are unanswered questions. How can the low price be reconciled with current construction costs, recently pushed up by, among other things, former Chief Executive Donald Tsang’s infrastructure mega-projects? What about the cost of roads, sewerage and other civic amenities?
Whatever his motives, Lee is doing everyone a favour by highlighting the glaring contradiction underlying Hong Kong’s interminable housing problem. One the one hand, government wants homes to be affordable; on the other hand, government insists on slapping a huge de-facto sales tax on homes. If (as the academic in the article suggests) purchasers didn’t have to pay the land premium until they sold these cheap homes, the concept is basically a sort of Home Ownership Scheme. In theory, all residential land in the city could be treated this way. Such a system (pay when you sell) would bear a slight resemblance to a capital gains tax on real estate. That’s hardly the most elegant alternative to the high land-price policy, but it’s still a more radical idea than anyone else has come up with lately. Even if it does come from the boss of Henderson Land.