What does Hong Kong’s defiantly buoyant property market tell us – and Beijing?
- Recently passed bill ensuring only ‘patriots’ govern Hong Kong effectively signals an end to big business’ influence in shaping government policies
- But that does not mean a quick fix for the city’s many deep-rooted livelihood issues, in particular Hong Kong’s notorious housing problem
“I do hope the developers and big landlords in town realise clearly enough that the good old days for them are gone,” a former official recently told me.
He was sharing his latest observations about Hong Kong’s political scene, and referring to the dwindling influence of this elite group.
This effectively signals an end to big business’ influence in shaping government policies, even in Beijing’s choice of the city’s leaders. The nation’s and Hong Kong’s interests overall will now prevail.
In that context, some people are half-jokingly talking about the possibility of Beijing introducing “land reform with Hong Kong characteristics”. Such a drive in mainland China during the 1950s saw land being taken away from owners and redistributed to the poor.
The political time bomb ticking away here is that 24 years after Hong Kong’s return to Chinese sovereignty, the city’s wealth gap has never been bigger, and affordable housing has never been more of a “mission impossible”.
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The latest data from the government’s Rating and Valuation Department shows home prices rallying in the four months until April, with no sign that the upward trajectory will reverse any time soon.
Credit goes to the tycoons behind the offer for doing their part to help boost the sluggish vaccination drive, but the grand prize itself can be seen as an indictment of the housing situation: a one-bedroom flat measuring just 449 sq ft with a market price of HK$10.8 million (US$1.4 million).
Meanwhile, the average waiting time for public housing for low-income groups has increased to nearly six years, which is also a new record.
Who is to blame, the developers or the government, or both? Beijing is troubled, too.
Entrenched bureaucracy is another issue, with the go-ahead for major housing projects required from multiple government agencies. From approval by the Lands Department and Planning Department to the input of the Town Planning Board in terms of land use and required consultation with stakeholders, plus the involvement of half a dozen other departments, the process is a minefield of red tape.
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Are the developers at the mercy of regulators or is the government at the mercy of the developers to ensure an adequate supply of homes? Finger-pointing won’t help when Hong Kong’s “housing reform” is inevitable.
Developers do have less political say now, but they still have an important role to play in tackling the housing shortage, although with a new playbook and under greater public scrutiny. For the city’s leaders, now and in the future, providing affordable housing remains a major KPI set by Beijing.
Whether that leads to a soft landing or free fall of home prices depends on political will and wisdom from both sides.
