Even Olympic gold is not enough to buy a decent home in Hong Kong’s notorious property market
- The HK$7.5 million awarded to fencer Edgar Cheung for bringing home the city’s first gold in 25 years may seem like a princely sum
- But even modestly sized flats can go for much more in a city that has long struggled to increase its share of affordable housing
To put it into perspective, consider the lottery grand prize that a major developer recently offered to boost the city’s sluggish inoculation rate – a brand new single-bedroom flat measuring 449 sq ft, or 42 square metres, valued at HK$10.8 million.
As exorbitant as it may sound for such a small living space, the market price is quite reasonable, given the extremely convenient location of the property above a major MTR station.
Buyers snap up small flats in rush to get on Hong Kong’s property ladder
HK$7.5 million was the amount that Hong Kong fencing champion Edgar Cheung Ka-long received after winning the city’s first Olympic gold medal in 25 years. HK$5 million came from the government’s Athletes Incentive Awards scheme, while HK$2.5 million was a personal donation by Hong Kong Sports Institute head Lam Tai-fai, who promised years ago to help any future Olympic medallist become a “homeowner”.
But how much can you get for HK$2.5 million in today’s housing market? To be fair to Lam, he might not have anticipated back then the trajectory of Hong Kong’s runaway property prices.
Some would argue that it could at least help with the down payment, and they have a point, provided the buyer can afford to shell out tens of thousands of dollars a month for decades to pay off the mortgage.
“Not enough land” has long been the refrain to explain astronomical home prices, but a simple “why” remains the question. The inelastic need for housing has never changed in Hong Kong, even under the economic ravages of the Covid-19 pandemic.
Put the blame on rich mainlanders snapping up property in the city? Accuse developers of trying to maximise profits – although many of them don’t buy the land-shortage theory either? Lambast government inaction and red tape?
The list can go on, but there is one long-ignored, underlying issue: the lack of a comprehensive retirement scheme in this ageing city.
For many wage earners, owning a home provides a huge sense of security. “I don’t care even if I lose my job now,” is a common feeling when people finish paying off their mortgage.
Who is to blame for Hong Kong’s housing woes: developers or the government?
Retirees who are relatively cash-strapped but not poor enough to qualify for subsidised housing or welfare payments usually find the government’s badly managed Mandatory Pension Fund a far less reliable nest egg than a fully paid-off property, which offers the option of a lifelong reverse mortgage for a monthly income.
It’s public knowledge that only 7 per cent of Hong Kong’s land is used for housing. Authorities argue that it takes time to develop land to make it fit for home building.
Meanwhile Hong Kong ranks at the bottom compared with its neighbours in terms of living space per capita. At the last count in 2018, Shenzhen had a ratio of 300 sq ft, Singapore 270, Shanghai 260 and Tokyo 210. Hong Kong had only 161.
Xia Baolong, Beijing’s top official overseeing Hong Kong affairs, set a hard key performance indicator in July for the local government – subdivided flats should be gone by 2049 to mark the centenary of the founding of the People’s Republic of China.
But adding to the political complexity, competency in tackling this housing headache is a critical test for any potential aspirant for the city’s top job as the current administration’s five-year term will end by next June.
When even the worth of an Olympic gold medal falls well below the cash value of a small flat, the future leader of this city has a daunting task ahead.
As an in-depth series of reports published recently by the Post concluded, there is no time for finger pointing but it is high time for a whole, workable basket of measures besides boosting land supply to put an end to the notoriety of Hong Kong’s housing shortage.
