Sunday, 23 September 2012

Still Trying to Curb Housing Woes

The Hong Kong government is planning its long-term strategy on housing and members of the committee looking over this matter believe it's important to take into account mainlanders buying property here for price-control.

Many believe mainlanders flushed with cash are snapping up flats in the city, and in turn pushing up property prices that are surpassing 1997 levels.

However it's strange the government does not keep track exactly how many non locals are buying up homes.

Real estate agents gives estimates according to the spelling of the clients' names, but there are many more property transactions made by companies as well.

A member of the committee looking into long-term housing plans and is an adviser to Chief Executive Leung Chun-ying says there should be a study looking into the profile of mainland buyers.

"Times have changed. We cannot ignore their demand and have to consider how to accommodate their needs -- provided they are genuine needs," said Marco Wu Moon-hoi. "We have to do a survey to find out how many of them buy a home for self-use, how many for long-term investment and for speculation. We also need to take into account those who come regularly for short stays."

While this suggestion is good, would mainlanders comply with honest answers if they know their response will affect policy?

Another member of the panel is suggesting extra stamp duties or curbing mortgage loans to mainlanders buying a second property in Hong Kong.

Meanwhile a newly-elected lawmaker says anti-money-laundering vetting measures banks use should also be implemented in the property sector to curb speculation.

"If someone's got millions of dollars from bribes and he comes to buy an apartment, what's the difference from money laundering?" asked Kenneth Leung Kai-cheong.

"A bank definitely won't open an account for a customer who comes with a suitcase full of dollars notes. If banks have to comply, why does the property sector not have to?" asked Leung, who is also a tax specialist.

While all these suggestions mean well in trying to protect locals' interests, it does mar Hong Kong's reputation for having a free economy, though it may work has a short-term measure.

Leung's idea is the most strict and would be least appreciated by mainlanders, the bottom line is that there isn't enough housing and different kinds of housing available to young people.

The main problem is not the mortgage -- most young professionals can afford it -- it's the amount of money needed up front that's the main problem.

Who has enough for a 30 percent down payment as well as the stamp duty up front?

So perhaps the government should be figuring out ways to help first-time locals enter the housing market more easily.

Wouldn't that be easier to figure out than how to curb mainlanders snapping up property?

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