Comments on: Hastening the inevitable

By: Churchill fan

Churchill fan — Tue, 22 Jan 2013 13:40:09 +0000

In 1909 a dangerous subversive explained the issue thus. “Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived … the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.” Churchill in the Guardian. Tax landlords.

By: Private Beach

Private Beach — Tue, 22 Jan 2013 13:31:17 +0000

For most of the 53% who own their own home, it is the largest and quite often the only major investment they possess. Any government stupid enough to be seen to engineer a major slump in the market (however sorely needed by those not already on the ladder) would probably face a tsunami of protest that would make Article 23 seem like a ripple in the bath by comparison. People don’t like to see their life savings evaporate. On the other hand, current price levels are clearly unsustainable and eventually external forces (a new financial crisis or SARS-like epidemic) will force the drop anyway. In the meantime all the government can really do is fiddle with the system to try to stop prices rising even further.

By: Chimp

Chimp — Mon, 21 Jan 2013 13:48:37 +0000

It’s called “the art of the possible” for a reason. Not a bad result from CY… cautiously optimistic, on my part.

By: Real Scot Player

Real Scot Player — Mon, 21 Jan 2013 12:12:16 +0000

Just a sidenote on the two photos. Not actually contradictory. The second one is a reminder that OUTSIDE parks large mutts should be on leads. The first one encourages canines INSIDE same to shit and pee off the leads

By: Jason90

Jason90 — Mon, 21 Jan 2013 08:47:15 +0000

Easy to say at the moment if a residential apartment is unoccupied – minimal electricity usage. Unofficial figure is 4% of residential.
This will change if owners start heating, cooling and lighting empty apartments to avoid tax.
Then we can switch to gas usage – we will be able to spot the empty apartments by the smoke and flames….

By: Jeff

Jeff — Mon, 21 Jan 2013 07:52:18 +0000

Hong kong housing. Where to start. A few random thoughts:

First off, in Hong Kong today, if your’re middle class, you’re screwed. Be wealthy, or be poor. Do not be in between. The policy address made this quite clear. Thanks for your taxes, now fuck off. Forget about affordable housing, and forget about affordable English schools too.

The Donald dropped the ball in 2005, and allowed housing prices to rise for over 7 years without any controls whatever. The entire city pays for this every day. Incredible neglect of duty. What an retarded ass he is.

We now have the perfect ‘I’m all right jack’ divided middle class. Owners, and renters, whose interests are completely at odds. This is anything but ‘harmonious’.

Owners and buyers here, again thanks to the Donald, now routinely expect 10 percent and more rises in value every year. This is absurd.

I don’t resent those who were wise and bought in the early 2000′s, and live in their flats. Good on them. It is the speculators with empty flats, those who own 2 or more flats, and charge twice their mortgage in rent, and recent buyers who continue to inflate prices should be shot on sight.

Speaking of charging twice your mortgage in rent: Good on you, but it should be illegal. Why should I pay your reasonable mortgage and also put additional money in your pocket every month, while my shop fails, or my flat does not get painted by you?

Where was any mention of controls in the policy speech? Can’t have that I guess, even if this is not Hong Kong 1950 any more and the city desperately needs rent controls. If any city in the world has all of the pressures and forces on housing prices that call for rent controls, it is Hong Kong. Heritage Foundation Nazis wouldn’t tolerate it, therefore let’s not do it. Good one.

As for those who have bought the last two years, and speculators, I drool at the prospect of watching them writhe in negative equity agony. And if they expect to receive government aid for their plight, by asking for my taxes? Fuck off very much, I think not.

We need to tax hoarded land, not flats, and we need to tax property over the life of the building, not with a one time premium. This of course was not addressed by CY, making his address in my view, and specifically his housing strategy, a complete failure.

I finally know the patterns. Next time I’ll be ready, when the fed wakes up and raises rates 2 points, and the moron who bought last month is working at McDonalds nights, I’ll be there, to buy his flat at half what he paid, its true worth. Hee Hee, I can’t wait.

By: Aghast

Aghast — Mon, 21 Jan 2013 07:14:20 +0000

Some funny figures flying around here.

In fact less than 30% of population are in public rental housing.

53% of HKers live in owner-occupied flats. That’s a higher rate of urban ownership than UK, and considerably more than France and Germany. It’s a bit less than Korea and Denmark. Nothing remarkable.

It’s hardly a ‘cozy club’ if more than half the population are in on it.

By: Real Tax Payer

Real Tax Payer — Mon, 21 Jan 2013 07:11:50 +0000

Talking of Laws, I think Newton got it right centuries ago:

Newtons’s 1st Law : every property remains in its state of vacancy or uniform occupation unless acted on by an external force (whether market force or new govt tax)

Newton’s 2nd Law: F = M x A where F = the external force, M = the size of the property ( gross, not net value) and A = the acceleration of the change

Newton’s 3rd Law : Action and Reaction are equal and opposite *

(*Also known as CY’s 5th Law and Sod’s Law : “whatever I try to do to make HK a better place to live in for the 99.9% of us who are not tycoons, the pro-dems, people power, emily lau and long hair try their damnest to do the opposite”)

By: PCC

PCC — Mon, 21 Jan 2013 05:45:37 +0000

Stephen,

In describing the residential property market as a “cozy club” between developers and government bureaucrats, you left out a critical third member of the Iron Triangle: the banks.

By: Property Developer

Property Developer — Mon, 21 Jan 2013 05:19:08 +0000

The recent tax on foreigners and on quick resale, although discriminatory, proved finely judged, as it made the market drop slightly for a couple of months. CY should presumably produce more of the same, since now is not the time for innovation or experimentation.

Remember, CY (et al) already caused one 70% drop: he can’t be seen to produce another major slump. So, however Hemlock finesses it and however much the market is over-priced (it should be about half its present level, in my view), he can’t, by word or deed, take any explicit radical measures. All the more so, given the Chinese preference for action over words and his considerable unpopularity.

Of course he could secretly tunnel under the property sector, then remove the props one by one, provided he had a lightning quick exit strategy.