Hong Kong Chief Executive Makes Housing Promise
News Posted On: 25 January 2013
Hong Kong’s Chief Executive, CY Leung, has promised to prioritise tackling Hong Kong’s housing issues, in a policy speech to the Legislative Council. In the speech, his first as Chief Executive, Mr. Leung promised that more land would be set aside for housing, and that targets would be set for numbers of new public housing units. He also promised to address Hong Kong’s pollution problems and pledged to work to sustain Hong Kong’s economic growth.
Mr. Leung’s speech may be seen as an attempt to legitimise his authority in the eyes of some of the thousands of people who marched in Hong Kong on January 1, calling for him to step down. Organisers claimed that more than 130,000 protesters took part, though police put the number at 26,000. Protesters, some with young children in buggies, others waving the British colonial-era flag or political cartoons of Mr. Leung, marched through city streets and demanded that Mr. Leung step down. The two chief concerns were that the protesters mistrusted Mr. Leung after it was revealed that he had failed to declare illegal buildings at his own house, and that they could not remove him or replace him democratically. Mr Leung was selected by a committee in Beijing and activists are demanding suffrage for Hong Kong people.
A more immediate issue foe many Hong Kong residents is housing. Hong Kong has seen a property price boom in recent years, coupled with stagnant or falling real wages and a serious supply problem. As a result many Hong Kong families are forced into ‘cubicle apartments’ and the housing ladder is inaccessible to large swathes of Hong Kong’s young people.
Mr. Leung proposed putting through measures including rezoning land so it can be used for housing, to cope with the supply problem, and said he hoped to see a target of 100,000 new housing units met in the five years after 2018, in addition to the 75,000 planned for that time.
Mr. Leung also announced measures to restrict ‘speculative activities,’ saying that ‘as long as the housing shortage persists, we have no alternative but to restrict external demand.’ Hong Kong already levies a 15% stamp duty on foreign purchasers of its property, the same as nearby rival Singapore, and a raft of other measures to combat speculation were announced in October 2012 by Financial Secretary John Tsang. These included an increase in stamp duty on sales soon after purchase, curbs on second mortgages and duties on non-permanent residents. However, the heat of the Hong Kong market attracts investors just as Singapore’s does and Mr. Leung will be hard pressed to convince his audience that his measures will solve the problems of a city where ‘cage homes,’ wire mesh shacks stacked on top of one another, are becoming an increasingly common sight.
Mr. Leung also demonstrated his loyalty to the Mainland and drew attention to the ‘complementary’ nature of the relationship between Hong Kong and neighbouring Guangdong Province, without a mention of the democracy Hong Kong has been promised by 2017 at the latest.
Hong Kong’s overheated housing market has drawn investors from across the globe, but grassroots resentment of foreign money and mainland Chinese immigration could create increasing instability in the area. Additionally, Daiwa analyst Kevin Lai told Reuters on Wednesday that ‘many question the government’s ability to raise land supply… and think that the housing shortage problem cannot be solved until 2018.’ Prices are expected to continue to rise over that period.
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Written by Les Calvert
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