Viewpoint C｜Does the government want property prices to rise or fall?
Recently, the government’s attitude towards housing issues has been somewhat contradictory, leaving the industry confused.
The government insists on refusing to fully withdraw the hot spots, fearing that this will allow too much capital not needed for owner-occupancy to flow into the real estate market, causing property prices to rise again; this is not in line with the government’s goal of making housing affordable for the new generation of Hong Kong people. Vision. When the supply of housing is not yet abundant, the government must set certain thresholds to prevent investment and speculative funds from entering the market, lest they deprive users of the opportunity to enter the market.
This argument makes sense, and I believe that many Hong Kong people who have not yet purchased a home will support the government’s approach. They have been waiting for property prices to fall back to a level they can afford; if property prices continue to decline at the current rate, this scenario should be around the corner.
The government’s tough measures have been launched for more than ten years with the aim of curbing property prices. However, property prices continued to rise even after the tough measures were launched, and did not fall back until 2022 due to factors such as the epidemic and economic slowdown. If the government really wants to see property prices fall back to a level that most people can afford, it should make good use of the objective environment to further push property prices down to a level that most Hong Kong people can afford.
If this is the case, the fall in land prices can also be seen as a signal that the market expects property prices to fall further, which the government should be happy to hear. However, the government regards the poor response to the land sales results as a message that is easily misinterpreted by the market and may be detrimental to the market. In order to avoid this situation, the government has even suspended the launch of residential and commercial land to reduce the pressure on land prices from further downward pressure.
The government’s decision to make this choice may be understood as the government does not want to sell land at a low price to avoid damaging the government’s fiscal revenue. However, since the government has proposed the goal of allowing the next generation of Hong Kong to buy homes and live in peace, the government should be mentally prepared. When property prices fall, land prices will also fall. When the land price environment changes, the government will naturally no longer be able to rely on it. Income from land sales is an important source of government revenue. The government should prepare for this situation as early as possible.
The reality is that the government is not ready for such a day to come. On the one hand, it is not withdrawing funds to prevent funds from flowing into the property market again; on the other hand, it has suspended land sales for fear of further decline in land prices. The two are obviously contradictory. So, does the government want property prices to rise or fall? You can’t just want property prices to fall just to help households buy properties; and want to maintain property income and want property prices to rise. In this way, the effects of government policies will cancel each other out when ghosts are driven in and out at the same time. Not only is energy wasted, but it will also confuse the public and leave society at a loss as to what to do.
Things have to be prioritized. The government should make a judgment. Should we take the opportunity to push down property prices to help people buy homes? Or should property prices be stabilized so that the economy can transition smoothly? Choosing the former is risky, because the policy to help people buy homes may only be halfway through. The government can no longer withstand the pressure of economic downturn and has to change its original intention. It is better to stabilize property prices first, and then turn around and attack with all its strength after the economy is out of crisis. To curb the property market and help people buy homes.
2024-01-15 20:30:25
#government #property #prices #rise #fall #am730
