Speech of the Hon KP Chan on the Motion on Helping People Acquire Homes (Synopsis)
- Housing price has surged to worrying heights on coincidental factors. It has risen by 47 percent in aggregate since 2008. The public is expecting the Government to take action and depress the overheated property prices. Although the Policy Address announces several key measures on housing policy, housing prices have climbed further thereafter.
- In my view, the property market is not only alarming but has also become an imminent threat to the SAR Government. If the threat was not defused timely, it would sink Hong Kong into another abyss. Critics say that the Chief Executive is too cautious to avoid taking any blame for pulling the plug and thus chooses long term measures to let the bubble burst itself. If we really let the bubble burst, it would result in a super storm. Spiral surge in housing prices would provoke panic buying, particularly from marginal buyers. Once hot money retreats or the economy goes bust, housing prices might plunder and many owners would suffer from negative equity.
- The post-1997 experience was an alarming lesson to all. We would hardly forget how negative equity mortgagors faced foreclosures and bankruptcy. Some even committed suicide. I ask the Chief Executive to take decisive measures, putting the bubble under control and allowing the property market to find its way to soft-landing. The Government should do its job and care not about who may take the blame.
- The Government should take steps to increase housing supply, to revive the Home Ownership Scheme and to curb speculations. The forecast of future demand in the Policy Address is debatable because it is based on annual take-up in private housing in past years. Historical figures were distorted by the sudden drop in demand in two financial crisis and SARS. They are not indicative of future demand. I ask the Government to prepare rolling five-year plans on land supply and ensure supply of domestic units is realistically meeting demand.
- “My Home Purchase Plan” is on the right track but it takes time to work. In my view, it is not a substitute for the Home Ownership Scheme in helping those who are eligible but could not afford private housing, particularly public housing tenants, to enjoy better living.
- I am pleased to learn that the Government is considering several measures to curb property speculation including higher stamp duty, moratorium on transfer of pre-sale flats and lower mortgage ratio. I am looking forward to their early implementations.