address the housing crisis - cool the anger?



Posted by Ed 25 days ago
How Carrie Lam can cool the anger in Hong Kong – address the housing crisis
The government’s rush to push through the extradition bill was in stark contrast to its lack of progress on the biggest issue facing Hong Kong – unaffordable housing
Directly addressing the most pressing issue facing Hong Kong may be the government’s only way to pacify an outraged public. Public unrest reached boiling point with the government’s mishandling of the extradition bill, which has sparked massive protests.
While the bill may have been the straw that broke the camel’s back, the government’s handling of Hong Kong’s housing problem has been a simmering public issue for years. 


Ed 25 days ago
Neither violence, nor Beijing, can fix Hong Kong’s housing shortage and lack of a social safety net
Many Hongkongers have lost out due to economic changes, and many have deep-seated distrust of mainland China
The Hong Kong government must first address their financial insecurities, before it can work on fostering a sense of Chinese identity 

Ed 25 days ago
June 10:  Lacklustre Hong Kong new home sales could be boosted by US Federal Reserve interest rate cut
  • Sales of new homes could rise by about 4 per cent, Midland Realty’s Sammy Po says
  • Definite positive for homeowners, as mortgage costs will drop, mReferral Mortgage Brokerage Services’ Sharmaine Lau says
US Federal Reserve cuts interest rates by quarter point and signals potential for more
  • Central bankers vote to lower target range for benchmark rate to 2 per cent to 2.25 per cent
  • Reduction is first since 2008 financial crisis, and may be followed by another cut this year to insulate US economic expansion from slowing global growth
Policymakers appeared open to another cut as early as September when they next convene, while sticking with wording in their statement that preserves their options.
A worry for policymakers is that a decade of easy money leaves them short of ammunition for fighting a serious downturn. That likely means governments will face demands to do more if economies keep struggling. 
AX Prediction:  Expect more of this: 

Ed 21 days ago
Picture this:
You are 23 ... just finished university... are on a salary of 30k per month...   you've been living crammed into a 400sf flat in Mongkok with your immediate family and probably your grandparents. 
You have a girlfriend...  you have ambitions to own your own flat... or at least rent a decent sized apartment so you can enjoy some privacy....
There's a slight problem standing between you and your dream.... 
Do you and your girlfriend slip on black t-shirts...  and masks ... and join the protests? 

Ed 19 days ago
How Hong Kong can put an end to protest chaos – it’s about the economy, so fix the deep divide
Hong Kong is a free market on steroids that serves the rich. As discontent over an unjust system boils over, it’s time to introduce easy policy fixes
Restoring public order in Hong Kong will not happen through heavy-handed policing. That will only make the situation worse. And it will not come from the government abandoning its extradition bill or calling for calm. Even Chief Executive Carrie Lam Cheng Yuet-ngor stepping down would change almost nothing.
The only way to restore order is through a radical change in Hong Kong’s economic policies. After decades of doing almost nothing, and letting the free market rule, it is time for the Hong Kong government to do what it is there for; to govern in the interests of the majority.
The discontent among the Hong Kong people is deeply rooted and has been growing for many years. It is not a knee-jerk reaction to recent policy decisions or a consequence of the failed 2014 umbrella movement. It is a legacy of colonial rule and the economic system that the British implanted.

Ed 18 days ago
I had the pleasure of sharing the ski lift in Queenstown with a chap from Beijing.... and asked him what he thought of the HK protests...  and specifically, did he think that the people on the mainland might observe what is going on in Hong Kong and themselves take to the streets to oppose the government...
His take was:
- the people on the mainland like the Party because unlike in the past when only the corrupt Party members were rich, now everyone can get rich!   They will not protest....
- the people of Hong Kong missed the boat and invested only in their property market instead of high tech companies such as 'the iphone' etc.... 
- Hong Kong doesn't matter - China has plenty of important cities now
As the axiom goes...  the people will accept any form of government... so long as they deliver prosperity....
I'll amend that ... to include false prosperity ... including prosperity based on building ghost cities...  and taking on epic amounts of debt...
I reckon this fellow --- and a billion others... are in for a rather nasty surprise at some point

Ed 13 days ago
Hong Kong leader Carrie Lam fights back tears as she warns protesters they are pushing city ‘into an abyss’
Hong Kong leader Carrie Lam Cheng Yuet-ngor has warned protesters they were pushing the city “into an abyss” by attacking its institutions, in what she called attempts to “destroy the rule of law”. 
She's between a rock and a hard place...
On one hand the protesters clearly are not keen on being ruled by the CPC...  but opposing that is going to be about as successful as Hawaii trying to succeed from the United States...  
But given the victory over the extradition law has not calmed the waters one bit... in fact we now have a full force T10 Hurricane hitting .... 
One is forced to look beyond the issues with the mainland government when attempting to find the cause of the extreme and widespread dissatisfaction with the overall state of affairs in Hong Kong.
It is difficult not to conclude that the enormous disparity in wealth that has been exacerbated through policies (or lack of policies) since the GFC.
Billions of dollars have poured into Hong Kong from China since 2008 ... driving up prices of everything....   but most notably the prices of homes have gone through the roof. 
In inflation adjusted terms the price of a home in Hong Kong far exceeds the price at the time of the 1998 bubble.
When I see video of these young people,  I do not see hooligans...  I see students and young adults who are frustrated with the reality of not being able to afford a decent place to live. 
Surely Carrie Lam is aware of this frustration and the reasons for it....  but the fact that she has not made any attempt to address the economic difficulties that the majority of Hong Kong people are facing indicates that she also knows that there is nothing that can be done.
She cannot introduce policies that bring housing down to more affordable levels without crashing the market and risking the financial system.
Perhaps the HK government could/should have taken action to stop mainland money pouring into Hong Kong like pumping jet fuel onto a fire... and blasting property prices into the stratosphere ....  but the time for that is long past.
Now we face the consequences of what is a very sad .. and troubling ... crisis ... that appears to have no solution.

Ed 12 days ago
Peter Woo, the largest shareholder and former chairman of developer Wheelock & Co., called on protesters to ease off after they notched a victory by blocking the government’s extradition bill.
 “It’s time to think deeply,” Woo wrote. “Going against the extradition bill was the ‘big tree’ of this movement. This one and only big appeal has already been accepted by the government, so this tree has fallen.” Some people are using the issue to “purposely stir up trouble,” he added.
The Real Estate Developers Association of Hong Kong issued a statement Aug. 8 condemning violence and calling for peace. Seventeen members co-signed, including Woo’s Wheelock, as well as Sun Hung Kai, owned by Hong Kong’s wealthiest clan, the Kwoks, and Li Ka-Shing’s Hutchison Properties. Another appeal published in Chinese-language papers was issued on Aug. 10, with co-signers including Kwok family members as well as billionaire Henry Cheng of New World Development. 
Maybe the extradition law was just the straw?

Ed 12 days ago
Some development tycoons say Hong Kong’s population has reason for discontent.
Lan Kwai Fong Group head Allan Zeman said on Bloomberg TV Monday that urgent solutions are needed to address the territory’s housing crisis.
“A lot of these people, I don’t blame them for marching because they don’t have hope,” said Zeman, whose holdings spanning Hong Kong, mainland China and Thailand include the city’s California tower.
“They live with their parents, they don’t see a future for themselves.”

Ed 12 days ago
Refuse Hong Kong’s protesters everything, and they will fight to the bitter end

Ed 12 days ago

 The Masses Increasingly Support the Protesters

She was frequently interrupted and yelled at by reporters during a 30-minute grilling.

“Mrs Lam, many residents are asking when you will die!” one reporter shouted as she was leaving.

A poll from August 1 to 6 by the Hong Kong Public Opinion Research Institute found that Lam’s support rating had dropped to 27.9 points out of 100, a new low after it hit 30.1 points last month.

There was no sympathy for Hong Kong’s embattled leader among hundreds of medical professionals who staged sit-ins at 13 public hospitals on Tuesday to condemn the use of force by police. 

Ed 11 days ago
As protests continue to roil Hong Kong, a widely followed economist has an idea about how to ease tensions: China, he said, needs to take power away from the city’s tycoons and fix its property market.

The east Asian financial hub has been rocked by civil unrest in recent months with operations of Hong Kong International Airport severely disrupted this week due to a sit-in by protesters.
The ongoing demonstrations in the city started as peaceful rallies against a single proposed law but have snowballed into a wider pro-democracy movement, with some even demanding full autonomy from Beijing and occasional outbreaks of violence.

Social discontent with stratospheric housing prices is playing a major part in the unrest, Andy Xie, an independent economist, told CNBC’s “Squawk Box” on Wednesday.
But wages have largely stagnated in the same period, so “it’s very difficult to see how young people can feel hope. They know they’ll never be able to afford a place, so they cannot start a family. How can they get ahead in life? Desperation, and really a deep sense of unhappiness, is driving this unrest,” said Xie.
It's a bit of a stretch to blame the property companies....   how about blaming the central banks for pumping out trillions of dollars since 2008....  and pushing interest rates to record lows....   causing asset prices to hyperinflate.... 
This phenomenon has impacted many major cities --- but Hong Kong is the most extreme example....
What are the developers supposed to do --- sell apartments at a loss? 

Ed 8 days ago
What remains unclear, however, is whether the embattled Chief Executive will unveil a bold vision to tackle the “grey rhino” risks long associated with Hong Kong – sky-high property prices, worsening inequality, lack of social mobility for youth, and woefully underfunded social security – which have underpinned waves of anti-government demonstrations over the past two decades.
Calls for such bold measures are nothing new and should sound all too familiar to the people in Hong Kong.
In the 22 years since Hong Kong was handed back to Chinese rule in 1997, every time a crisis has broken out – the crisis of governance in 2003, the national education controversy in 2012, the Occupy Movement in 2014 – the authorities in Hong Kong and Beijing have chosen to ignore protesters’ political aspirations and have instead made solemn vows to tackle the deep-rooted economic woes, such as housing, which helped foment the discontent.
But on each occasion, as soon as the immediate crisis has calmed, these solemn vows have been immediately forgotten and things go back to normal – until, of course, the next crisis comes along.
It is a wonder the current crisis did not happen sooner.
From half a million protesters in 2003 to about 2 million in June, the waves of protests may have been triggered by political events but the Hong Kong people’s widespread dismay over worsening economic inequality, and unaffordable housing in particular, is also too obvious. 
How do you bring property prices down to a level where the average Hong Konger can afford a decent sized apartment.... without crashing the property market.... 

Ed 8 days ago
Hong Kong’s small flats ‘to get even smaller’, hitting quality of life
Meeting government housebuilding targets will require a squeeze on the size of new homes, report says, with serious consequences for city residents
If you find the average flat in Hong Kong too small, get ready to feel even more cramped, as sizes are forecast to shrink further in the coming five years, lowering residents’ quality of life.
That prediction came on Tuesday from the Our Hong Kong Foundation, a think tank founded by former chief executive Tung Chee-hwa, which also pointed out the government had overlooked two plots of land in the New Territories which could yield as many as 30,000 public rental flats to help ease the city’s housing shortage.
The average size of private flats completed between 2018 and 2022 would be 681 sq ft, equivalent to five standard parking spaces – an 18 per cent slide from the average of 833 sq ft in the past decade. 

Ed 5 days ago
This sums things up rather succinctly:
Billy Tung, a 28-year-old accountant, lives on Hong Kong Island in a tiny room in an apartment that’s been partitioned to accommodate six renters.
His bosses expect him to work most Saturdays and Sundays, but recently he’s had another weekend activity: taking to the streets to join thousands of other Hong Kongers in protests.
Like many Hong Kongers of his generation, Tung finds it hard to save even while he carefully watches his spending on a day-to-day basis, which is why he’s been toying with the idea of moving to Taiwan. 
Hong Kong has long been a land of contrasts in which glittering skyscrapers and chauffeur-driven Rolls-Royces are juxtaposed with decrepit apartment blocks and “cardboard grannies” picking through rubbish in search of recyclables. An aspiration for a share of those riches has been replaced by a growing sense of hopelessness. 
Ho-Fung Hung, a professor in political economics who’s a China expert at Johns Hopkins University, says the economic malaise, combined with a perceived loss of cultural identity and frustration at a lack of political voice, is driving young people into the streets.
“Participants come from all economic backgrounds,” says Hung. “What binds them together is a shared sense that there is no future for them in Hong Kong. Compared with their parents, they will live a lower quality of life.” 

Ed 5 days ago
Sze Chan, a 20-year-old who designs menus for restaurants on a freelance basis, has been on the front lines of the protests in recent weeks as police fired tear gas.
“Young people in Hong Kong are very confused about the future,” she says. “Unless you get support from your family, it’s impossible for one to live.
And with so little left every month, you can’t even have a decent wedding banquet when you marry, let alone buy a home.”
BOTTOM LINE - While politics sparked the protests, sky-high living costs and diminishing career opportunities have fired up young Hong Kongers. 

Ed 4 days ago
Anger over high housing prices fuels many protesters, and taking on wealthy landlords might appease them
“President Xi Jinping has said houses are for living in, not for speculation”

Ed 3 days ago
In Hong Kong, less than 16 per cent of the population – or around 1.2 million people – live in subsidised “home ownership” flats.
In Singapore, over 80 per cent, or about 4.5 million people, live in flats built by the public housing authority.
Singapore’s Housing and Development Board builds and sells affordable flats on 99-year leases. These flats can later be sold in the resale market, just like private housing. Thus, Singaporeans are more contented than Hongkongers.
In Singapore, a young couple can buy a newly built flat of about 400 sq ft for less than HK$1.5 million (US$191,000).
In Hong Kong, a flat roughly a quarter of the size (121 sq ft) in a 29-year-old publicly owned building in Tai Po sold for around HK$2 million in January last year. 
Another article blaming the developers...  this is the fault of the government and it goes back to the colonial administration... 
For things to come into line with say Singapore means property prices must be chopped down by well over half!
This would leave many thousands of property owners so far underwater that their heads would explode under the pressure...
But before that happened they would chuck the keys onto the street and tell HSBC to take their mortgages and stuff them...
Simplistic solutions such as blaming developers and pushing for a system similar to Singapore ...  sound wonderful....
But when reality is applied.... they are found severely wanting.
Carrie Lam obviously knows this.... that's why she puts forward no solutions ...  it would seem there are none...
To the barricades again this weekend ....
I was just looking at hotel rates and noticed that a hotel on Robinson Rd that normally goes for around $1200 per night .... was priced at just over $300 for August and September.
This is beginning to seriously hurt. 

Ed 2 days ago
Hong Kong’s Broken Homes Policy Fails the Young
It's long past time for the government to tackle a housing crisis that's a source of social division and discontent.
Hong Kong’s summer of protest has proved the truth of former Financial Secretary Antony Leung’s warning that when young people see no hope of moving forward with their lives, they take to the streets.
The city’s housing crisis has kept the younger generation from putting down roots and becoming financially stable. In her next policy address, Chief Executive Carrie Lam should identify realistic and timely solutions to increase the supply of homes.
The problem of inadequate supply driving housing prices higher was recognized as far back as 1997, when Hong Kong’s first post-handover Chief Executive, Tung Chee-hwa, proposed building 85,000 apartments a year with a target of reaching 70% home ownership within a decade.
His idea ran into opposition from vested interests and was derailed in any case by the Asian financial crisis. The plunge in home prices triggered by the crisis obviated the need for policies to cool the market. 

Ed 2 days ago

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