G'day all - dear Ramsey, it is true that HK govt land sale [or is it really a lease like the old days?] is a major revenue. However, there are many facets to it. 1st, most [if not all] of the new land for sale is reclaim land. I guess one can see it as a form of taxation, but this is more like a consumption tax, if one has to put it in that category. It is true that the land is the foundation of housing units; however, the superlative civil engineering is not to be underestimated. The building tycoons would proceed to tear down a building of 20 years old even if they had to buy out the existing flat owners if they could build twice as many units. A few years ago, I read about the coco cola bottling plant in HK, it had some amazing lifts going straight up.
While you are right that RE is a major asset base for HK, it doesn't mean it wasn't overvalued. There were indeed HK residents holding more than one unit [for personal unit] for rental as well as speculation purposes. The last time I was there, the unit next to my relative was vacant [apparently, the owner has emigrated to Canada.] Additionally, there was a lot of money parked in HK. One rumor is some corrupted officials from the mainland have used HK to dash their loot [this probably was more prevalent in the mid 90s before the takeover.] The upshot is that while there is still a huge demand for housing - especially by those who can't afford it, even now - there was also a speculative bubble. The govt units you mentioned are likely public housing conversion. This will only help the existing renters who have been in effect living in a rent-control environment.
best, Bosco |
