According to Bank Negara Malaysia, the average median property price versus household income ratio for Malaysia is at 5.2; severely unaffordable. In Hong Kong, it’s quite close to 20. Here’s that earlier article. There are no category for such a number. If there’s a ceiling, Hong Kong’s property price affordability is higher than the ceiling. The government of Hong Kong continues to try and make homes affordable to the citizens. Of course, one of the ways to make it affordable is to build smaller units but this is not really healthy in the long run. How small is small? This is an earlier article. Well, even a major owner of a developer in Hong Kong says that it’s not healthy to stay in these small units for long term. Here’s that earlier article. The smallest units should only be between 300-400 sq ft and not half of this. There’s now a potential solution even if it requires a bit of travelling and perhaps earliest would be a few years later.
Hong Kong’s MTR Corporation runs the city’s railway network and acts as a property developer. (This is the most successful operator that I know which is PROFITABLE despite running a public transportation business. Reason? It’s also a very good developer and it owns many office buildings along the MTR lines. The rental more than covers the losses from just the usual ticket sales) the MRT Corporation has started talks with its state-run counterpart in China to explore some areas for it to build a commuter town. In brief, it’s looking at Nansha and Foshan to build a new town for Hong Kongers who could not afford homes in Hong Kong. Many may think this is a clever plan because it will help both Hong Kong and the areas which are developed for this purpose. This commuter town as the name suggests will be linked by railways. Here’s the article in StraitsTimes.
The MTR Corporation says that the new community would have a “Hong Kong ambience.” It is aimed at retirees and young people and will be equipped with commercial and health care facilities and located near the high-speed rail station. Moving on, not everyone thinks of it as a positive thing. One pro-democracy lawmaker Claudia Mo told Agence France-Presse (AFP), “It’s just yet another attempt to ‘integrate’ and mainlandise Hong Kong,” She also said that MTR Corporation is majority owned by the government. Some ridiculed the proposal online. “Is the government abandoning its people and pushing them out of Hong Kong?” wrote one SCMP commenter. Many thinks this is going to segregate the poorer residents as well compromising the city’s autonomy.
Personally, politics aside, this does represent a solution to the current crazy property prices in Hong Kong. However, the segregation may be very real and this will not be healthy. No one wants to be known as the poorer community. Even today, whether it’s in Singapore or in Kuala Lumpur, people wants to stay in areas which everyone thinks is of a certain ‘level’ and would shun areas which are seen as ‘cheaper’ or less developed. Anyway, with the continuous rise in property prices, many of these further away areas would still rise in popularity. This is the same as asking someone if they prefer a smaller unit or a bigger unit. Majority would say they prefer a bigger unit but prices would bring everyone back to reality. By the way, if the property prices become totally unaffordable to everyone, get ready for the bubble to burst. I think no one wants that to happen. Happy following.
written on 25 April 2018
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