I totally agree with famed economist Andy Xie. He basically concluded that HK's property tycoons were the real source for most of the discontent in HK youths.
Civil unrest in Hong Kong stems in part from stratospheric housing prices that have locked many residents out of the market, says independent economist Andy Xie.
Hong Kong property prices have risen over 300% since 2003. Beijing needs to stop consulting with property “tycoons” and take away their political power, Xie says.
How difficult is it to follow Singapore's HDB model? Lee Kuan Yew knew back then that the citizens needed to own a place to feel that they belonged. Only when they belonged would they take on real roots and work for the betterment of society and country. Why can't HK do that?
Well because of the enormous influence and wealth of the top 4-6 property tycoons. When they got rich early on, back in the 60s-70s, the top few fellas knew each other very well and it would be not far from the truth that they sometimes acted collusively in bidding wars. It was way back then that they all bought as much land as they could, knowing full well that HK was a small place and if you wanted to continue to be in property, you needed to do a lot of land banking.
Maybe their intentions weren't bad in the first place but as HK progresses, it became clear that they held the spigot to the release of land for development, alongside with the HK government. With each yearly release you will not find the top 4 bidding against each other, but rather one of the top 4 will end up with the winning bid, almost certainly a higher bid than previous year. Thus helping to lift all property valuations and especially their land bank.
In Singapore, the government owns most of the land, and thus can make a conscious effort for public housing. In HK, the tycoons hold the bulk of land bank that matters. So much so that when Beijing were setting up the legislature Legco, top HK property tycoons were the beacons of influence. It would not be far from the truth to say the Legco is beholden to the tycoons in more ways than we care to think.
Recently, Peter Woo of Wheelock and Wharf Holdings, Victor Li Tzar-kuoi of CK Hutchison, Peter Lee Ka-kit of Henderson Land Development, Raymond Kwok Ping-luen of Sun Hung Kai Properties and Henry Cheng Kar-shun of New World Development – issued a joint petition to newspapers last Sunday calling on the public to stop all illegal protests and violent acts to allow stability to return to Hong Kong. It was a galling move and they might not even realise it but it will attract and heighten the animosity against the rich landlords.
Almost every single thing that caused the discontent (besides the tightening laws and regulations from Beijing) can be traced back to the land banking and tycoons control in HK: the prices they pay for property; the rentals and subsequent goods and services to be borne by the public; the stifling rental rates that crimps entrepreneurship owing to ridiculous start up costs ... If you can't forge a way for yourself (being an entrepreneur), you are forever stuck in the brilliant cycle of paying homage and earnings to the landlords. You really are forever working for the man.
Go spend hundreds of thousands for your education and you get sucked into this life sucking ferris wheel of greed where you are forever chasing an every rising target in terms of owning your property. And if you somehow got one, it will have a mortgage so high, you end up working your whole life to pay it off.
Solution: release more land for public housing; speed up public housing by 3-4x; this will cause a correction to private housing but it is a good price to pay... but you can already see how the decision makers' wealth are so tied to property that they would never be able to do that.