Historical trend of real estate in Hong Kong

The main reason for the high housing prices in Hong Kong-the government's high land price policy.

The cause of Hong Kong's high land price policy is a series of historical results under special circumstances, which all need to start with the British occupation of Hong Kong in 184 1.

port

After the First Opium War, Britain wanted Hong Kong to be its colony. At that time, the main reason why Britain took a fancy to Hong Kong was Victoria Harbour. At that time, the British were building a global trade route to transport the raw materials they plundered and the products they produced. They need a free trade port that doesn't tax them, and the natural advantages of Victoria Harbour-deep water, wide harbor and shelter-are just what the British need.

It is precisely because the British have designated Hong Kong as a free trade port that the British Hong Kong government cannot collect taxes from trade, but needs funds to build Hong Kong. Hong Kong is poor in land and natural resources, and the British government is unwilling to transport money. Therefore, the only thing the British Hong Kong government can do is to own land. The important role of land in the development of Hong Kong began.

From the moment Hong Kong became a British colony, according to the Letters Patent, all land immediately belonged to the British royal family, the so-called "crown land". Therefore, the so-called land auction in Hong Kong is actually not a permanent sale of land, but only a sale of leasehold rights, which can be called "land grant". (In the early stage, the land grant period was particularly long, which was 999, and it was shortened to 99 in the later stage. At present, the land transfer period is mostly 50 years. )

The British acted resolutely. 184 1 land was publicly granted on June 7, 2008.1On June 4, 2004, Admiral Sir Charles Elliot successfully auctioned the 404 plot in Macau.

Since all the land belongs to the British royal family, the best way for the government, as a monopoly supplier, to safeguard its own interests is to sell it slowly and bit by bit and raise the price. Therefore, restricting the sale of land will inevitably become the most rational behavior of the government, which is the beginning of the high land price policy.

People in their fifties and sixties

Stepping into the 20th century, in the late 1940s, due to domestic war and turmoil, a large number of mainland people flooded into Hong Kong, and the population of Hong Kong expanded rapidly. The population of Hong Kong surged from 65438+600,000 in 0946 to1860,000 in 0949, and even exceeded 3 million in 1959. The rapid growth of population made life one of the social and economic sectors at that time. Therefore, the British Hong Kong government established the Hong Kong Model Housing Association on 1950, and the government allocated land to provide low-rent housing for low-income residents. There are demonstration villages in the residential areas under construction, and a large number of resettlement areas have been built in 1954. Later, the resettlement house was the predecessor of public housing in Hong Kong.

Originally, the British Hong Kong government, as a colonial government, was unwilling to spend so much money on public housing, but later it got bigger and bigger. Why? On the one hand, it can certainly be regarded as humanitarianism and social stability, on the other hand, it can also be regarded as the interests of more British people.

At that time, in addition to trade, light industry in Hong Kong gradually emerged, and a large number of poor immigrants from the mainland became factory workers. Resettlement areas can be regarded as workers' dormitories, which can reduce the cost of factories and help Hong Kong export. In fact, they are a kind of subsidized production. In addition, the establishment of public housing can help the price of private housing, that is, help the government's high land price policy. In 1950s, with the rapid increase of population, a large amount of capital poured into the real estate industry, and a real estate boom appeared in Hong Kong.

Under the high land price policy, the British Hong Kong government can maintain Hong Kong's competitive advantage at a low tax rate, and at the same time, it can provide public services with income, which provides a certain guarantee for low income. At the same time, the middle class can enjoy the benefits of increasing wealth by investing in real estate, which gradually strengthens the dependence of the whole Hong Kong society on the high land price policy.

Smart China people emphasized the importance of real estate to Hong Kong's economy. 1955, the patriotic businessman Henry fok invested in the construction of the skyscraper, the tallest building in Hong Kong at that time.

In the process of construction, Henry fok initiated the sales methods of "layered sale", "installment payment" and "selling uncompleted residential flats", which brought revolution to the development of Hong Kong's real estate industry and accelerated the prosperity of the whole Hong Kong real estate market. Since then, local industry has become one of the pillars of Hong Kong's economy, accounting for more than 20% of GDP and becoming a "barometer" of Hong Kong's economy.

70 s

The 1970s was the era of Hong Kong's real estate frenzy, and it was from this era that Hong Kong's Chinese giants and Hong Kong's four major real estate developers began. For example, Li Ka-shing, the richest Chinese, 1958 changed his investment in real estate, 197 1 set up Cheung Kong Industries, and 1972 listed on the Hong Kong Stock Exchange.

In the same year, the then Governor of Hong Kong, MacLehose, formulated the "Ten-year Housing Plan" policy to provide 1973 to 1982 public housing. By 1978, the "Home Ownership Scheme" (that is, the low-rent housing scheme) was implemented, which solved the housing problem of more than two million grassroots citizens.

This shows that the high property prices at that time were a serious social problem.

Sino-British Joint Declaration

It was from 198 1 that China and Britain negotiated the future of Hong Kong. 1984 The Sino-British Joint Declaration stipulates that under the principle of "one country, two systems", the China government will ensure that its socialist system will not be implemented in the Hong Kong Special Administrative Region, and the capitalist system implemented in Hong Kong will remain unchanged for 50 years.

It is worth noting that in 1984, People's Republic of China (PRC) and Britain signed the Sino-British Joint Declaration, which stipulated that the British side could only sell 50 hectares of land each year during the transition period (1984- 1997), and the Chinese side would need to agree to exceed this amount.

In addition, during the period from1May 27, 1985 (that is, the date when the Sino-British Joint Declaration came into effect) to1June 30, 1997, the authorities formulated a land grant or lease policy in accordance with Annex III of the Sino-British Joint Declaration. Generally, the lease term of land leased in Hong Kong shall not exceed June 30, 2047. The lessee of the relevant lease shall pay the premium and nominal rent until June 30, 2007. After that date, the lessee shall pay an annual rent equal to 3% of the rateable value of the land concerned. As for the contract that expires before June 30, 1997, according to the provisions of the Sino-British Joint Declaration, except for short-term leases and special-purpose contracts, it can be extended to 2047.

The Sino-British Joint Declaration limits the annual land supply in Hong Kong to no more than 50 hectares, which gives the British Hong Kong government an excuse to drive up land prices. Directly let the high land price be higher and let the property price soar like a rocket.

In the past ten years, the land price in Hong Kong has increased 20 times. The high land price makes only a few real estate developers with huge capital participate in the land market, resulting in oligopoly, resulting in the same interests of the government, land price giants and millions of private property owners, resulting in the need to continue to raise land prices after the reunification.

In addition, enterprises, especially small and medium-sized enterprises also need high housing prices. Housing is an important collateral for Hong Kong's industry and commerce. Small and medium-sized enterprises often borrow money from banks through housing mortgage, which makes housing the most acceptable collateral for banks in Hong Kong, and also strengthens the high land price.

Why does the Sino-British Joint Declaration restrict the annual land supply in Hong Kong to no more than 50 hectares? There is a conspiracy theory that colonialists want to retreat, but at the same time they plan to safeguard their own interests in the colonies. The common means is to support pro-colonial forces as their agents in the local area after withdrawal. A more cunning means is to bind the interests of local economic elites with their own interests, so that they can share weal and woe with the retreating colonists and lose both sides.

Restricting land supply and implementing a high land price policy are obviously beneficial to British companies that already control traditional prime locations on Hong Kong Island. However, the British have accumulated hundreds of years of colonial history, and have long been proficient in playing politics. They know that to consolidate their own interests, they must let the political and economic elites after the reunification share a piece of the high land price policy. 1984 it is a foregone conclusion that China will resume the exercise of sovereignty over Hong Kong on 1997. After 1997, the political and economic elites, mainly China people, will take the place of the British in governing Hong Kong. In order to safeguard the interests of the British people after 1997 and make the interests of these elites consistent with them, it is the core of the whole evacuation layout.

The top economic elites in Hong Kong have basically earned initial capital from manufacturing, finance or trading, and then earned huge capital through real estate development projects, and then invested in other industries. Since real estate development and investment property rent collection are still the core interests of the top elites in Hong Kong's economy, the continuation of the high land price policy will be supported by a solid interest structure while protecting the interests firmly grasped by British capital.

After the reunification

The fundamental reason for the high land price policy before the reunification is that the British exploited Hong Kong people for their own interests. Why should China people exploit their own people after the reunification? Therefore, Tung Chee-hwa launched the "85,000"-"85,000 Housing Construction Plan". The 85,000 housing construction plan, referred to as 85,000 for short, is a policy put forward by Tung Chee-hwa, the Chief Executive of Hong Kong, in his policy address 1997. Tung Chee-hwa proposes to supply no less than 85,000 units a year, hoping that 70% of the families in Hong Kong can buy their own houses within 65,438+00 years, and the average waiting time for public rental housing will be shortened from 6.5 years to three years.

Unfortunately, the financial turmoil in 1997 and SARS in 2003 hit the real estate market in Hong Kong, and a large number of owners became negative assets. As the backbone of society, the middle class has become a negative asset, and the economy of the whole society cannot be maintained. So the high land price policy, which was originally intended to solve the goal, became the only savior.

In order to stabilize the high price of the property market, the SAR government has issued a large number of policies, which are actually an enhanced version of the high land price policy.

For example, Sun Jiuzhao 1. Cancel the land auction and suspend the land application for one year. 2. Suspend the bidding for housing projects of the two railways (MTR and KCR) for one year. 3. Future public housing construction will be demand-oriented. The average waiting time is no more than three years. 4. Immediately terminate the Home Ownership Scheme. 5. Provide new interest-free loan schemes for low-income families and public housing residents. 6. Immediate termination of mixed development, Private Sector Participation Scheme and Housing Society-subsidized Home Ownership Scheme. 7. Termination of the sale of public housing (Tenants Purchase Scheme). 8. Review the Landlord and Tenant (Consolidation) Ordinance to relax the right of owners to resume their properties. 9. Cancel the internal subscription restrictions and cancel the purchase of two parking spaces in one unit. This series of policies has led to the surprisingly high housing prices in Hong Kong today.

For example, before 20 10, the government allowed the window sill to extend 500 mm outside the building. This part does not need to be included in the construction area, but it can be included in the sales area. Therefore, it is natural for developers to use up the extra sales area obtained free of charge. Therefore, the relatively new private buildings in Hong Kong are full of oversized window sills.

In recent years 10, another feature of new buildings in Hong Kong is the open kitchen, because according to the joint operation preparation prepared by the Buildings Department and other departments, each unit can only have one green terrace and working platform, which is not included in the construction area and belongs to the sales area.

In recent years, the government has mostly used the "application list" to sell land, commonly known as "application list", which is a way for the Hong Kong SAR Government to auction government land at present. This system was introduced after the Asian financial crisis (1999), and was implemented at the same time with another traditional mechanism of auctioning official land-"regular land sales". Simply put, "land application" means that before the land is officially listed for sale, the units interested in the land indicate their purchase intention to the government and promise to pay the land price.

Under the "Application List" system, the Lands Department of Hong Kong regularly publishes the public land reserve list "List of Land for Sale", commonly known as "Application List". Members of the public who are interested in buying land, including real estate developers, can apply to the Lands Department for the "Application List" and quote the reserve price. After receiving the application, if the price increase is 100% of the government's estimated market price (note: at present, Hong Kong's land application can also accept 80% of the official market price), the land will be "circled" according to the regulations, and its bidding and auction will be organized within the prescribed time limit. The highest bidder in the public auction will be awarded, and the bidder must participate in the bidding, but the bidder's bid shall not be lower than the reserved price at the time of application. If the auction fails to reach the tender price, that is, the secret reserve price at the official auction, the Lands Department has the right to recover it and reserve it for the next auction until it is equal to or higher than the government's expected price. If no one offers the price equal to or higher than the applicant's application in the auction, the government has the right to confiscate the original applicant's deposit. The deposit is to ensure that the auction price will not be lower than the original price increase of the marquee.

In the process of land sale, the government will not provide any preferential treatment to the applicants. If the applicants fail to purchase the land in the end, they will not pay interest when returning the deposit.

Some people think that the application list is another reason for the high property prices in recent years. Some people think that the application list system makes the land supply in Hong Kong meet the actual demand of the market, reduces the interference to the market and ensures that the land is sold at a reasonable price. However, some people think that there are some problems in the current application list system. When the government implements it, it often only allows land prices to rise and not fall, which distorts the normal price rise and fall of the market. Moreover, on the surface, the government does not openly check the reserve prices of various blocks, which artificially creates the problem of asymmetric market information, increases the difficulty of land inspection, leads to rare auctions, and further tightens the supply of land in disguise.

abstract

The high land price policy was originally used by the British, and in this process, the dependence of Hong Kong's overall economy on the high land price policy became inevitable. Any intervention in the high land price policy will definitely hit Hong Kong's economy and competitiveness.