Purchase restriction is not suitable for Hong Kong

Hong Kong property prices rose for 25 consecutive months. The price index of the private residential property of the Rating and Valuation Department rose from 273.1 points in April 2016 to 375.9 points in May of this year. It surged 38.5% in two years, and it was 18 consecutive months. Broken top. Seeing that the property market is so hot, many people make suggestions to the government. For example, Li Huiqiong, chairman of the “Greatest Party” DAB, suggested yesterday that the Hong Kong Government should follow the Mainland’s implementation of the “restriction order,” and when financial minister Chen Maobo responded, he said he would not comment. The property market boosts the intrigue. However, restrictions on purchase are basically not suitable for Hong Kong. Experiences in the Mainland have proved that the only thing that effectively curbs property prices is the “limit order”. If the Hong Kong Government “fit enough ginger” to use this trick directly, the price is to sacrifice the freedom of Hong Kong. Market foundation.

Undeniably, in the face of skyrocketing property prices, the citizens and policy makers who are on the train are increasingly anxious. Many people pray for the government to “do it”, including the “empty tax” that the authorities are currently studying and the suggestion by Li Huiqiong. Purchase restriction order.” The so-called “restricted purchase order” has been flourishing in the Mainland in recent years, mainly because people are prohibited from buying more than one or two (depending on different city policies) residential properties. It is hoped that the “snails of snails” will be easier to get on board.

The current spicy tax has deterrent effect

Regardless of whether this move has achieved the desired results in the Mainland, the “restriction order” is not suitable for Hong Kong. First, in Hong Kong, the “Double Stamp Duty” (DSD) hot move, which imposes an additional tax of 15% on non-prime home buyers, is somewhat equivalent to a soft “restriction order,” but it does not prohibit people from buying more than one. Instead of real estate, deterrence is caused by high taxes, which “punish” investors.

In addition, last year, about 8,000 residential transactions in Hong Kong required the payment of DSD, which accounted for about 13% of the total number of residential transactions. In other words, nearly 90% of the purchasers had no Hong Kong residential properties on hand. Furthermore, investors who normally own properties do not have an interest in the “chariot-on-car” on which the average price of baht is relatively high and the rent is relatively low. Nowadays, the “Boardhouse New Disk” is highly sought after. In fact, it is mainly driven by the needs of the users. The general public can only afford the lump sum unit. In order to get on the bus, even if the price is higher, the price will be reduced. Therefore, even if the “restriction order” is actually introduced, the effect of limiting the buyer’s demand is limited, and secondly, the assistance to assist the public in getting on the bus is even more modest.

China’s mainland limit price gave birth to grab the building

The most important thing is that since 2010, the Mainland began to implement restrictions on purchase orders in major cities such as Beijing and Shanghai. Now it extends to almost all Tier 1 and Tier 3 cities. However, property prices in the Mainland have intensified in the past 8 years. It has been proved that the purchase restriction order does not help To curb property prices, after all, the long-term price of any market is determined by supply and demand; the so-called “restriction of purchases” can only disrupt prices in the short term, but it will lead to even more fierce follow-up retaliatory pursuits (for example, developers may be restricted by restrictions). Measures to reduce land purchases or slow down the development of projects, making short-term supply even more short-term).

Until last year, the Mainland finally found one of its ultimate tricks. It seems to be useful, that is, a “limit order”, which means that the ceiling price is set for each new set. If developers do not accept the opening quotation, it will be like returning to the planned economy. On the face of it, this move has indeed worked, and it is about the government’s ability to directly control the price of first-hand properties and affect the expectations of the second-hand property market. Since last year, property prices in the first-to-third-tier cities in the Mainland have dropped by an average of about 10%.

However, the “Limit Order” also caused a lot of sequelae. As the price of new discs in the Mainland has been artificially suppressed by the government, there is now a 20% to 30% “inverted hangover” in relation to nearby secondary housing prices (ie, the new disc is a lot cheaper than second-hand buildings), which makes the new discs more sought after and is considered to be “ Buy is to earn.” Every time new discs are put up for sale, there are tens of thousands of people waiting for them to rush to buy them overnight. The government then asked the developers to sell them by “shaking hands” (lottery). The success rate is often as low as 5% or less. This operation brought a lot of space for rent-seeking corruption. For example, after the netizens exposed complaints over the weekend, the Xi’an municipal government confirmed that 35 public officials “greet” to a local new developer to “go backdoor to buy a house”. The 35 individuals were dismissed or received serious warnings.

Increase vacancy stamp duty stamp

In addition, the price limit will also interfere with the short-term price signal, leading to long-term supply is not enough, unless the government has the determination to limit prices until the end of the day, completely return to the planned economy model, and that is another matter.

Of course, apart from focusing on the long-term balance of supply and demand, governments in various places may sometimes be blamed for intervening in short-term prices to buy time. For the Government, the introduction of restrictions on purchases has limited effectiveness and may even outweigh the benefits. However, after the “big debate” attempts to open up long-term land supply, there is still a trick to consider in the short term, that is, to impose buyer stamp duty (BSD) and double stamp duty. The (DSD) tax rate has been further increased from 15% to 50% or more, targeting foreign buyers and local investors respectively. At the same time, the new disc vacant tax has been formally implemented so as to allow users to fully dominate the market in the short term until the long term Increase supply to the city so far. This may be a compromise between more flexible and less sequelae than the purchase restriction and limit order.