Although I do not agree of 3Ds imposed by HKSAR gov, I think the 3Ds are reasonable and logical measures to cool down the property price.
Tighten LTV ratio -- reduce local money purchase power
1. SSD -- to drive out speculators. Successful to drive out speculator. Failure: Speculators become long term landlord.
2. BSD -- to drive out foreign money supply. Failure: Local demand is greater than supply.
3. DSD -- to increase transaction cost. Failure: Reduce local 2nd hand unit supply and channel all demand
(Medium size tenant purchase small units, 1st home buyers, investors) to small units.
They think they can buy time and control with this 3Ds. In fact they did buy a lot of time during the past 2 to 3 years and many should have opportunity to purchase first property.
Some have warned that those time are the last opportunity for 1st property purchase.I remember few months back, a reader here named Jason asked whether he would purchase his first property here, and many good advices were given to him.
Now, it is demonstrated that the fundamental of HK property market is extremely strong.Even without speculative value, the price is historical high. And rental price is catching up to historical high in small A,B units too.
As demonstrated by PP, the property supply should be less than 72K in the next 3-4 years.Even with 72K units, the market demand is higher and can absorb.
I think the property market is not healthy(normal income not affordable) but fundamentally strong now due to:
Rent is catching up and supportive
Negative real mortgage rate = mortgage rate - rental yield
Option value --- potential withdrawn of 3Ds(this has tremendous value embedded in exiting property market) With this option value, bubble may never happens and thus making the market more healthier.
Here I thank Dr Tong, PP, 法子, 亮劍 and many other for their sharing. I personally have benefited from sharing in this forum these years.
My questions now are:
1. Beside increase land supply, if time can travel back, what could government do to better solve housing problem/property price escalation in end of 2010, before the first SSD?(My guess is not much different than existing measures)
2. Beside increase land supply, what other good measures can government apply now?(I dont think they will further increase the level of 3Ds. rent control? property gain tax? Vacancy tax?...)
