Time to rein in the property market

Time to rein in the property market

The real estate market enjoyed a rapid boom recently. Property prices are soaring in an irrational way and there are fears that the situation could get out of control. High demand for luxury properties and a shortage of land are driving prices even higher.

The public is very concerned about the property market as many middle class people now find it difficult to buy a flat at a reasonable price. There are growing calls for the government to introduce measures to stabilise the property market, such as boosting land supply and reintroducing the Home Ownership Scheme.

The reasons for the current high prices are complicated and there is no easy, single solution to the problem. The government could implement different measures to cool the market. But a dilemma could easily emerge. Property prices are a key indicator for economic trends and a thriving property market implies positive economic growth in general.

Contradicting policies, if carried out unduly, can adversely affect development. Yet, the government should come up with suitable measures to stabilise the market, as intervention is required when it fails to be regulated by its own "invisible hand". Moreover, these problems must be addressed promptly in respond to growing public demand.

However, the attitude of the public in the current predicament is not entirely realistic. The government's housing policy should aim to ensure that its citizens live in a safe and stable environment. It can never promise or guarantee that everyone will be able to afford to buy a flat, especially given the constraints of Hong Kong's narrow tax base and low tax rates. The supporting arguments urging the government to control the market are not too strong after all.

People will always have different kinds of expectations of the administration, but they might better try to interpret the issue from the perspective of society in general instead of focusing on self-interest.

The government will find it extremely difficult to cater to all the different demands of the public, but it can show a better attitude during consultations with the public and devote more resources to gain their support.

On the other hand, the public could continue to apply pressure and fight for general improvements in living standards with more reasonable requests.

The out-of-control property market is only one of the more prominent events to showcase the split between public expectations and government performance. The best solution involves good communication and mutual respect.

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