HONG KONG REAL ESTATE OUT OF CONTROL (via Spike)

Please read below - it is originally from Spike from here http://hongkietown.com/ - Thank you for being so kind to just let me copy it as is:
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How can a poor man stand such times and live? That’s the title of a song written in 1929 during the American depression by Blind Alfred Reed, who accompanied himself on the violin according to Wikipedia. Presumably he couldn’t afford to hire any back-up musicians. Bruce Springsteen sang it in 2006 though he rewrote most of the lyrics. Ry Cooder recorded the song in 1970 and in this video on Youtube (I think it’s from the 70′s) he is accompanied by the always incredible Flaco Jimenez.

Of course in Hong Kong, it’s not just poor people, even the middle class is being squeezed far beyond the bounds of normalcy or decency.

From today’s SCMP:

Property prices in Hong Kong have risen by more than 45 per cent from the trough to which they sank after the onset of the global financial crisis in 2008, research by the Hong Kong Monetary Authority shows.

The recovery in the luxury residential market has been particularly strong and average prices in the sector are now 14 per cent higher than their previous historic peak, reached in the third quarter of 1997.

Prices in the mass residential market are only 10 per cent down on the peak levels reached before the Asian financial crisis of 1997-1998 triggered a sharp slump in the market.

But homebuyers are not as heavily indebted as they previously were, with the current mortgage repayment-to-income ratio at around 40 per cent, compared with more than 100 per cent in 1997. Mortgage rates are also less than 2.5 per cent, against more than 10 per cent in 1997.

The average loan size is about HK$2.5 million with an average contractual period of 23 years, both at record highs for the past 10 years.

Hong Kong has surpassed New York, Paris and Tokyo to become one of the most expensive cities for buying a flat, according to a report from the Global Property Guide.

The report says Hong Kong is now the third most-expensive city for buying a 1,291 sq ft apartment in the city centre, with Monaco the world’s most expensive and London in second place.

“Demand for housing in Hong Kong is no longer limited to local people, but also comes from the mainland,” said Alva To Yu-hung, the head of property consultant DTZ.

and from another article in SCMP today:

“We are not surprised by these [property price] figures,” Buggle Lau, chief analyst at Hong Kong property broker Midland Holdings, told reporters.

“In recent years, Hong Kong has seen a surge in mainland Chinese buying luxury homes… This has created a situation where demand for luxury homes exceeds supply.”

Pro-government lawmaker Raymond Ho Chung-tai called on the government to do more to help the city’s less well off during a debate on Wednesday.

“Residential flat prices have become a major concern for Hong Kong people,” he said.

“The middle and lower class are finding it more difficult to afford flats amid ever-increasing property prices.”

“The government should consider resuming ‘Home Ownership Scheme’ to meet the demand for flats and increase land auctions to increase land supply.”

Opposition lawmaker Frederick Fung Kin-kee said: “For private developers, of course it’s the more money, the better… They are not willing to help stabilise the market,” said another,

“Since there is no regulation, it is not possible to control their greediness and shortsightedness.”

None of this is a surprise, really. Not even the fact that someone’s English name is Buggle.

And a third article in the SCMP. Maybe this would attract someone’s attention in government – if anyone actually paid attention to the SCMP.

… lawmaker Wong Kwok-hing of the Federation of Trade Unions said on Wednesday the scheme not cool down property prices.

“This policy would not control property developers [driving up prices]. People feel depressed and angry about it,” he told Legco.

Wong also criticised the government for giving no details on several other policies, including retirement allowances for the elderly; policies affecting standard working hours, and new laws to regulate private columbaria.

Hong Kong Association for Democracy and People’s Livelihood lawmaker Frederick Fung Kin-kee also attacked the new housing policies.

He said the government had made available at least 5,000 unsold flats annually under the old Home Ownership Scheme (HOS). But the supply of flats under the new “My Home Purchase Scheme” would only produce 5,000 units by 2014.

“The housing policy outlined in the policy address would not help stabilise the property market,” he predicted.

Fung called on the government to resume building HOS flats.

In other developments, the pan-democrats said they would move five amendments to the motion of thanks for the policy address. The Democratic Party’s three lawmakers plan to move three amendments.

These include a call for the resumption of the HOS flat scheme, abolition of appointed District Council seats by next year, and a motion expressing their disappointment at government’s policies to tackle poverty.

Fred Li Wah-ming, a leading member of the Democratic Party, said his members probably would not support the motion of thanks if their amendments were not passed.

But lawmaker Ip Kwok- him of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) said his members would vote against the Democratic Party’s motion of amendments to the policy address.

The Economist surveys the global housing market and has decided that Hong Kong real estate is over valued by 58%. They rate Australia as the most over-valued, Hong Kong only comes in at #2. Lord Donald “Boom Boom” Tsang needs to try harder.

There once was a time when everything was cheap, But now prices nearly puts a man to sleep. When we pay our grocery bill, We just feel like making our will — I remember when dry goods were cheap as dirt, We could take two bits and buy a dandy shirt. Now we pay three bucks or more, Maybe get a shirt that another man wore — Tell me how can a poor man stand such times and live? Well, I used to trade with a man by the name of Gray, Flour was fifty cents for a twenty-four pound bag. Now it’s a dollar and a half beside, Just like a-skinning off a flea for the hide — Tell me how can a poor man stand such times and live? Oh, the schools we have today ain’t worth a cent, But they see to it that every child is sent. If we don’t send everyday, We have a heavy fine to pay — Tell me how can a poor man stand such times and live? Prohibition’s good if ’tis conducted right, There’s no sense in shooting a man ’til he shows flight. Officers kill without a cause, They complain about funny laws — Tell me how can a poor man stand such times and live? Most all preachers preach for gold and not for souls, That’s what keeps a poor man always in a hole. We can hardly get our breath, Taxed and schooled and preached to death — Tell me how can a poor man stand such times and live? Oh, it’s time for every man to be awake, We pay fifty cents a pound when we ask for steak. When we get our package home, A little wad of paper with gristle and a bone — Tell me how can a poor man stand such times and live? Well, the doctor comes around with a face all bright, And he says in a little while you’ll be all right. All he gives is a humbug pill, A dose of dope and a great big bill — Tell me how can a poor man stand such times and live?
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