It may take a visit to the world’s freest economy to teach North America how to deal with soaring housing prices in its major cities.
CityAge’s next conferences take us to five of the world’s top 10 most expensive housing markets — Hong Kong, San Francisco, San Jose, Vancouver and Los Angeles.
Achieving housing affordability is becoming one of the great economic challenges for these cities. A productive economy needs housing for not just for its most affluent, but also the rest of the people who make a dynamic city function.
Hong Kong is doing something about the affordable housing crisis It’s attempting to increase the supply of land, to allow for more construction. It’s also building more public housing on its own, something few other cities do any more. And Hong Kong is taking aggressive action on speculation and putting controls on foreign buying.
Hong Kong Chief Executive CY Leung summed up the policy in a few sentences: “Our responsibility is to address the public’s housing problem by increasing housing and land supply…and to curb demand in three areas, namely investment demand, speculative demand, and demand from outside of Hong Kong.”
One of the most interesting policy innovations we’ve learned about in Hong Kong is the buyers’ stamp tax duty. It’s simple. There is a 15 per cent duty on non-Hong Kongers, or companies owned by a foreigner or local who buy a home. If any of those want to buy two properties, the stamp duty doubles to 30 per cent.
How is this intervention being regarded by the people of the city state that has been voted the world’s freest economy? Well, most residents don’t mind taking on the speculators. And the policy appears to be working.
Hong Kong’s official home-price index — which in Hong Kong can soar as quickly as a skyscraper — has reported its first decline in two years.