Mr Cecil Chao: Leave us alone!

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… the Hongkong Government compete with private enterprise.

He said that the Hongkong Government is already competing in the marketplace, and he feels that that is enough.

"I don't believe, as a property developer, myself, that what the Government is saying is completely correct," Mr Chao said.

"It is not to the advantage of property developers to delay property projects, should they expect property prices to fall.

"They can always hold on to the properties and rent them out."

The banks are at fault in Hongkong is the opinion of Mr Edwin Chan, Associate Director, Chesterton Petty Ltd, a Hongkong-based property agency.

Mr Chan said that bankers, themselves, have to make sure that they give "generous offers" to the sandwich class.

Instead, they are further tightening up mortgage loans, he said.

"This directly affects the sandwich class. The new policy of The Hongkong and Shanghai Banking Corporation in respect of its ceiling of lending 60 percent of The Bank's valuation of a flat is targeted to eliminate purchasers who are capable of buying a flat worth between $HK4 million and $HK5 million," Mr Chan explained.

This lending policy, Mr Chan explained, hurts the sandwich class — and this is contrary to the Hongkong Government's stated intentions.

His reading of the situation is that the Government wanted to help the same people whom they are now hurting.

The poorest sector of the Hongkong society cannot afford to buy a flat, no matter how cheap it may appear to be at this time.

At the same time, the very wealthy do not have to concern themselves about large increases in the cost of new accommodation because they will always be able to afford to live in a style to which they are accustomed.

Therefore, those people in Hongkong, earning between $HK40,000 a month and $HK50,000 a month — the sandwich class — are the people whom the Hongkong Government needs to help in order that they have the correct incentives to improve their living conditions.

Yet, according to a number of people with whom TARGET spoke, what the Government is doing, in collaboration with certain Hongkong banks, is contrary to what the Government originally intended when it determined to try to cool down the property market.

Mr Chan believes that if the Hongkong Government leaves the market alone, it will adjust itself — as all free markets do.

Perhaps Mr Cecil Chao should have the last say: "Governments around the world are there to look after the poorer sector of society, while the upper levels should be left to the private sector."

Photo caption: Mr Cecil Chao: Leave us alone!