Hong Kong as a prime example of the new measures required
There are just a few things more desirable for a lot of people than a property in some megapolis. Big city lights, big city vibes, big city opportunities drive us crazy, so the skyscraper-high accommodation prices do.
Nobody would get surprised if own home dream remains never coming true, quite the same situation is said about commercial real estate. But debates and search for a reasonable solution keep on going still further.
Hong Kong notoriously known for its incredible prices for the square meter is on air once again. We call your attention to quite an interesting research made by emeritus professor Liu Pak-wai of the Chinese University of Hong Kong. He put forward the idea as government officials face mounting criticism over a huge surplus projected for the 2018–19 city budget, which lawmakers said should be invested in social programmes.
“High property prices and rents are closely related to high land prices. They are effectively a ‘tax’ as they reduce people’s disposal income,” Liu said.
“But this is not an equitable tax as property owners actually become winners” owing to spiralling asset prices. If the government obtains huge land revenues from these high land prices, why can’t it use that money to help the losers?” he said.
Hong Kong property prices heat up anew after record land sale price and surge in stock market.
Liu, appointed by the government as a member of the working group for the study, conceded that official revenues in the past few years had been much larger than expected. He attributed that to a windfall from premiums when public land was sold to private developers, as well as to stamp duty.
The government could set aside 20 per cent of its land premium revenue each year — about HK$20 billion to HK$30 billion — to help residents put a down payment on a flat. This would amount to about 30 per cent of the property price. Buyers would need to come up with 10 per cent themselves. A bank mortgage loan would finance the rest, up to 70 per cent.
Liu estimated that more than 10,000 people annually would benefit from such a scheme.
Arcona won’t provide with accommodation all those in need but can solve a lot of troubles that the real estate market faces at the moment. For instance the advertisement placed on buildings can definitely be shifted to the augmented reality layer, taking excess traffic away and lowering the prices. In fact quite many businesses could be run online changing the land and real estate owning situation for better.
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