Facing with the “hot money” in creating the inflated prices of properties in Hong Kong, the Hong Kong government has introduced a number of administrative measures recently to stop any short term speculators from speeding up to the unusual rate of property price increase. Finally, the sudden addition of stamp duty up to 15% of the value of the property for any property transfer within six months after the purchase as introduced on Nov 12, 2010, had helped to cool down the property market with a sharp drop in the number of transaction, cancellation of the sales contracts with loss of deposits from the buyers, etc. The government was happy to see the response of the market and felt that administrative measures being effective after a week. But has it solved the problem of insufficient supply of affordable housing in Hong Kong?
“Perfect competition” with the optimum equilibrium of demand and supply as learnt from the textbook of “economics” does not happen naturally in the market. Most of the time, demand or supply is however manipulated by a number of small groups of people, but affecting the majority of us in the market. High inflated prices are produced by making scarcity out of something including the control of the money supply. Without releasing more supply of the property in the market, the demand will not simply be suppressed by the small curb of the property prices brought by administrative measures.
Money is a commodity back by confidence that goods and services can be exchanged with each other in a fair market condition. Money will flow into areas which can attract interest and attention. Money will not lose value only if without inflation or not flowing into unproductive areas that cannot be used for exchange with other people.
To the majority of people who cannot control the demand and supply of the properties and commodities, we therefore need to face the problem to keep the value of money grow without losing value by inflation. To the small group of people (sometimes including the government though it wants to play an impartial role), who have access to abundant money and resources to control the demand and supply of many commodities in the market, they may need to face the problem to keep the game going by including the majority of us without losing them in the games.
Life is a kind of game which poses problems with purposes, barriers and freedom. It could be some kind of “games condition” whereby some parties playing “must have” versus others playing “can’t have”. How well we play any game depend on whether we are at cause or the effect of the game. No matter whether you‘re playing only either one side of the game: “must have” or “can’t have”, if you are not willing to play the opposite side at the same time, you are still probably the effect of your own game.
To have a better field for our games, it’s time for both sides of the game players be willing to be the opposite side and play them, then we may have better solutions to our problems.
