Budget | Relaxing mortgages and banning rent chases can really solve the problem?

In addition to the focus on electronic consumer vouchers in the new year's budget, the relaxation of residential mortgage-to-value ratio caps and the prohibition of business owners from chasing rents are also attracting attention.

The government may have well-intentioned hopes to help citizens with limited financial resources "get into the car" and give shop tenants a break, but the result is always counterproductive.

Financial Secretary Chen Maobo explained in his Budget speech that the maximum mortgage loan for first home buyers will be raised from 10 million yuan to 12 million yuan, and the maximum 90% mortgage loan will be raised from the current 8 million yuan. to 10 million yuan.

The biggest beneficiaries of this move are middle- and high-income people and property owners with a property price of around 10 million yuan, who can reduce the down payment burden.

Mortgage relaxation does not help to depress property prices

The government explained that the mortgage revisions take into account the current market environment, the housing supply situation in the next few years, and the needs of first-time homebuyers and home-exchange households.

However, the existing owners may increase the asking price because of this, and the actual effect may change the trust.

Furthermore, in addition to buyers with a monthly payment of 30,000 yuan, there are also a large number of grassroots who live in small housing such as subdivided housing and dwellings, and can only wait for public housing to face housing problems.

Relaxing the LTV will not allow them to find suitable flats in the market. On the contrary, because the government has stimulated the mid-price property market, some owners have already turned their backs on the price, which will reduce the number of mid- to low-priced properties and reduce the choice of boarding passengers.

The problem of high property prices has a limited relationship with the mortgage ratio. To make people live in peace, the government needs to review the stamp duty and rent control regulations in the short term to stabilize property prices and rents. In the long run, it is to speed up the progress of finding land and building houses.

Financial Secretary Chan Mo-po released the latest Budget on Wednesday (February 23).

Merchant financial difficulties can not be solved after three months

Another "wrong drug" measure is to prohibit shop owners from chasing rent.

The government will introduce a bill to prohibit landlords from pursuing rents in designated industries affected by the fifth wave of the new crown epidemic for a period of three to six months.

Chen Maobo hopes that the landlord will not use legal action to "kill the tenant", and through the HKMA will notify the bank to flexibly handle the case of the landlord who fails to receive the rent to pay.

The government may have launched this move with good intentions, but the business environment is due to the epidemic. The losses from the sharp decline in business in the past few months will not be fully recovered in three months, and merchants will always face the problem of turnover.

At present, the government's Anti-epidemic Fund subsidy for the closure of designated premises is half-hearted, and can only cover a small part of daily expenses.

In addition, the small owners who rely on the rent collection of the shops to survive and provide shops are also worried that the tenants will not be able to calculate the rent delay period of three to six months. loss.

In recent years, many businesses in the retail core area have closed down and their shops have been vacant for a long time.

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Government and landlords share responsibility for rent reduction

In the final analysis, the problem is that rent is the main source of business pressure for merchants.

The government has called on major landlords to take the initiative to reduce rent more than once. The Hong Kong Retail Management Association also asked landlords to reduce rent or waive the basic rent, but it seems that the response of landlords is insufficient.

To balance the situation of landlords and tenants, the method can be to provide incentives for landlords to reduce rent.

Tian Beichen, a legislator who runs a fashion retail business, once proposed that after rent reductions for landlords, profits tax could be tripled.

In this way, the government and landlords can jointly share the pressure of rent reduction.

Similar support measures have also appeared in some countries. For example, the Swedish government subsidizes landlords who reduce rents to tenants, and the Singapore government allows small landlords under certain conditions to apply for compensation from the government if they face financial difficulties due to early termination of the lease by the tenant.

These measures can maintain the minimum income of the landlord and help the tenants, and also give the government itself an additional reason to control the epidemic at full speed, otherwise the government will provide subsidies and compensation for a long time.

The new budget is longer than before, and the measures also touch all walks of life. However, not all measures can also address the cause of the problem. Relaxing the mortgage ratio and prohibiting rent recovery will not help alleviate the housing difficulties and the tragic business situation.

While there is still time before the motion is considered and voted on, the Financial Secretary should listen to public opinion, improve measures, and directly assist the business people.

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