Just speculating

The government has once again changed the mortgage rules for the acquisition of housing units, convening a press conference and issuing a press release on the matter. The press release starts with the not uncommon verbose style that so many of these communications adopt.
The first paragraph states that the purpose of the new measures is to ‘control the excess of investment activities’; ‘to promote the stable development of the housing market’; and ‘to help banks manage their risk levels’. What is meant by ‘excess’, ‘stable’ or ‘help’ is not clear.
The reference is not explicitly made in the document, but it appears the official presenting the measures added, as is customary, a reference to speculation. That possibly accounts for the ‘excess of investment activities’. It is always good policy to blame speculators.
We would have welcomed reliable evidence that previous measures, following broadly similar lines, have been successful. Or, if they weren’t, on which grounds we might expect the new ones to be. No such reasoning was forthcoming. So we have to console ourselves with the idea that the government is doing ‘something’ and, hopefully, something good will come of it. Based upon previous market trends, such belief is likely to require increasing amounts of goodwill.
In a nutshell, the current changes will make it more difficult for people who already own a house to buy another one, if they need credit. In a manner of explanation, the press release notes prices are going up again and mentions a few figures for 2016.
Last year’s figures reveal non-residents and organizations conducted only 1.1 per cent of the total number of transactions. Residents made up the remaining 98.9 per cent, of which more than half were people who already owned a house. These figures seem, implicitly, to underpin the rationale for the new measures.
The effort to put forward an explanation of sorts is welcome. It goes a bit further than usual in trying to justify the new measures. But still falls short of a convincing explanation; it is less than persuasive – but more on that at a later occasion.
For now, let us point out that the figures undercut a popular argument. The ‘speculators’, if they are to blame, are not some malicious Mainlanders or foreigners bent on exploiting the mismatches of our local market. No, they are among us.
Will the government be willing to let us know what their typical profile is?