Could sky-high house prices lead to a new uprising in Hong Kong?

By Angus Smith | 28 Aug 18
Unsplash/Florian Wehde

Sydney and Melbourne may be two of the world’s least affordable cities. But in Hong Kong, it’s even worse.

In 2014, the Umbrella Revolution inspired a generation of Hongkongers. On the surface, it was a protest about the undermining of civil liberties and democracy — a reaction against the Chinese Government’s decision to vet candidates for the Chief Executive position for the Legislative Council of the Special Administrative Region of Hong Kong.

This might have been the spark that ignited the movement in 2014 but it’s a synopsis that belies the fuel that fired it. In reality, the rumblings that turned into roars still echo through the streets.

…a big part of the motivation behind the Umbrella Revolution was a wider frustration, particularly around housing affordability and the dramatic rise in the cost of living.

“The official cause was universal suffrage not being implemented in the way that it had been promised,” says Jeffery Chan, who is currently facing prosecution and a protracted and burdensome legal battle for his role in uprising.

Jeffery Chan’s arrest. Source: Allen Xie / YouTube

Jeffery Chan’s arrest. Source: Allen Xie / YouTube

According to Chan, however, a big part of the motivation behind the Umbrella Revolution was a wider frustration, particularly around housing affordability and the dramatic rise in the cost of living.

“It wasn’t the cause of the protest, but it was one of the underlying reasons of discontent,” Chan says, “It was a major reason as to why people were angry.”

For eight years in a row, Hong Kong has been rated the world’s least affordable city in which to buy a home according to the Legislative Council of Hong Kong.

The other major issue was stagnated wages. “Wages hadn’t gone up for about 10 years,” Chan says. The professional services industry in particular, across banking, accounting, engineering, marketing and communications, has suffered from wage stagnation. With more and more graduates vying for prime positions in those industries, salaries have become depressed.

When the Umbrella Revolution began, Chan didn’t pick up an umbrella, instead he picked up a pen, notepad, smartphone and camera and hit the streets as a citizen journalist. He was there on the first day of protests on 26 September 2014.

“I went out and saw all these things going on. People were using umbrellas to block tear gas, which is where the movement got its name. It became a thing. An iconic imagery of the event.”

The disproportionate response of the police — batons, pepper spray and tear gas against unarmed protesters — made global headlines and swelled the support for the movement in Hong Kong.

Chan was caught up in the police action and his arrest was splashed across newspapers and news sites around the globe — his photo even made it to the front page of the New York Times.

Adam Wright is a Hong Kong resident, journalist and editor at the South China Morning Post. According to Wright the current generation of young people and those graduating from university are never going to be able to afford a flat in Hong Kong.

“These guys are all children of average income earners, their parents are on an average wage and were able to buy in the 60s, 70 and early 80s. But these kids who are really in the same socio-economic group as their parents are never ever going to be able to afford it, the monthly payments are out of their reach.”

It’s a global story of boomers and millennials. They live in the same world but in two disparate realities.

“The desperation and the pessimism that these young people felt about their future in Hong Kong, was one of the main factors that drove the occupy protests,” Wright says.

“It was youngsters protesting against the collusion of the Hong Kong government and the property developers that has kept home prices ridiculously high. And they can’t see a future here.”

Over 7 million people call Hong Kong home. Photo: Angus Smith.

Over 7 million people call Hong Kong home. Photo: Angus Smith

Many Hong Kong students go overseas for their education and the issue of housing affordability is making some question whether or not they should return. “I don’t think I will be able to buy [a property], even after working for 10 years. It’s a big concern for me and it’s really stressing me out. It makes me worry about my future and ask ‘Should I go back to Hong Kong?’” says Terry Ho, a student at the University of Minnesota and member of the Hong Kong Students’ Society.

Stanley Chow, is also a member of member of the Hong Kong Students’ Society at Minnesota.

“The Government right now is not serving its people, the Hong Kong people. Instead it is serving the central Government. Since the power of the Government is not coming from the people, of course they are not going to listen to us. This is why you see housing prices going crazy — because our democracy has been stalemated,” he says.

“Hong Kong is one of my top options after graduating but my big concern is the political environment, because we are seeing a trend of civil liberties being corrupted and corroded.”

Chow believes that a big concern for Hongkongers overseas will be the political environment. “So basically, Chinese pressure,” he says.

Alan is also a Hong Kong resident, his surname, he doesn’t want used. He was also involved in the Umbrella Revolution’s reclaim protests from the beginning, but left before the violence escalated.

“I got involved because I had friends who were in the protest action.”

He had a day job in his parent’s company but would attend in the evenings after work. Alan also says that it was housing affordability that helped ignite the resentment that caused the demonstrations.

“People can’t afford property — they can’t afford anything. That’s a problem and frustration across society that lead to the protests. It’s not mentioned out loud, but it’s in the background, one of the major issues.”

Allan says that, since 2014, things have not improved, the issues have only stagnated. Although house prices aren’t rising as quickly, affordability is still out of reach for most. He feels if it’s not addressed it could help spark a new wave of civil unrest.

“Yes, there are a lot of people that still want to get back into action. It’s still bubbling away, it’s always been bubbling.”

Pixie Thomas is the Managing Director of Queens Property Consultants in Hong Kong. When Thomas first moved to Hong Kong in the 60s, it was a different city.

“Under the Brits, Hongkongers never really spoke their mind, whereas now they are much more outgoing, and say how they feel and what they feel, they have definitely come out of themselves, the young ones in particular, I think property prices and the cost of living here means people are just not satisfied with the way it is.”

Thomas feels that protests were a dissatisfaction with the way things were but that nothing will change.

“They go on about democracy all the time here, but the Chinese are never going to change. It’s not going to happen. Beijing won’t allow it to happen.”

Since Jeffery Chans’ arrest, the trial has been dragging on for over four years. He says he was arrested for ‘allegedly’ staying at the protest site for too long. It’s a civil trial, not criminal, but it does carry a criminal penalty.’

“The atmosphere is just tense at the moment. Some high-profile activists and Hong Kong independent activists get monitored quite closely.”

“All the issues are intertwined. It’s people coming from the mainland — they don’t follow Hong Kong’s social norms, they are making housing prices a lot higher and on top of that they tend to get priority assignment for public housing over local people.”

Chan says all the money from China is pushing housing prices up. It’s a common sentiment.

“I’m kind of scared to look at the property prices at the moment, I’m trying to avoid it. I’m living in subsided dormitory right now and because of the trial I am in-between jobs.”

The housing affordability issue “is frustrating and never ending.”

Hong Kong has been rated the world’s least affordable city. Photo Angus Smith

Hong Kong has been rated the world’s least affordable city. Photo Angus Smith

The Government has started to tackle the issue and is looking at ways to increase housing density. According to Pixie Thomas, the government has put in place a lot of restrictions on buying in an attempt to cool down the market.

“On a firsthand sale people can get up to a 90 per cent mortgage but on a secondhand sale you have to put down 50 per cent cash. That’s the law there is no way around it.”

It’s not good for business but it might be good for buyers.

Everyone in Hong Kong knows it’s an issue but no-one can agree on solutions. It’s likely that in 2019, Hong Kong will again have the dubious honour of being crowned the world’s most unaffordable city.

What nobody knows is if the umbrellas will rise again.