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as it is, does not include very considerable property owned by the local Government, the Navy or the War Department, or all similar property which is not included for Assessment.
3. As it is not generally appreciated how large a portion of the wealth of the Colony is invested in property, a comparison of this foregoing figure with some of the other large categories of investment may be of value.
4. For example, the total market value of the shares of local companies (other than financial institutions) listed by the Stock Exchange amounts to approximately $150,000,000, although an appreciable portion of the assets of such companies is represented by property. Similarly, the estimated total value of money invested in Chinese factories or in Chinese industry in the Colony amounts to about $50,000,000 which is only a comparatively small sum. Here again a substantial portion of such money is undoubtedly represented by the property or buildings of such factories.
5. The total note issue, which is backed by silver and by sterling securities, amounts to about $160,000,000, but even this sum, large as it may appear, is for the most part held outside the Colony and only a small portion (authoritatively estimated at 25%) is owned within the Colony.
6. These comparative figures serve to make it abundantly clear that a very large portion, if not the bulk, of the wealth of the Colony, is represented by property.
7. That this must be so is hardly surprising in a territory where there is little agriculture, almost a complete absence of any trace of mineral wealth, and where industry is still only in its infancy.
8. At the present time, property values are very depressed and it is extremely difficult to negotiate the sale of any property. There are many reasons which have contributed to this state of affairs. Among these may be mentioned:-
(a) Overbuilding.
(b) Excessive charges for water (in the case of Chinese property).
(c) Building regulations and restrictions.
(d) Rates.
9. We propose to deal with these factors in the above order.
(a) Overbuilding. During the period of low exchange (i.e. 1930-1932) which corresponded with the early years of the world depression, large sums of money were remitted from abroad for investment in the Colony, which had not yet begun to feel the depression. The violent and rapid fall in the exchange value of the local dollar, from two shillings to under elevenpence within the brief period of twenty months in 1929-1931, produced in Hong Kong all the effects of an inflation of currency. A wave of excessive optimism swept the Colony, and large areas of Crown land were sold by Government at public auctions at high prices, mostly for the purpose of building Chinese tenement houses. These sales all carried with them covenants which have now been or are being fulfilled, in the shape of a very large number of buildings for which there is no sufficient demand, even at rentals well below that which would furnish an economic return on the cost of construction. Hence the large number of empty Chinese houses and flats at the present time.
An excess of office building in the central portion of the Colony is also becoming noticeable, but for quite different reasons. Whereas the older office buildings in this area seldom exceeded four stories in height, the newer ones which have been and are being erected in their place rise to eight and more stories, with a consequent doubling of the available accommodation on the same area.
Only in the case of European flats has the supply not yet overtaken the demand, but when present and projected building plans have been completed, there should be sufficient accommodation for this category to meet the needs of a considerably larger European population.