Much of the attention in the residential sector lately tends to focus on the gloomier side of the equation. We are bombarded with data on the scale of the correction in prices and, as a result, how many families now find themselves in negative equity. But it is worth spending a moment or two highlighting some of the positive aspects of the culture shock that the market and the players have experienced over the last two and a half years.

The first, undoubtedly, is the move away from the "pass the parcel" mentality of those heady days leading up to the handover when the speculator dominated the market and housing was treated and traded as a commodity.

With the prospect that growth in the future is likely to be driven by economic fundamentals of a more modest nature than in the past, any potential purchaser is faced with the likelihood that he or she may have to actually move into the property. And in all probability live there for a number of years before he can afford to up-grade.

Gone are the days when a property was traded seven or eight times before it ended up in the hands of the end-user. The purchaser is now faced with making a long-term investment decision! The reality is that this is a major shock to the system. It is not surprising that the market is in some disarray as prospective purchasers struggle with the responsibilities of ownership and the liability for up-keep that comes with an investment in the residential sector, not only of their own unit, but also of the public and common areas.

There is a realisation, albeit gradual, that failure for owners to maintain their property will -- over time -- affect and impact the value of the unit. As a result, I believe that we are going to see individual owners take a much closer interest in the upkeep of their blocks and estates. Previously it did not matter because most individuals did not own for long enough for maintenance to become an issue, but the advent of a much longer investment horizon bodes well for the government's efforts to raise awareness in the area of property management and maintenance.

The second positive aspect is the marked improvement in affordability, notwithstanding that incomes have stood still or even fallen, and that some families now find themselves with at least one contributor to the monthly mortgage unemployed.

There are a whole variety of ways to measure affordability. Take for example a 60 sq. metre unit in the New Territories, which is towards the top end of the size range. Let's assume a family takes out a 70 per cent mortgage, repayable over a 20-year term, and that a family, by choice, would be willing to allocate 50 per cent of the family income to paying the monthly instalments on the mortgage. In this case, only 27 per cent of Hong Kong's 2 million families could afford to purchase such a unit at the height of the market in 1997.

Even given the difficult economic times that we have experienced and making an appropriate downward adjustment in the family income profile, the position is now materially improved with the percentage now approaching 70 per cent. That number in reality is considerably higher if loans, mortgage subsidies and other forms of financial assistance are factored into the equation.

You can argue that US$200,000 is still too much to pay for a "small" 60 sq. metre unit, but it is clear that most families can afford to purchase, if they choose and have the confidence to do so.

The third interesting and positive aspect is that ownership of property and a growing sense of belonging increases concern about quality of life issues. These include the environment and sustainable development and a wish to not only be consulted on such issues but also to participate in any debate and in the decision making process. It is not surprising therefore that we are seeing increased pressure for greater transparency and participation in decisions relating to the environment, land use planning and any initiative which is seen to impact what little "heritage" Hong Kong still possesses. Pro-active and creative debate and discussion can only lead to better and more considered decisions and the SAR administration clearly now appreciates the need to secure the community buy-in on all strategic planning initiatives.

The fourth and final positive development -- for the purpose of this short article -- is the recognition by the development community that they must respond to -- and indeed anticipate -- the aspirations of an increasingly demanding prospective purchaser. They must also recognise that, given the weakness in the market and the excess inventory overhanging the market in some areas, product differentiation is the name of the game.

Some of the hype associated with the various "i" and "e" initiatives upon which most of our major developers have embarked is clearly related to the wish not to be seen to be missing out. Whilst some of the investment can be attributed to a genuine wish to diversify, much is due to the realisation that the "smart" or "digital" home is likely to be the norm rather than the exception in the future. Access and control; information and indulgence; service and sophistication are all likely to become standards in the management manual and a dedicated online access to a whole range of goods and services is what owners and tenants alike will expect.

Never before has there been the opportunity to really understand how your building works or to take control over the way your building can work for you. Such systems can provide access to relevant documents -- your lease, the management rules, the Deed of Mutual Covenant, -- to your current bill and account history, to the management office and provide the ability to request repairs and maintenance online and to receive up-dates on progress.

The Owners Incorporation Minutes will be online, along with the opening times and booking procedures for the tennis courts, the swimming pool, and so on. Bulletin boards and an active dialogue area will provide the arena for input, comment and discussion of any issues to do with the property so that your building really will become a self-contained community.