Land supply to be fine-tuned, if needed
Prices of mass-market flats were still below their 1997 peak, the chief executive said, as a luxury flat sold for a world record price. Still, the government would fine-tune its land supply arrangements if the need arose.
In his policy address, Donald Tsang Yam-kuen said the recent high prices had caused concern over the supply of flats and the possibility of a property bubble. But he said the prices of flats outside the luxury sector were still lower than in 1997. Government Economist Helen Chan said prices today were still 25 per cent below those 12 years ago.
Tsang said: 'We see prices for luxury apartments have been soaring, but only a small number of people are buying such flats, and [the increase] doesn't affect the general public. I don't care about the [prices of] luxury flats ... but I am very concerned about [prices] for flats that are for the general public.'
He said the government monitored property supply, transactions and prices daily. The land application system (under which developers are invited to bid for sites the government lists as available and an auction for a site is triggered if a bid is close enough to the government's minimum price, which it does not disclose) had been effective, he said, but the government would fine-tune it if needed. It was also discussing with the Urban Renewal Authority and MTR Corporation to bring readily available residential sites to the market sooner.
Sun Hung Kai Properties vice-chairman and managing director Thomas Kwok Ping-kwong said any fine-tuning of land supply arrangements would be welcome.
Tsang ruled out resuming regular land auctions or restarting the Home Ownership Scheme, under which the government built flats for sale at subsidised prices to families too poor to buy private flats, or resuming the provision of subsidised home loans.
'There are citizens who are waiting to buy a property, but there are also people who are flat owners. We have to take care of both of them. It's difficult for the government to boost flat prices, but it's very easy for us to push them down.' he said. Some New Territories flats were already cheaper than those in Shenzhen.
Chan said the price of a 500 sq ft flat was equal to 7.6 times median annual household income. The figure is similar to the average for the past 20 years, although the World Bank's global standard is four years.
Tsang's comments came as a 6,100 sq ft duplex in Mid-Levels, developed by Henderson Land, sold for a world record of more than HK$71,000 per square foot.
Dr Lawrence Poon Wing-cheung, of the Hong Kong Institute of Surveyors, said the government's arguments were reasonable since the recent market fluctuations were caused by investment-related factors.
