Taskforce aims to cool prices, find more land for homes

PUBLISHED : Wednesday, 13 April, 1994, 12:00am
UPDATED : Wednesday, 13 April, 1994, 12:00am

A RANGE of measures aimed at simultaneously cooling Hong Kong's runaway property market while boosting supply are the priorities of a high-powered taskforce set up by the Government yesterday.

But the Government has snubbed the market's leading developers, analysts and real estate consultants by refusing to include any experts from the private sector in the think-tank.

The omission of the private sector from the Taskforce on Land Supply and Property Prices was targeted for immediate criticism by property experts, including one who described it as a ''lost opportunity''.

They, legislators, the Consumer Council and other concerned groups outside the Government may put their views and make suggestions, but they cannot directly participate with the taskforce inquiring into a matter affecting the entire community.

The taskforce, chaired by the Secretary for Planning, Environment and Lands, Tony Eason, has been set a deadline of three months to advise the Government on how to make property in Hong Kong more affordable and available.

More public and private housing sites, a clampdown on speculation, the abolition of infrastructure constraints on new developments, a swathe through bureaucratic red tape and support for the Land Development Corporation and the Housing Society are among possible remedies in the taskforce's sights.

In a separate move, the Legislative Council Sub-committee on Property Speculation yesterday decided it would also make recommendations to the Government on how to attack spiralling prices.

It will ask the Government and the taskforce to provide it with information to make its own assessment of the problem and ways to combat it.

The sub-committee will canvass academics, developers, bankers and the Consumer Council for their views.

A combination of low interest rates, diminished land supply, a booming economy and galloping demand has seen property prices rocket to record levels, enriching speculators and prompting Governor Chris Patten to pledge action.

Speculators, estimated by the Society of Hong Kong Real Estate Agents (HKREA) to control more than 70 per cent of new flats, would be most affected and might stampede for cover if the proposed curbs bite, according to Morgan Stanley Asia managing director and leading property analyst Peter Churchouse.

''Speculators in gold, soyabeans, pork bellies or property are betting on something - that a set of circumstances will perform in future,'' said Mr Churchouse last night.

''This market is very volatile. If they see a reversal of circumstances in the reasons to buy in the first place, there could be a stampede in the opposite direction.

''The Government's actions will increase potential risk to the speculator. He will say, 'This game is not providing the easy money it used to, I may unload.' If there is a flood of this, it will drive prices down,'' Mr Churchouse said.

The taskforce members will include the Secretary for the Treasury, Secretary for Works, Secretary for Transport, Director of Lands, Director of Planning and Deputy Director of Territory Development.

Other members who will attend meetings on a ''need basis'' include the Secretary for Financial Services, Director of Environmental Protection, Director of Housing, Commissioner for Rating and Valuation, Commissioner for Inland Revenue, Commissioner for Census and Statistics, Land Registrar and the Government Economist.

But the lack of private sector expertise was criticised last night by Nicholas Brooke, senior partner of leading property consultants Brooke Hillier Parker and immediate past vice-president of the HKREA.

''Here was a chance to involve the private sector with a lot of good ideas reflecting its direct involvement in the market,'' said Mr Brooke.

''It's all very well for the Government to carry out a detailed analysis using their own people on a taskforce, but it is lacking the experience, professionalism and good ideas emanating from the private sector.'' Mr Brooke predicted more pain in the next two to three years for people unable to afford property because he said it would take that long for any results from the freeing of more land to take effect.

Liberal Party legislator Ronald Arculli said the Government should show caution in tackling sky-rocketing property prices.

''It should be careful to avoid making the property market collapse while curbing prices,'' he said. ''I don't think any members of the Legislative Council would want to see the market collapse.'' Asked whether he was confident that the inter-departmental taskforce would succeed in its aim, he said that would depend on what recommendations it decided to make.

A Government spokesman said the main terms of reference of the taskforce were to examine and make recommendations as to: The causes and size of the problem, having regard to the demand for and supply of housing and actual take-up of flats; The scope and means of providing more sites for public and private housing, including housing for the sandwich class; The measures to discourage speculation in the property market; The means of removing constraints on development of sites caused by lack of infrastructure and other problems and of bringing forward their development; The measures to hasten redevelopment, including speeding up processing of development proposals; and The ways of assisting the Land Development Corporation and Housing Society to expand and speed up their development and redevelopment programmes.