'People are also dissatisfied with political reform, the government's attitude to public opinion, and a widening wealth gap. The policy address says little on these aspects,' Ma said.

Ivan Choy Chi- keung, a political scientist at the same university, criticised the U-turn on building subsidised homes for sale.

'Tsang had said repeatedly that the government would not do this,' he said. 'The move gives an impression that he bowed to pressure from Vice-Premier Li Keqiang and director of the Hong Kong and Macau Affairs Office Wang Guangya , who told him to pay attention to social grievances stemming from housing needs.'

Housing, identified as the most pressing issue for Hong Kong people as property prices soared, was the focus of the policy address.

Tsang proposed relaunching the Home Ownership Scheme to help families with a monthly household that is less than HK$30,000 buy modestly-sized homes at an affordable price.

More than 17,000 flats will be made available, but the first batch of 2,500 will not be available until 2016. Small flats with a saleable area of 400 to 500 square feet will be sold for between HK$1.5 million and HK$2 million.

Tsang said the scheme, which would offer flats in Sha Tin, Tsuen Wan and Yuen Long, could be halted at any time if the government found there were already enough reasonably priced small and medium-sized flats on the market.

Buyers would have to pay the Housing Authority a premium if they wanted to sell their flats.

A separate rent-to-buy subsidy programme - the My Home Purchase Scheme - will be tweaked to allow families earning up to HK$40,000 to buy flats outright. Those who rent first will be able to buy their flats at a capped price to ensure affordability.

Hans Mahncke, a City University law professor, said Tsang was right to revive the Home Ownership Scheme, but '17,000 units - that looks like the maximum they will build for now - is nowhere near enough [to meet demand].'

'It won't do much really, just a window-dressing exercise,' he said. 'You don't know where you stand. It has all the hallmarks of a lottery,' Mahncke said.

In an apparent move to appease young protesters who are becoming more vocal on social and political issues - especially what they term the 'hegemony' of property developers - the government said it would support proposals from three non-profit organisations to build 'hostels' for single people aged 18 to 30.

'The project, involving no public money, aims to help well-educated young people who want to be independent from their parents but cannot afford to rent a private flat,' a government spokesman said. They could rent the flats with their friends or brothers and sisters, he said. The scheme was not aimed at the poor or the homeless.

Details of the scheme, such as the number of flats and whether those wishing to live there will undergo a means test, will be decided by the organisations later.

Tung Wah Group of Hospitals is considering using its land to build flats under the scheme.

But Chan Kim-ching, a 27-year-old activist who campaigned to save Queen's Pier and Tsoi Yuen Tsuen, the village displaced by the cross-border express railway, said the hostel plan was weird. 'Young people don't need NGOs' help and don't want to live in something like a student hostel with a curfew. We are discontented not just because of housing needs, but because of the property hegemony and the lack of variety in jobs and businesses, a problem caused by high rents,' Chan said.

Noting that 'our population is rapidly ageing', with post-war baby boomers expected to push the number of people over 65 from about 900,000 to 2.1 million by 2030, Tsang listed numerous welfare measures related to the elderly.

One would allow Hong Kong people over 65 living in Guangdong to receive the HK$1,035-a-month Old Age Allowance or 'fruit money', without spending at least 60 days a year in the city, as now required.

The proposal, which follows repeated calls for such a move to help elderly people who have difficulty meeting the 60-day rule, would take effect in mid-2013. The Society for the Aged estimates 115,000 elderly Hong Kong people live in various parts of the mainland.

To help elderly people live at home rather than in institutions, Tsang suggested community care vouchers to subsidise services for those needing long-term care.

Also from 2013, people aged 65 or over and those with disabilities will be able to travel anywhere at any time on MTR trains, buses and ferries for a flat fare of HK$2.

Proposing the measure, which follows repeated criticism from welfare groups of existing concessionary schemes, the government said it would reimburse operators 'on an accountable basis' for the new fares.

However, the chief executive said: 'We will request the operators continue to absorb the cost of the existing concessions that they voluntarily offer to the elderly and people with disabilities.'

With soaring food prices causing hardship for low-income families, the chief executive said another HK$200 million would be allocated to help food banks improve the variety and freshness of the food they offer.

23,500

The number of Home Ownership Scheme flats completed in 2000-01, the most ever

Source: City University Housing Statistics