OpinionLeung's housing policies won't bring down prices

Since taking office in July, Chief Executive Leung Chun-ying has been plagued by scandals involving either him or his senior officials. He was found to have illegal building works at his Peak home while calling for an end to illegal structures everywhere else. Then the newly appointed secretary for development, Paul Chan Mo-po, and his wife were found to have owned illegally subdivided flats. Chan's integrity has been called into question, yet the government has no intention of resolving the issue; instead, it is hoping the problem will fade away.

For all that has happened, Leung still refuses to admit fault or reflect on his mistakes. Instead, he blew his own trumpet with an article claiming that he and his team have engaged in real work and implemented effective measures to improve people's livelihoods. But that's not true.

It's apparent that Leung won the chief executive election because he had for years used the media to promote his policy ideas for land and housing. The public was misled into believing that, once in office, Leung would implement measures to bring down property prices and resolve the perennial housing problem.

But instead of tackling the problem, he and his team have been evasive on how to proceed on land and housing issues. He said yesterday that the government would roll out the so-called "Hong Kong property for Hong Kong people" scheme next year. But for now it only covers two sites.

And since Leung took office, local property prices have seen a rebound instead of dipping or stabilising.

After Secretary for Transport and Housing Anthony Cheung Bing-leung introduced the first measure to ease sale restrictions for government-subsidised Home Ownership Scheme flats, the prices of these units, and public housing flats, immediately shot up. The government measure has inadvertently created a chain reaction that has also pumped up prices in the private sector and reignited interest in speculative activity.

According to market data, since Leung took office, local property prices have risen and market analysts are predicting a continuing rise. Meanwhile, a recent survey by Chinese University showed that 90 per cent of respondents believe the current property prices are unreasonably high and nearly 30 per cent believe prices will continue to rise in the coming year. In view of this, the Leung administration has no choice but to tackle the problem head-on. Leung announced a series of short- and medium-term measures last week in a bid to cool the overheated market. The premise of the 10 measures is to increase the supply of affordable housing units and land for housing. They seem to be reasonable measures, based on the principle of supply and demand. But it's not that simple.