Hong Kong housing

Ring-fence quota of Hong Kong flats for locals, says expert

Restricting who developers can sell to would help first-time buyers, property guru says

PUBLISHED : Monday, 18 March, 2013, 12:00am
UPDATED : Wednesday, 26 October, 2016, 2:38pm

A veteran player in the property market has called for new clauses in land leases to restrict flat sales to local first-time home-buyers only.

Shih Wing-ching, co-founder of Centaline Property Agency, said his proposal would make flats more affordable for younger buyers without having too much adverse impact on the overall property market.

Shih floated the idea at a forum yesterday on the city's housing problems, held outside the government headquarters in Tamar, Admiralty.

"In some selected suitable sites to be put on offer, the government can add clauses in the land leases, stating that the flats to be built must be sold to Hong Kong people who are first-time home-buyers," Shih told the forum.

"The developers who have bought the land will have to consider the purchasing power of the perspective buyers. They won't be able to set the prices too high," said Shih.

He suggested that the government should offer about 10,000 such flats every year.

Chief Executive Leung Chun-ying has pledged to make housing a priority of his policy agenda. He promised to increase supply by offering more land, and to build more home ownership scheme flats and public rental units.

To cool the market, his administration has in recent months imposed two sets of measures to combat speculation and dampen demand.

Last month, the government doubled stamp duties for homes and non-residential properties valued at more than HK$2 million. Buyers of non-residential properties are now also required to pay stamp duty earlier.

The move came four months after the government announced additional stamp duties to cool demand from non-local and commercial buyers.

Three of the major banks - HSBC, Standard Chartered and Hang Seng - have also recently raised their residential mortgage rate on new loans.

In the face of a weakened demand because of the tougher measures, property developer Cheung Kong cut prices by up to 17 per cent of a residential project earlier this month.

Shih expected home prices to fall in the wake of the tougher measures, but said it was hard to estimate by how much.

He added that investors and speculators were beating a hasty retreat from the market.

Dr Stephen Hui, chief research officer of the Hong Kong Economic Development Strategy Studies Centre, also warned that the government's measures to cool the property market could harm the city's business environment.