Property price curbs here to stay, says Leung Chun-ying

PUBLISHED : Tuesday, 15 October, 2013, 2:33pm
UPDATED : Tuesday, 15 October, 2013, 4:28pm

Chief Executive Leung Chun-ying on Tuesday said again that property market cooling measures would be maintained and no exemptions would be made for certain groups of buyers in order to maintain market stability.

The Leung government last October introduced the measures – a special stamp duty and a 15 per cent duty on overseas and corporate buyers on top of stamp duty – to curb speculation.

Legislators are now debating the two bills on the cooling measures, which have not yet been passed into law by the Legislative Council. But the taxes have already taken effect.

[The weekend buyers' queue] tells us that if the government adjusts ... or even scraps the measures, the property market will return to its status before their introduction
Chief Executive Leung Chun-ying

Leung, who was not taking part in the Legco debate, noted on Tuesday that transactions of second-hand flats had reached a four-month high over the past long weekend and some developers had offered rebates to wipe out the effects of the government’s cooling measures.

Leung also cited media reports that up to a thousand buyers at the weekend had queued up to buy flats at a luxury project in Kowloon, with close to 20 per cent of them coming from the mainland.

“This tells us that if the government adjusts or reduces the magnitude of the measures, or even scraps them, the property market will return to its status before their introduction,” he said.

“This is something we do not want to see,” Leung said, speaking before attending an Executive Council meeting.

He also said there were many prospective flat buyers who were willing to purchase when developers and flat sellers to cut their prices.

On Monday, an economist from Lingnan University, Ho Lok-sing, warned the measures could lead to a serious deficit for the government in the next financial year because it could slash one of its main income sources that is the stamp duty on property sales.

Ho said at a seminar held by a pro-free-market think-tank that the measures could shake the confidence of potential property buyers and foreign investors that might have a snowball effect in areas beyond the property market.