The initiatives were given much weight in Leung’s annual agenda-setting speech yesterday.

Plans are afoot for a pilot scheme offering subsidised Housing Authority flats that will be cheaper than HOS flats, which on average go for 70 per cent of market prices. More than 700,000 tenants of public rental flats are estimated to be eligible.

The government will also urge the Urban Renewal Authority and private developers, including the Hong Kong Settlers Housing Corporation, to provide subsidised flats.

“High property prices decrease the public’s relative ability to purchase a home and result in a marked increase in demand from low- and middle-income families,” Leung said.

“We must therefore actively explore ways to increase the supply of sale flats through a multipronged approach by engaging public or non-profit-making organisations.”

Earlier, Leung had pledged to provide 480,000 new public and private flats in a decade.

Currently, the city’s sole form of subsidised housing for sale comes from the Housing Authority, which is a government body, and the non-profit Housing Society. But the prices of the authority’s HOS flats are tagged to the stubbornly bullish property market. Housing officials declined to reveal the prices and location of the new subsidised alternative.

The second property ladder comes in the form of the revived Sandwich Class Housing Scheme, scrapped in 2000.

This scheme, which is competitive to private flats in terms of home quality and price, targets buyers too well-off to qualify for the HOS. Hours after Leung’s speech, URA representatives met Secretary for Development Paul Chan Mo-po and all agreed to earmark part of its Kai Tak development, named De Novo, for this scheme.

It was understood the URA lined up about 300 De Novo flats for sale at subsidised rates. These made up two of the four blocks on the estate, to be completed by August, a source from the authority said. The other two blocks will house residents displaced by redevelopment, as planned.

Democratic Party lawmaker James To Kun-sun, a former URA board member, was concerned this might confuse the role of the authority, which took care of urban redevelopment. Subsidised flats could come from the Housing Authority or Housing Society.

According to the source, the four legislators on the board, all from different political groups, told Chan they would approve the government’s funding request for the scheme, since it had laid out a clear and long-term policy about the plan.

But Sammy Po, chief executive of Midland Realty’s residential department, expected the 300 De Novo flats to have minimal impact on prices. “Compared with a total of 80,000 flat transactions a year, it is only a tiny figure.” Po said the effect would be more pronounced if 10,000 flats or more a year were offered.

The corporation, a non-profit-making group formed by prominent figures including tycoon Lee Shau-kee, it is seeking government approval to redevelop its Tai Hang Sai Estate in Shek Kip Mei into about 5,000 subsidised flats for sale. The estate is the only one in the city granted by the government for a private party to build low-cost rental housing. The existing 1,500 households must be resettled.

To meet Leung’s 10-year target, the Housing Authority will sell 2,700 subsidised flats in Long Ping and Sha Tin this year, followed by 2,000 in Choi Hung and Mui Wo, Lantau, in 2016/17. The government will give the society sites in Tseung Kwan O and Tuen Mun, to build 600 subsidised homes by the next financial year.

Meanwhile, six green groups were concerned Leung’s remarks on the causes of the housing shortage – he cited the zoning of a substantial amount of land as country park or for other non-development uses – might be a precursor to building on the parks.