Economists were wrong in claiming a property bubble existed, the housing chief said yesterday, pointing to prices outside the high end of the market.
'I can see no sign of a bubble. Property prices have not been increased drastically. We can see there is a rise in the prices of luxury units, but the rise in other units is not very high,' Michael Suen Ming-yeung said.
He also said land prices were determined by market forces and the government had no intention of instigating a high land-price policy.
Such fears surfaced this month when Cheung Kong (Holdings) paid $2 billion above forecasts for the former police officers' quarters site in Ho Man Tin. The developer paid $9.42 billion for the site - the highest land price fetched since 1997.
Mr Suen, the secretary for housing, planning and lands, also hit back at claims by developers that land supply in Hong Kong was insufficient. He said they had not bid for all available land.
'You can see that only five pieces of land have been sold in this year's land application list; 12 sites are still unsold.'
The application system is a list of properties from which developers can generate a sale with an initial bid that meets the government's minimum.
Mr Suen said the 12 pieces of land were of varying size and could be used to build luxury or mass-market properties.
The sites were across the city, including Repulse Bay, Tai Po and Tsuen Wan. 'Everyone can see that there is plenty of land supply,' he said.
Reporters suggested only 2,000 homes could be developed on the 12 sites, but the minister replied it was not a question of quantity.