Chief Executive Tung Chee-hwa yesterday gave assurances on property prices after the recent market turmoil.
'I do not think property prices will drop dramatically because there are real demands,' Mr Tung said, attributing the demand to a rapid growth in population.
He said it could only be good if a 'soft landing' for property prices was achieved.
Mr Tung said measures outlined in his policy address would not be hurt by the market upheaval.
'The policies in my policy speech have to be quite conservative. I do not believe they will be affected,' he said.
But he was cautious about recent calls for a tax reduction in the next budget to boost the economy.
'The process of safeguarding our currency makes us feel the importance of a prudent budget,' Mr Tung said.