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Developers' tactics could fall flat

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Property developers have hardly made themselves popular in the past few years. First they pushed flat prices to exorbitant prices during the pre-handover boom. Then, when Tung Chee-hwa set out to rectify this with his 1997 blueprint to boost supply, with an 85,000 flats a year target, they pressured him into putting such plans on the back-burner, provoking a fury within the administration.

'We were stabbed in the back by the big developers,' recalled one top official. He claimed some had even lobbied Beijing, in order to increase the pressure on Mr Tung to change course over housing policy.

Now some of the big developers are at it again, although so far there is no sign of them running off to Beijing. On Monday, Hong Kong's richest tycoon, Henderson Land boss Lee Shau-kee, called on the Government to stop building cheap flats which - horror of horrors - might compete with those he and other private developers try to sell.

That was only the latest shot in what seems to be a renewed campaign by the tycoons to exact yet more concessions. Ten major developers have joined together to demand that the administration rethinks its plan to build 50,000 public flats a year as part of the 85,000 target.

Real Estate Developers' Association chairman Stanley Ho Hung-sun called for this to be cut to 40,000, and said most should be rental units, which do not compete with the private market. This fresh onslaught left officials bemused.

'I don't know why this question was raised again,' said a surprised Financial Secretary Donald Tsang Yam-kuen.

After all the Government has already done a lot to appease developers. Land sales were suspended for nine months and the 85,000 flats figure abandoned in all but name.

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