Property is no longer the goose that laid the golden egg for development tycoons and thousands of smaller speculators, but it continues to figure in the public consciousness as if it played the same crucial role in the economy as it did before the financial crisis. House prices have fallen more than 50 per cent from peak levels in 1997, but no one can say confidently the slump is over. The plunge has hurt both developers who have unsold flats, and families with flats where the market prices are only a fraction of their mortgaged values. That has prompted the property industry to pressurise the Government to do something to boost sales. Yesterday, even legislators questioned Financial Secretary Donald Tsang Yam-kuen about the state of the market and whether the Home Ownership Scheme should be cut back further to bolster the sale of private flats. Admitting that the Government's involvement in the property sector was already 'very deep', Mr Tsang warned against further intervention. That is encouraging news. What has been going on over the past two years is a necessary correction in the market, one which should help to increase Hong Kong's competitiveness. When property values assume realistic proportions and commercial rentals fall to affordable levels, Hong Kong should become more attractive to investors seeking a base in Asia. Now that the mainland is poised to enter the World Trade Organisation, more foreign firms may wish to set up in the territory. However, if rents remain near Wall Street levels, that could prove a significant disincentive. Developers should be told that the private housing market can be propped up no longer. The public should realise that rising property prices eventually hurt the economy. There may be a case to scale back the Home Ownership Scheme, but we must also bear in mind that many of those who qualify for such homes are not necessarily potential private buyers. Even if they manage to save for a larger deposit, they may lack the income to keep up higher mortgage payments. More importantly, the SAR has to find a new economic base if it is to prosper in the future. That is why the Government is laying such stress on value added services, developing high-technology industries, and embarking on education reforms. The property sector will always prosper where land is scarce and the population growing. It can look after itself during the lean years. Further intervention could reduce the SAR's credibility and its credit rating. The Government's task is to spur on diversification to put the economy back on the road to sustainable and soundly based economic growth.