An adviser to Chief Executive Tung Chee-hwa has rejected claims that more than 170,000 flat owners are saddled with negative equity. Executive Council convenor Leung Chun-ying also said it was not a big concern that more people were buying properties in Shenzhen. Mr Leung was referring to an earlier estimate of the problem of negative equity by the Liberal Party. He said the number of owners affected would be about 110,000, and possibly fewer. Based on information from the Hong Kong Monetary Authority, Mr Leung said flat owners on average had mortgaged about 60 per cent of the price of their properties, and some had mortgaged less. 'Most home owners would not mortgage their flats for 70 per cent,' Mr Leung said. 'A property agency estimated the number in negative equity was 170,000 if homeowners mortgaged their flats for 70 per cent. The number would drop to 110,000 if they mortgaged for 60 per cent.' According to Midland Realty, more than 115,000 people who bought flats between October 1996 and April 1998 now find themselves in negative equity. Mr Leung said: 'The message that some homeowners suffer from negative equity will undermine the atmosphere of the property market to some extent.' He said the SAR economy had recovered and he was optimistic about the property market. But property prices would be the last sector to rebound. 'It's not like buying stock, when people can spend a small amount of money to buy some shares,' he said. 'Those who are considering buying a flat will think much more carefully.' Mr Leung dismissed the assumption that the proposed 24-hour, cross-border checkpoint would undermine the property market. He said only a small number of people would move to Shenzhen. Citing the allocation of secondary school places as an example, Mr Leung said it was almost impossible for families with children to move to Shenzhen. 'Parents already complain a lot when their children are allocated a secondary school place in another district,' he said.