Analysts wrote the obituary on government intervention in the property market yesterday, but investors were more cautious. Despite glowing testimonials and upgrades on developers from the research community, stocks in the sector barely nudged. Perhaps investors were paying more attention to the fine print.
On Wednesday, Chief Secretary Donald Tsang Yam-kuen emphasised the Government was moving away from interventionism, backing up his words by reducing planned supply of Home Ownership Scheme (HOS) flats.
Mr Tsang went from telling the market that no more than 9,000 units would be offered each year when he announced a moratorium on HOS sales in September last year to announcing that only 2,400 units would be offered in September and possibly an additional 2,500 in April next year.
Beyond that, and until 2006, the number of units allocated will be dictated by market conditions. After 2006, supply will be capped at about 2,000 units a year.
He seemed to make it perfectly clear during his preamble on which side of the fence the Government is sitting.
'We are committed to allowing the free market, in the best traditions of Hong Kong, to play the fullest possible part in meeting the housing needs of the community,' Mr Tsang said.