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SCMP Reporter

BOTH the Hong Kong and Chinese governments moved yesterday to begin implementing measures to cool property speculation and bring flat prices back to affordable levels.

  A top Chinese official revealed that Beijing intended to ensure that another huge slice of land would be made available this year for the construction of homes.

  Chinese delegates on the joint Land Commission were yet to reply to this year's land programme submitted by Britain earlier this year.

  The supply of land has been singled out as the most important measure capable of taking the heat out of the property market, which has seen speculators push home prices far beyond affordable levels.

   A deputy director of the State Council's Hong Kong and Macau Affairs Office, Chen Ziying, indicated no less than 100 hectares would be approved this year.

  The Hong Kong Government, which has also pledged to release more new land for development, yesterday suggested that measures might be taken to speed up the construction of flats on existing sites rezoned for residential use.

  It warned that construction firms might be forced to finish re-development projects within three years if evidence of hoarding were discovered.

  The Acting Secretary for Planning, Environment and Lands, Canice Mak Chun-fong, said the three-year requirement at present applied only to new land.

  ''If we find developers are holding up land after approval is given to change its use and to redevelop the area, we will extend the building covenants which require construction to be completed within three years,'' he said.

  Moreover, if the developer of a redevelopment project wanted to sell flats before construction was completed, he might be subject to the same restrictions as developers of new land.

  ''Through a consent scheme, the Government can make sure the pre-sold flats are completed according to schedule. This will reduce room for speculation by such means as holding up the construction of a certain number of flats to inflate prices,'' Mr Mak said.

  More than 130 hectares of land, 60 per cent of the land supply last year, came from re-development.

  If China approves at least 100 hectares of new land, the supply for the year would be more than double the 50-hectare limit stipulated in Annexe Three of the Joint Declaration.

  And it would be the third consecutive year that Beijing has agreed that the land grant should substantially exceed the limit.

  The land grants for 1992/93 and 1993/94 were 159.3 hectares and 127.8 hectares respectively.

 All new land must be approved by the Land Commission and half the money goes to the Land Fund, which is for the use of the Special Administrative Region government after 1997.

  Mr Chen called on the Hong Kong Government to cool the heated property market and inflation.

  ''Not long ago, Governor Chris Patten said he would act to suppress the prices of consumer goods and property. We look forward to the practical and viable proposals he is going to make,'' he said.

  It would take some time for the Chinese delegates on the Land Commission to study the British proposals which carried detailed information on individual sites, said team leader Chen Rongchun.

  Despite the fact that the land body would normally meet in March, the Chinese chief told the PWC that last year's session was held in May and there were no hard and fast rules on meeting dates.

   Leader of the Chinese Land Commission team, Mr Chen Rongchun attributed spiralling property prices to the economic boom in Hong Kong and southern China, according to a Preliminary Working Committee (PWC) economic sub-group member, Tam Yiu-chung.

  He did not refer to hoarding of completed flats by developers or to speculation by China-funded companies, Mr Tam said.

  The director of the State Council's Hong Kong and Macau Affairs Office, Lu Ping, has criticised China-funded enterprises' speculation in Hong Kong's property market.

  Mr Tam quoted Mr Chen Rongchun as saying it was estimated that China-funded enterprises' market share in property transactions had been six per cent.

  Mr Mak said the Government was surveying large housing projects completed in recent years to find out the vacancy rate and the length of time of vacancy.

  ''We think many vacant flats are in the hands of speculators rather than developers. This is mainly due to the economic factor - that many people want to put their money into property as it is a good investment.

  ''Whatever measures we take, we will be very careful to balance individual rights to own property and the public concern on flat hoarding,'' Mr Mak said.

  He said the Government would, in two months, come up with a package of comprehensive measures to bring down property prices.



United Front in flats battle