A group of young people are urging the government to introduce further measures to put a curb to soaring property prices. They are also calling for policies to help them buy homes. In a recent meeting with the undersecretary for transport and housing, Yau Shing-mu, the group said housing prices were now beyond their reach. They also expressed concerns that recent government measures to cool the property market may not work. The measures announced last month include a ban on resales of new flats before the initial transaction is completed. It also announced the conversion of 20 hectares of industrial land for residential use. The government and the Hong Kong Monetary Authority also banned quick resales of flats, vowed to put more land on the market and crack down on mortgage lending for top-end properties amid evidence previous measures have not worked. Banks have been told to cut loans to luxury homebuyers and property investors from the current 70 per cent of a property's value to 60 per cent. The government said the tighter lending rules will apply to properties costing HK$12 million or more and all properties not for self-use. The measures are aimed at curbing speculation, particularly in the luxury market. Analysts say high property prices have largely been fuelled by a strong increase in the prices of top-end flats. Growing demand from mainland buyers is one of the main reasons. Now the surge in prices has spread from luxury flats to small-and middle-sized flat markets. Officials also pledged to put more lots up for auction to increase the supply of land and cool the market. Home prices have surged about 45 per cent since the beginning of last year, according to surveyors and agencies. Property developers say the supply of land for new flats is too low. Under the present system, developers can only buy new plots at government land auctions. An auction takes place only when a developer submits an asking price that matches the price the government has allocated for the plot. But those prices are undisclosed and developers say it is not easy to trigger an auction, leading to the limited supply of land. The petitioners said they hope the government can offer help, whether in the form of a subsidy, a discount from market-level prices for government built flats or a zero down payment. But assistance for home purchases is controversial, raising the question as to whether the government has a responsibility to subsidise prospective homebuyers. Advocates say incentives to homebuyers can help stabilise low and middle-income groups because home ownership is seen as a right to most Hongkongers. Critics say property is a commodity and subsidising homebuyers is an intervention in a free market. In Hong Kong, people who cannot afford to buy a flat can apply for public housing. But the supply of public flats is limited. Applicants' income must be lower than a certain level and usually they have to wait three years before they can rent a public flat. Subsidised flats are currently available through the Housing Ownership Scheme (HOS). This provides housing for people whose incomes are too high to apply for public housing but not high enough to buy a flat themselves. But no more flats have been built under the HOS since 2003. Vice-chairman of concern group Professional Commons Kenneth Leung Kai-cheong said the government has the responsibility to help people who are too rich for public housing but cannot afford private flats to buy homes. He said one way to help them is to resume building HOS flats. 'Owning a home has long been regarded as one important criterion for a happy life in our culture and it is also an upward driving force for a society as a whole. People in Hong Kong work with greater efficiency when they own a home.' Leung said property prices now have been rising so sharply that average people cannot catch up unless the government launches subsidising measures. 'Property prices in recent years have surpassed the 1997 level, which was the peak of the property market bubble. But at the same time, the average household income was only HK$17,500 in the first half of this year, down from HK$19,000 in 1997,' he said. But Shih Wing-ching, the founder of property service firm Centaline Group, has reservations about such a move. He said it is not a government's duty to help everyone buy a flat. 'It is not part of the government's responsibility to help people invest.'
