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SCMP Reporter

THE Government yesterday released its far-reaching but watered-down review on property price stabilisation, pledging to provide enough extra land supply to cater for an additional 45,000 to 60,000 flats over the next six years.

  It also announced a string of anti-speculation measures, springing just one surprise - a ban on re-sale of unfinished flats before assignment, normally about three months after the occupation permit is issued.

  Real Estate Developers Association of Hong Kong spokesman Leung Chi-kin described this as the ''killer weapon'' that would kick the majority of speculators out the market.

  However, the Government refrained from introducing a controversial punitive increased stamp duty or capital gains tax on transactions, at least for now.

  The Government said it did not want to do anything that might make property prices crash and noted that average home prices had come down between 10 and 15 per cent since the review began two months ago.

  In presenting his package to the Legislative Council yesterday, the Secretary for Planning, Environment and Lands, Tony Eason, said: ''Some may see our package of measures as not tough enough, others will see it as too interventionist.

  ''We believe it strikes a fair balance at this stage. However, no one should under-rate our determination to keep the problem under close scrutiny and come back with further measures should the situation require.''   To meet its commitment to provide an additional 45,000 homes by the year 2001, the Governor's special inter-departmental taskforce has earmarked up to 70 hectares of land in Hong Kong Island, Kowloon and the New Territories for residential development.

  It hopes to allocate some 15 hectares of this land this year and next, subject to agreement by the Land Commission.

  Mr Eason said the administration would continue to monitor demand and supply, and seek the allocation of the remaining 55 hectares over the next two years as and when appropriate, again subject to Land Commission approval.

  The taskforce noted that an agreement with the Chinese side over the financing of Chek Lap Kok core airport and infrastructure development programme would make available 24,000 flats along the proposed airport railway between 1997 and 2001, and would therefore also be a welcome contribution to the solution.

  Within the minimum target of 45,000 flats, the aim is to produce 20,000 public housing units for both rental and home ownership, 10,000 sandwich class housing flats for middle income earners and 15,000 private domestic flats.

  This is in addition to the Housing Authority's own efforts to provide up to 13,000 flats on in-fill sites.

  As part of its widely expected action package to dampen property speculation, the Government has struck out at lucrative internal trading by developers, slashing the quota for private sales of uncompleted flats from 50 per cent to just 10 per cent.

  This would release up to 10,000 more private domestic flats directly to home-buyers each year.

  Mr Eason said maintaining a residual 10 per cent was considered a reasonable balance between the interests of the buyers and developers.

  He also moved to restrict forward sales to not more than nine months before the date of assignment, thus limiting the time available for speculation.

  And the minimum initial deposit paid to developers on new flats will be raised from five to 10 per cent of purchase price, meaning speculators will have more initial stake money to find.

  To discourage speculation in car-parking spaces, no forward sale of car-parking spaces will be allowed unless they are sold with the residential units.

  Would-be home-buyers did not seem over-excited by the package last night, with some saying the Government should do something to persuade the banks to give out higher mortgage loans.

  United Democrats of Hong Kong legislator Lee Wing-tat said the Government should focus more on the purchasing power of people rather than the level of exchange in the market.

  ''Only to limit the exchange rate in the market doesn't mean that the public will be better off,'' he said.

  Pro-China legislator Tam Yiu-chung said the modest measures taken by the Government would spark speculation again.

  He criticised the Government for diverting the burden of curbing property speculation to the Sino-British Land Commission.

  Salomon Brothers property analyst George Kee said some buyers might come back in to the market. ''With this kind of package we don't expect any drop in prices,'' he said.

  The Association of Democracy and People's Livelihood legislator Frederick Fung Kin-kee said the package would only discourage individuals from engaging in speculative activities.

  Mr Fung said the measures, which aimed only at increasing the cost of investment, would not hinder big corporations from making money through the property market.

MAIN POINTS To curb speculation Quota allowed for internal sale by developers cut from 50 to 10 per cent Ban re-sale of uncompleted flats Start pre-sale later Deposit doubled to 10 per cent Forfeiture amount raised from three to five per cent Possible punitive tax on short-term re-sale and hoarding To supply more flats 60,000 more flats over next six years Expedite plans for redevelopment To supply more land Release 70 more hectares of land in next four years Build a land reserve of 50 hectares Accelerate the development of infrastructure Consumer protection More information on pre-sale flats and future supply Statutory control on estate agents Other measures Re-establish Hous ing Secretary Review of land auctions 



Property package clamps ban on resale of unfinished flats