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Sandy Li

Financial Secretary John Tsang Chun-wah says the government will speed up land supply by offering nine residential sites for sale between now and June.
Tsang warned that the government  would adopt further measures to reduce the risk of a property bubble and excessive curb price growth.
The nine  sites would provide a total supply of 2,650 flats, of which 70 per cent would be small to medium-sized to meet demand from first-time homebuyers.
'I am deeply concerned that overall property prices in February have surpassed the peak in 1997. I shall pay close attention to developments in the property market,' Tsang said. 'I shall not hesitate to introduce further measures to reduce the risk of a property bubble as and when necessary.'
 Home prices show no sign of abating even after the government last November announced an increase in stamp duty on homes resold within two years. The duty was set as high as 15 per cent if a home was resold within six months. 
The Hong Kong Monetary Authority also reduced the amount banks could lend to buyers of homes worth HK$12 million or more from 60 per cent to 50 per cent of the price.
 Tsang said property prices had picked up again early this year, with an accumulated increase of 7.2 per cent in the first two months.
The average home price in Hong Kong, according to Centa-City Leading Index which monitors sale prices on 86 large housing estates, is just  3 per cent below the peak level in 1997. 
The index climbed to 98.15 points in the middle of last month before retreating to 96.98 points from March 28 to April 3, compared with 100 points at the July 1997 peak.
 Besides the nine residential sites put up for auction and tendering in the coming quarter, the government will also release three commercial and hotel sites for tender in May and June.
Secretary for Development Carrie Lam Cheng Yuet-ngor said the 12 plots of sites, nine residential and three commercial, would provide an estimated 2,650 residential flats. 'The [government's] determination to increase land supply is undoubtable,' she said.
 Midland Surveyors estimated the nine residential sites would fetch a total of HK$21.27 billion when they were put up for sale.
This month, three small residential sites in Hung Hom will be released for auction and tendering, while another three residential sites and two commercial plots are slated for next month. Four sites - three residential and one commercial - will be up for grabs in June.
 Charles Chan Chiu-kwok, managing director at Savills Valuation and Professional Services for Greater China, said an increase in land supply would be effective.
'It is unlikely the government will introduce more administrative measures to intervene in the market. Short supply is the root problem for fuelling home prices,' he said. 
Ringo Lam, director for valuation at Wilkinson & Associates, shared Chan's views, saying the government was on the right track by accelerating the land supply.
 'More new supply in coming years will pose a psychological impact on the market,' he said. 
 Justin Chiu Kwok-hung, executive director of Cheung Kong (Holdings), said the move would help to ease the tight supply.
'Increase in land supply should not cause a decline in home prices,' he said, adding that residential prices would rise in line with the city's economic growth.
He said Cheung Kong would be interested in bidding for the luxury residential site at Borrett Road in the Mid-Levels.
Property consultants forecast the 1.05-hectare site at 21, 23 and 25 Borrett Road that commands views of Victoria Harbour would fetch HK$7.8 billion to HK$10.8 billion when offered for auction in June. 
Ringo Lam, who put a price tag of HK$10.8 billion for the Mid-Levels site, expects the winning developer would have to offer the flat for HK$50,000 to HK$60,000 per sq ft to generate a reasonable profit.



Land supply to speed up, says finance chief