The chief executive underscored his administration’s determination to solve problems such as the long waiting time for public flats, tiny living spaces, poor conditions in subdivided flats and continuously low birth rate.

“We will reach the goal as long as we are willing to take the first step and continue to move forward.”

Against the backdrop of slumping real estate and stock markets, Lee announced the government would ease the main curbs on property transactions introduced a decade ago to rein in rampant speculation, in a bid to stimulate sales depressed by the economic outlook and higher interest rates.

Effective immediately, Lee said, the government would halve the buyers’ stamp duty for non-permanent residents and the new residential stamp duty for homeowning locals purchasing additional properties, bringing both down to 7.5 per cent from the previous 15 per cent.

The special stamp duty, equivalent to 10 per cent of a home price, would also be waived immediately for buyers reselling their property after two years, reduced from the original three years, he added.

At a press conference later, Lee noted that the property market had been hit by higher interest rates, economic uncertainty and gloomy sentiment, arguing he had struck the right balance.

“It is important at one stage when we do any change or relaxation we maintain stability in the market. Considering all factors, I think what I have introduced is a right mix of measures of some being retained and some being relaxed,” he said.

Lee added that he had held a thorough discussion with Financial Secretary Paul Chan Mo-po to reach a consensus on wanting to achieve the best outcome.

In a bid to enhance the competitiveness of the stock market and boost liquidity, Lee restored the stamp duty on securities transactions to the 2021 level at 0.1 per cent of the value of the trade for both buyer and seller, down from the current 0.13 per cent.

On a significant note, he devoted a substantial part of his speech to ramping up Hong Kong’s cooperation with the Greater Bay Area, stressing the need for greater tourism and business connections with neighbouring Shenzhen and more leveraging on wider exchanges and development opportunities.

A year after his ambitious drive to “trawl for talent” following the double whammy of the 2019 social unrest and the Covid-19 pandemic, Lee on Wednesday vowed to intensify efforts to bring in more skilled workers as well as to develop a “headquarters economy” by attracting overseas enterprises to set up main offices in Hong Kong.

A key measure would allow foreign staff of companies registered in Hong Kong to apply for a single visa for multiple entries into the mainland, enabling them to use the city as a gateway to China’s larger market.

The government would also relax visa requirements for talent from Vietnam, along with visa policies for Laotian and Nepalese talent working, training or studying in the city.

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Hong Kong halves buyer’s stamp duty for non-residents as part of measures to boost economy

Hong Kong halves buyer’s stamp duty for non-residents as part of measures to boost economy

With Hong Kong’s birth rate at its lowest level and the average parity of couples dropping to a record low of 0.9 in 2022, Lee introduced a raft of measures aiming to promote fertility even as he conceded that research worldwide had proven government actions alone would not substantially persuade people to have children.

He introduced a one-off “newborn baby bonus” of HK$20,000 for each child born on Wednesday or after to a permanent resident parent, a measure set to last for three years.

Families with newborns would be given priority to purchase their own government-subsidised flats, with an additional 10 per cent of homes reserved for them, he said, while their waiting time for public rental flats would be reduced by one year, effective from April next year.

Expressing support for residents using assisted reproductive technology, Lee said the Hospital Authority would increase the annual quota for in vitro fertilisation by more than 60 per cent, to 1,800 from the current 1,100 over the next five years, alongside granting them a maximum HK$100,000 personal tax allowance.

“Residents will not change their decisions on giving birth based on the government’s measures, but I believe our overall guiding principle would still have a certain impact,” he said. “Previous administrations have not done anything in this regard, but I decided to do it. I hope society will understand clearly that boosting the birth rate is beneficial to the city as a whole.”

John Lee’s measures to boost Hong Kong birth rate still fall short, experts warn

On the housing front, Lee said the government had already identified enough land to build about 410,000 public flats in the coming decade, a surplus of around 100,000 homes, while the city was also on track to meet the target of reducing time on the waiting list to 4½ years by 2026-27.

With Beijing officials urging the city to get rid of its notorious subdivided flats and cage homes which currently house about 220,000 people, Lee said a new task force would be set up and led by Deputy Financial Secretary Michael Wong Wai-lun to study the problem and submit the findings in 10 months’ time.

Lee, however, did not specify a concrete timetable for the eradication of homes deemed unfit for living in.

He ended his lengthy speech by noting the frustration some residents had over “others’ unfounded criticisms of Hong Kong” and called on them not to be “put off by their negativity”.

“The spirit to strive, and to triumph, is in our blood,” Lee said. “Hong Kong has many strengths. We should treasure them, without inflating our ego. In face of competition, we should never be complacent; we should not be frustrated or doubt ourselves when we lag behind.”

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Gary Chan Hak-kan, chairman of the Democratic Alliance for the Betterment and Progress of Hong Kong, welcomed Lee’s second policy address as a “holistic and proactive” blueprint aligned with residents’ major concerns.

“We see this policy address as a proactive one, showing the government’s sense of responsibility and strategy for the city’s development. There are plenty of concrete suggestions,” Chan said.

But Kelvin Sin Cheuk-nam, an executive committee member of the opposition Democratic Party, said the policy blueprint lacked a clear direction for the city’s economic recovery and failed to address Hong Kong’s unique factors for development.

The opposition party found the government’s birth-rate incentives insufficient to tackle the lack of motivation among young couples to have children, arguing that a wider change in the social atmosphere was needed to reverse the trend.