Efforts to suppress Hong Kong property prices have failed, Carrie Lam says

Chief executive-elect Carrie Lam Cheng Yuet-ngor has admitted that efforts to suppress Hong Kong property prices have failed and pledged to tackle the issue with a “starter home” scheme once she assumes office.

As home prices rose in Hong Kong for the 11th consecutive month in February to an all-time high, Lam said the private property market had left behind ordinary Hongkongers.

“In the meantime, money keeps flowing in from other places – from London, from New York,” Lam said during a radio show yesterday.

“I’m afraid it may not be feasible to suppress prices. And doing so further will have side effects ... So providing more public housing will be the key.”

The government raised stamp duty for the second time in three years last November to 15 per cent in an effort to curb market speculation and soaring real estate prices.

Lam said one of her priorities in assuming office in July would be to launch the “starter home” pilot scheme promised in her election manifesto. She said there were one or two larger plots in this year’s land sale programme that might be suitable for the scheme.

She also proposed a “public-private partnership” scheme, which would see developers instead of the Housing Authority taking up the construction of public housing projects.

The “starter home” project was aimed at helping Hongkongers who were too wealthy to apply for public housing but unable to afford a private flat, she explained.

The chief executive-elect also hopes to reach a citywide consensus on how best to increase Hong Kong’s land supply. She said the public would be asked to consider different options such as land reclamation from the sea and developing parts of country parks or brownfield sites.

Meanwhile, Lam also revealed she had spoken with some pan-democrats about the formation of her cabinet. She called on political parties not to bar their members from joining the government at this stage.

She admitted it was difficult to find talent to join the cabinet: “People describe the government as a hot kitchen. I feel the temperature is ever rising.”

“I once had a nightmare that I did not have enough people to swear in on July 1,” she joked.

Talent will be tapped from existing and retired ministers and civil servants, and those outside the government.

Lam also apologised for not informing some media outlets when she chose to sign a declaration at TVB City on Friday stating that she had no political affiliation. It is a procedure required by law to be followed openly.

She said she thought it was “convenient” to allow the media to cover the signing of the declaration after attending a programme at the television station.

She said she did not hold the ceremony at her office because it is currently located in a private commercial building and she did not want media coverage to affect other tenants.