Hong Kong has followed the examples of Singapore and Australia by announcing a scheme to build homes for the exclusive ownership of local residents. But analysts question whether the scheme can cool the overheated property market. Last week the government announced a "Hong Kong property for Hong Kong residents" policy and said it had selected two sites in Kai Tak to pilot the scheme. The flats built on the sites may be sold only to Hong Kong permanent residents, for 30 years. The government said the policy aimed to stabilise property prices that have soared in recent years on an influx of mainland buyers. Australia has a similar policy on restricting foreigners from buying homes in the secondary market, but not the market for new houses. Its Foreign Investment Review Board stipulates that foreigners must get government approval to buy homes in the country. Approval will be granted to buy vacant land, existing residences for redevelopment, and new properties; but foreigners may not buy residential properties that have already been occupied. The objective of the policy, the Review Board said, was to ensure foreign investment in property increased the supply of homes, and was not speculative. In Singapore, foreigners are restricted to buying "non-landed properties" - flats - rather than free-standing houses with their own land titles. The only exception is bungalows at Sentosa Cove, the island connected to the southern part of Singapore. In December, the government also imposed a 10 per cent stamp duty on foreigners buying flats. Still, Singapore's restrictions have failed to curb prices and the same outcome could await Hong Kong's scheme, analysts said. "Sales volume of Sentosa bungalows in Singapore fell, while prices kept rising in the first half of 2012," said Petra Blazkova, head of research for consultancy CBRE in Singapore. Joseph Tsang, managing director at consultancy Jones Lang LaSalle, said the provision of housing for the exclusive ownership of Hong Kong residents was unlikely to have a significant impact on flat prices. "The policy will not cool down the market as the sites could provide 1,100 flats only and they will not be available for release in the short run. Also, the sites may not attract developers to buy due to the restrictions. Mainland buyers still have a lot of choice," he said. Tsang agreed that the policy would make flats more affordable to local people on low incomes, but the products were similar to the existing Home Ownership Scheme flats. Eddie Hui Chi-man, a professor at Polytechnic University, said the new measures would have a mild effect on the market. "The government is selling about 30 sites a year, while only two sites will be sold with these restrictions," he said, adding that the government should release sites as the market dictated. Alva To, head of research at property consultancy DTZ, said mainland buyers in Hong Kong's mass and luxury residential markets accounted for between 5 and 20 per cent of all sales. "If we lost mainland buyers, local buyers would face less competition in buying homes. We would then not see the continued unreasonable growth in property prices of the last few years." Professional Property Services chairman Nicholas Brooke said restricting participation in any sector of the economy to domestic investors "runs contrary to the freedom of flows upon which Hong Kong has established its reputation".