The recent correction in Hong Kong’s property prices is the result of government efforts over the last three and a half years, Chief Executive Leung Chun-ying said in his fourth policy address at the Legislative Council on Wednesday.
“Our efforts over the past three and a half years have produced results. The housing supply has significantly increased and property prices and rentals have started to fall, reversing the perception that property prices and rentals can only go up,” he said.
“Since taking office, the current-term government has stated its determination to increase housing supply and curb property speculation and overheated investment. It has also reminded the community of the need to watch out for fluctuations in the property market caused by a long period of ultra-low interest rates and low supply.”
Without naming anyone, Leung blamed a “man-made shortage” and “vested interests” for the city’s unaffordable home prices.
“Neither should property prices be kept at a high level by generating a man-made shortage. The current property price and rental levels are still beyond what people can afford, and have distorted the values of the younger generation,” he said.
The chief executive pledged to continue addressing the housing problem head-on and not to concede.
But while it is the government’s responsibility to provide land and public housing to meet the needs of the people, it is not its duty to ensure that property prices can only go up, Leung said.
“Land is fundamental to Hong Kong’s social and economic development. What Hong Kong lacks is not land, but land that is developable. The root of many social, economic and livelihood issues often lies in the fact that land planning and development fail to keep pace with the growth in demand,” he said.
“Since taking office, the current-term government has been increasing land supply through a multi-pronged approach and addressing the supply-demand imbalance by formulating short, medium and long-term measures. Nevertheless, land development is often met with resistance, and may affect vested interests.”
Centa-City Leading Index, compiled by Centaline Property Agency to track property prices in Hong Kong, peaked at 146.92 in the week to Sept. 13, 2015, up 41.5 percent from the week before Leung took office on July 1, 2012.
It then eased to 135.83 in the week to Jan. 2 this year as a result of various factors including a US interest rate hike and a weakening yuan.
During the election campaign, Leung promised to launch a “Hong Kong Property for Hong Kong People” policy, which aims to give priority to meeting the housing needs of the people.
However, the scheme appears to have stalled after the government auctioned off two residential sites in Kai Tak in June 2013.
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