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Thursday, July 3, 2014, 16:22

CE pledges to boost land supply

By Oswald Chan/

 CE pledges to boost land supply
Chief Executive CY Leung attends a question and answer session at the Legislative Council on July 3, 2014. (Crystal Wong / China Daily).

HONG KONG - Chief Executive Leung Chun-ying pledged to increase land supply saying the government was responsible for making housing more affordable for young people.

Speaking at the Legislative Council on Thursday, Leung said that the administration, amid difficulties, would launch some controversial yet necessary long-term land development programs, including the New Terrorities East Development Plan.

Leung said the government had floated tenders for land sites as part of government land sales program.

Leung also said that after the introduction of Buyer’s Stamp Duty (BSD), Special Stamp Duty (SSD) and Double Stamp Duty (DSD), home prices and rental level had begun to stabilize. He hoped the Legislative Council would pass appropriate legislation regarding DSD to eliminate uncertainties in the local home market.

UBS Wealth Management’s Head CIO WM Research Hong Kong Patrick Ho remained pessimistic about the city’s home market as it continued to remain pricey. He maintained local home prices would fall between 5 percent and 10 percent in 2014.

"The US could raise interest rates in 2015. Also, the anticipated increase in land supply and more mainland investors turning to US and Europe for investing in property, the attractiveness of the city’s property market will be diminished,” Ho said.

Goldman Sachs was similarly pessimistic. The investment house believed the government would further ease measures until home prices had fallen by 15 percent-20 percent. It anticipates local home prices will continue to drop in the coming two years before starting to stabilize in 2017.

Barclays Plc forecast last year that Hong Kong home prices could drop at least 30 percent by 2016 owing to pressure from increasing land supply in the coming years.

The International Monetary Fund pointed out earlier that Hong Kong had the world’s second highest rate of home price hike (10.25 percent) in 2013 and had the highest property price-to-income ratio in Asia.  

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