The leader of Hong Kong announced on Thursday that after years of price rises caused by an influx of rich buyers from mainland China, there will be measures put in place to prioritise the property market for local buyers. The chief executive, Leung Chun-ying said that he has instructed officials to make drafts for laws that would restrict the sales of certain properties to only Hong Kong residents, a measure being dubbed the ‘Hong Kong land for Hong Kong people’ policy, reported Asia One Business yesterday.
This is to give priority to the housing need of the local residents, said Leung.
“We will continue to monitor the property market closely and introduce more measures if necessary, he added.
Leung told reporters that the measures of the policy would include converting 36 sites from government and public-use buildings into residential buildings in order to boost land supply, providing space for an additional 12,000 residential units. Also included in the plans are measures to speed up approval for permitting the private selling of homes which would provide an additional 65,000 units during the next three to four years. The city has been constantly attempting to curb its increasing property prices, since home ownership is becoming beyond the reach of even the upper-middle class, a phenomenon which is fuelling public discontent.
Although Hong Kong has always been famous for its immensely high rents and rich tycoons, it is only in the last few years that property prices have surged, partly because of record low interest rates and partly due to wealthy investors from mainland China buying up homes at a rapid rate. Some analysts however, have said that the new policy plans will not be enough to keep the housing market in check.
While the pledge to introduce more land in order to improve longer-term supply is welcome, the immediate impact appears limited, judging by the small amount of supply that will come through soon, said Standard Chartered.
Overall, we think the latest measures will at best help to calm the market, added the bank in a research note.
According to Dow Jones Newswires, this year alone has seen the average price of homes in the city rise by approximately 13 percent. It has been reported that a luxury apartment in the city was sold for HKD470 million (US$60,598,040), making Hong Kong home to the most expensive condominium in Asia and the world’s second most expensive apartment outside of One Hyde Park in London.