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Following is a reply by the Secretary for Security, Mr Ambrose S K Lee, to a question by Dr Hon Priscilla Leung in the Legislative Council today (April 28):
Question:
It has been reported that recently, the average price of the residential units in a new development in Yuen Long was as high as HK$6,000 per square foot, and the per-square-foot accommodation value of a site in Tseung Kwan O is already higher than the per-square-foot price of second-hand residential units in the same district, reflecting a huge increase in property prices and the property market being abnormally active. The supply of flats and the ability of members of the public to own homes have become the issues of the most concern to the community in Hong Kong. Moreover, the Capital Investment Entrant Scheme (CIES) has brought a total of over HK$42 billion in investment during the period between its introduction in October 2003 and the end of last year, with HK$12.3 billion (i.e. nearly 30 per cent) of such investment on real estate. In this connection, will the Government inform this Council:
(a) whether it has assessed if CIES is the main cause of the property market being abnormally active recently; if an assessment has been made, of the outcome;
(b) whether it has considered revising the minimum value of investment required under CIES from HK$6.5 million at present gradually by phases to HK$10 million or above; and
(c) given that the minimum value of investment of HK$6.5 million required under CIES has not been revised since it was set in October 2003, whether it will formulate a mechanism for reviewing the minimum value of investment regularly; if it will, of the details, including the data to be included for reference during the review; if not, the reasons for that?
Reply:
President,
The situation of local real estate prices is also of concern to the Government. As in our response in the debate on Hon Audrey Eu's motion to amend the Appropriation Bill 2010 at the Legislative Council (LegCo) sitting on April 21, 2010, the main factors affecting real estate prices include demand and supply, mortgage rates, investment environment, etc. We believe that the Capital Investment Entrant Scheme (CIES) under the Immigration Department (ImmD) should have no direct and substantive impact on local real estate prices.
Our response to the three parts of Dr Hon Priscilla Leung's question is as follows:
(a) Hong Kong is an open and free economy. Even outside the CIES, overseas investors may buy and sell real estate or make other kinds of capital investments in Hong Kong freely. Under the CIES, investors must report to ImmD the relevant information of all material transactions (including the acquisition, disposal, and charging of real estate). Statistics show that the investment in real estate under the CIES accounts for only one per cent of the total transaction of the local real estate market. According to ImmD's observation, real estate investment under the CIES does not involve speculative trading.
(b) and (c) The Government has started a comprehensive review on the arrangements under the CIES, which will cover whether or not to raise the current minimum value of investment of $6.5 million. The review will take into account views from LegCo Members and different sectors of the community. Depending on the outcome of the review, we would make amendments to the CIES to ensure that it serves the best overall interest to Hong Kong.
Ends/Wednesday, April 28, 2010
Issued at HKT 13:16
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