LCQ16: Anti-property speculation measures

     Following is a question by the Hon Leung Kwok-hung and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (March 16):


     I have received complaints from members of the public one after another concerning the ineffectiveness of the anti-property speculation measures introduced by the Financial Secretary ("FS") earlier. The continued rise in property prices in Hong Kong since the implementation of these measures has rendered many people unable to acquire their own homes. Moreover, quite a number of people also disagree with the Government's plan of replacing the resumption of the construction of Home Ownership Scheme ("HOS") flats with the My Home Purchase Plan ("MHPP"). In this connection, will the Government honestly inform this Council of each of the following:

(a) whether it has assessed if the anti-property speculation measures are inappropriate in that they have led to rising property prices in Hong Kong; if the outcome of the assessment is in the affirmative, whether FS will assume the responsibility for this and step down;

(b) of the amount of public money that the Government spent in the public consultation exercise on subsidising home ownership conducted from May to September 2010;

(c) whether the Government has consulted Members of this Council of various political parties/groups or independent Members before introducing MHPP; if it has done so, which political parties/groups whose Members or which independent Members have, on behalf of their constituents, indicated support for the Government's implementation of MHPP, and have thus vetoed or opposed the resumption of the construction of HOS flats; if it has not done so, whether the Government has assessed if it is not necessary to listen to the views of Members of this Council, who represent the public opinion, before executing or implementing its policies;
(d) whether the Government will put in place new measures in the next three months to effectively curb the continuous upsurge in property prices, in order to make it easy for members of the general public to acquire homes; if it will, of the details; if not, the reasons for that;

(e) given that recently FS has, in accordance with the wishes of the people, abolished his proposal in the 2011-2012 Budget of injecting funds into the Mandatory Provident Fund accounts, and that the majority of the members of the public who had expressed views on the subject concerned in the aforesaid public consultation exercise requested the resumption of the construction of HOS flats, whether the Government will act in accordance with the wishes of the people again by immediately abolishing MHPP and resuming the construction of HOS flats; if it will, when it will implement this new policy; if not, of the reasons for that, and whether the Government has assessed if this is tantamount to positioning itself as the enemy of the people as well as acting against the wishes of the people, and if it is a waste of public money to conduct these meaningless public consultation exercises; and

(f) before the Chief Executive proposed MHPP, whether and when he considered that MHPP would receive more public support than the resumption of the construction of HOS flats; if not, which government official made the final decision regarding the introduction of MHPP?



     The Government has been monitoring developments in the private residential property market closely and remains vigilant on the risks of a property bubble. In this respect, the Government has repeatedly reminded the public to carefully assess their risks and their own financial position when making a home purchase decision. In February, April, August, October and November 2010, the Government introduced various measures in four areas to ensure the healthy and stable development of the property market. The four areas include increasing land supply to tackle the problem at source, combating speculative activities, enhancing the transparency of property transactions, and preventing excessive expansion in mortgage lending.
     On November 19, 2010, the Government announced new measures to curb short-term speculative activities, including the introduction of the proposed Special Stamp Duty to target short-term speculative activities. The measures have been effective in curbing such activities. According to the latest figures, the number of short-term resale cases in January 2011 decreased by 34% as compared to November 2010. In January 2011, there were about 150 confirmor cases, which was over 50% lower than the average of the first 11 months in 2010 (about 320 cases).

     That said, under an ultra-low interest environment with a vibrant economy, the transaction volume and property prices have picked up again recently. The Government is determined to maintain the stable and healthy development of the property market and will continue to monitor closely the market situation. The Government will not hesitate to take further actions when necessary.

     To tackle the supply problem at source, the Government has set the target of making available land for an average of some 20 000 private residential flats per annum in the next 10 years. The Government Land Sale Programme is not the sole source of private housing land supply. Other sources include lease modifications and land exchanges initiated by private developers, private redevelopments not subject to lease modification, as well as property development tenders carried out by the MTR Corporation Limited (MTRCL) and the Urban Renewal Authority. It is estimated that the housing land may reach a total of about 35 000 units in the coming year. MTRCL is going to be an important source of supply of sites for residential developments. The sites at Nam Cheong, Tsuen Wan, Tai Wai, Tin Shui Wai and Tseung Kwan O are expected to provide an estimated 14,600 units. The Government has decided to sell five residential sites by tender this year, and will impose restrictions on flat size and minimum flat numbers in the conditions of sale. The objective is to increase the supply of small and medium-sized flats.

     On public rental housing (PRH), the Government is committed to ensuring an adequate supply of land to produce on average about 15 000 PRH flats each year, and maintaining the target average waiting time (AWT) for general Waiting List applicants at about three years. In addition, the Government's policy is to provide PRH to low income families who cannot afford private rental accommodation. The Hong Kong Housing Authority has already endorsed the Waiting List income and asset limits for 2011/12. When compared with that in 2010/11, the income and asset limits have increased by an average of 15.6% and 3.3% respectively. It is estimated that under the new limits, about 131 100 non-owner occupied households in the private sector will be eligible for PRH, representing an increase of about 25 400 households over that of 2010/11. We will keep in view the demand situation, and roll forward and suitably adjust the Public Housing Construction Programme to maintain the target of an AWT at about three years.  

     The Government recognises the importance of a stable home, and is fully aware of the people's wish to improve their quality of life and move up the social ladder through home ownership. We believe that we should introduce targeted measures in light of the latest situation to help the sandwich class purchase their own flats. Any form of subsidised home ownership will, however, only serve as a buffer. In the long run, we should increase supply to tackle the problem at source and provide more opportunities for affordable home purchase. In the face of short-term market fluctuations, it is appropriate for the Government to provide relief measures to potential home buyers with affordability in the long term to give them time to save up.

     Having taken into account the views received during the Public Consultation on Subsidising Home Ownership, and the experience of the previous subsidised home ownership schemes, the Government has announced that, in collaboration with the Hong Kong Housing Society, it will introduce My Home Purchase Plan (MHPP) premised on the concept of "rent-and-buy". The MHPP will effectively target at households with the ability to pay mortgages in the long run, but who cannot immediately afford the down payment in the face of short-term property price fluctuations, and allow such potential home buyers some time to save up for their home purchase. Also, MHPP helps increase the supply of "no-frills" small and medium-sized private residential flats. The consultation report is uploaded onto Transport and Housing Bureau's website (Note). The consultation involved about $6.3 million, which included manpower expenditure, and expenses in organising the consultation forums and focus groups, production of website and E-forum, publicity, and the printing of the report.

     MHPP, together with Government's commitment to address the housing needs of those low-income households who cannot afford private rental housing through the provision of PRH, measures introduced to increase land supply, the revitalisation measures for the Home Ownership Scheme (HOS) Secondary Market Scheme, and efforts to enhance the transparency and fairness of first-hand sales in the private sector, will increase choice to meet the different housing needs of the community in a sustainable manner.  

     Overall, the Government aims to provide people that have different levels of affordability with various housing options for purchase or rental. The first level is PRH for low-income families who cannot afford private rental accommodation. Above PRH is the second-hand HOS flats in the HOS Secondary Market where HOS owners may sell their flats to Green Form applicants without paying premium. The next levels are flats of lower prices (including HOS flats sold in the open market) in the private property market targeting the general public, and the MHPP flats. In the private property sector, residential flats at various market prices are also available in both the primary and secondary markets to satisfy the diverse demands of those who can afford private flats.

(Note) The website is: .

Ends/Wednesday, March 16, 2011
Issued at HKT 15:18