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LCQ12: Influence of mainland buyers on Hong Kong property market

     Following is a question by the Hon David Li and a written reply by the Secretary for Transport and Housing, Ms Eva Cheng, in the Legislative Council today (May 16):


     In reply to my question at the Council meeting of November 10, 2010, the Government advised that there was no breakdown on the number of property transactions by mainland buyers in the Land Registry (LR)'s record on local property transactions, as a flat buyer does not have to declare such information when registering the transactions with LR.  Yet, it was recently reported in the press that an estate agency had compiled data on the activities of mainland buyers by observing whether the registered name of the buyer was provided in pinyin.  According to the data produced, the total value of transactions involving mainland buyers reached $60 billion in 2011.  This represented 19.2% of the value of all transactions, which has gone up from 10.8% in 2010.  The impact of mainland buyers was particularly pronounced in the primary market, where such buyers accounted for 39.9% of the value of all transactions in 2011.  In this connection, will the Government inform this Council:

(a) whether the Government will consider requiring buyers of residential properties to provide more details on their origin so that market participants do not need to derive information on the source of demand in Hong Kong's property market using crude methods; if not, of the reasons for that;

(b) given the apparent large number of mainland buyers in the local property market and especially in the primary market as reported by the media, whether the Government has any reason to believe that a bubble exists in the local property market; and

(c) whether the Government has conducted any review of the impact of mainland buyers' activities in the local property market in recent years and/or the outlook for the coming years; if so, of the conclusion reached?



(a) and (c) As a centre for international finance and trade, Hong Kong attracts investments from all over the world.  The Government has been closely monitoring the property market.  In this regard, the Government has always paid heed to factors that may impact on the development of the local property market, including local and external economic conditions, global liquidity and interest rates etc, and made reference to various statistics and indexes, including residential property prices, transaction volume, supply and demand, affordability of home purchase, speculative activities, mortgage lending, etc, to assess the overall situation of the property market.  Since it has all along been the Government's policy to safeguard the free flow of capital within, into and out of Hong Kong, the Administration has no plan to require buyers of residential property to declare information about their origin.  The Administration has also not conducted any study and forecast on the impact on or the outlook of the property market arising from Mainland people purchasing properties in Hong Kong.

(b) That said, the Government has always been mindful of the ramifications that wild fluctuations in property prices would have on overall macroeconomic and financial stability.  Since 2010, the Government has introduced a series of measures along four directions, viz. increasing land supply, combating speculative activities, enhancing the transparency of the property market, and preventing excessive expansion in mortgage lending, with a view to ensuring the healthy and stable development of the property market.  

     The various Government efforts have yielded significant results.  Nonetheless, as the major advanced economies are likely to maintain an ultra-loose monetary policy for a prolonged period, the resultant low interest rates and abundant liquidity could easily drive the property market to an exuberant state again when the external environment shows even a slight improvement.  Accordingly, the Government will stay vigilant to the risk of a property market bubble and introduce further measures when necessary.

Ends/Wednesday, May 16, 2012
Issued at HKT 12:11


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