THE Hong Kong government may auction 52 plots of land this year, boosting supply to build more residential flats to head off risks of a property bubble.
The city would make available for auction 18 new sites and 34 sites left over from the previous fiscal year in the year starting April 1, Financial Secretary John Tsang said in his budget speech yesterday. The land would provide for 16,000 flats, an almost 80 percent increase from the 9,000 in the previous year.
The government in November intensified a yearlong battle to curb property prices by imposing additional transaction taxes and pledging to increase land supply. The city is the world s most expensive place to buy a home, because of a supply shortage, according to a study released by Savills Plc. last month.
These land supply policies make no big difference. It looks like it s doing something, but it isn t, said Nicole Wong, a Hong Kong-based property analyst at CLSA Ltd.
Home prices have gained more than 60 percent in the past two years on record-low mortgage rates and an influx of buyers from the mainland, according to an index compiled by Centaline Property Agency Ltd., the city s largest closely held real estate broker.
Tsang said in his speech that he was concerned about property bubbles.
In the medium to long term, the most effective solution to the problems of the property market lies in the fundamental issue of ensuring steady and adequate land supply, he said. The government would spend HK$300 million (US$38 million) to study ways of increasing land supply, including reclamation off Victoria Harbor and the use of rock caverns.
The government would also sell by tender five residential sites to build about 3,000 small and medium-sized flats, and initiate the auction of four sites from the available list during the year, he said.
The measures give homebuyers confidence that there will be more supply of flats and this will ease rising pressure on flat prices, said Alvin Lam, an executive director in the surveyor unit of Midland Holdings Ltd., the city s biggest realtor by market value.
Hong Kong s property market rebounded in January, Tsang said. Home prices gained 2.1 percent in the week ended Feb. 13 from the previous seven days, according to Centaline. They are up 5.7 percent this year, according to Centaline s index.
Buyers of luxury property are now allowed to borrow up to 50 percent of the purchase price instead of as much as 60 percent.
The government has also imposed a stamp-duty, or sales tax, whereby homebuyers will have to pay a levy of up to 20 percent of the property s value if they sell it within two years.(SD-Agencies)
