Government and Policy

HK to adopt 4 measures to ensure healthy property market

(Xinhua)
Updated: 2010-02-24 13:57

HONG KONG: Hong Kong will implement four measures to reduce the risk of creating a property bubble, said Hong Kong's top financial official in his annual budget speech here Wednesday.

The measures include increasing the supply of flats, raising stamp duty of luxury flats, ensuring transparency in property transactions and preventing excessive expansion in mortgage lending, said aid John Tsang, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, at the Legislative Council.

In 2010, the number of private residential units completed will increase to 14,300, he said.

"In the coming three to four years, we estimate that about 53,000 private residential units will come onto the market. To further increase the supply of flats, we will introduce the following measures," he said.

The Government has drawn up the Application List for 2010-11 for application by the market. However, depending on market conditions, the Government will put up several urban residential sites in the List for sale by auction or tender in the coming two years if they have not been triggered, said the financial secretary.

"I propose that with effect from April 1 this year the rate of stamp duty on transactions of properties valued more than 20 million HK dollars be increased from 3.75 percent to 4.25 percent, and buyers will no longer be allowed to defer payment of stamp duty on such transactions," he said.

The Government will ensure transparency in property transactions and transaction prices to facilitate effective operation of the market, he said.

"We will strive to prevent excessive expansion in mortgage lending so as to avert fueling an asset-price bubble in the property market," said Tsang.

"It is the policy objective of the Government to ensure a healthy and stable development of the property market," he noted.

The above measures strike a balance between reducing the risk of a property bubble and preventing public policies from causing unnecessary fluctuations in the property market, he said.

It is very important to maintain this balance particularly at this point in time, in the face of uncertainties in the external environment, he said.

"The Government and the regulatory bodies will continue to closely monitor the situation and take further measures when necessary," said the financial secretary.