Property Market Behaviour Shows Forces At Work

 

The behaviour of the Hong Kong's property market has become more mature and rational than before, showing that market forces guided by the interplay of supply and demand are at work, the Secretary for Housing, Planning and Lands, Mr Michael Suen, said today (June 19).

 

Addressing the Housing Conference organized by the Hong Kong Institute of Housing, Mr Suen said that it was important to have a residential market that grew steadily and healthily, without irrational fluctuations and our residential market was capable of charting such a course.

 

Mr Suen noted that the Government's Statement on Housing Policy in November 2002 underlined the importance of maintaining a free and stable environment that would enable the property market to develop in a sustained and healthy manner, and on a level playing field.

 

"It is, therefore, incumbent on us to fortify their belief that the Government will maintain this clear, comprehensive and consistent housing policy so that we can sustain the confidence of the public and investors in the property market," he said.

 

"In the absence of Government intervention, the market is now better able to adjust to changes in supply and demand; and it is doing so purely on the basis of its own internal dynamics," Mr Suen added.

 

Mr Suen said that the Government would continue to meet the market's demand by making sufficient land with a balanced mix of sites available through the Application List system.

 

Noting the Application List System as market driven, Mr Suen said the List enabled the market to determine flexibly the quantity and timing of land to be put up for sale in a flexible way.

 

"The Application List system is a transparent mechanism with well-publicised procedures that are well known in the market," he said.

 

"Through this process, Government will realize optimum land revenue reflecting the open market value of the sale sites," Mr Suen added.

 

"We have sold three residential sites from the 2004-05 Application List. The current list included 14 residential sites of different sizes and development densities. Nine of them have an area of less than one hectare. This should meet the needs of different developments including the small and medium ones. Seven sites in the List are also suitable for upper-end residential developments," he said.

 

"Of course, developers can also obtain sites by other means, such as lease modifications and Urban Renewal Authority projects.

 

"The Government will carefully take prevailing market conditions and development needs into account when it draws up the 2005-06 Application List early next year.

 

"We will also consider other relevant factors, such as the attractiveness, location and variety of sites, in order to meet the interests of different developers," Mr Suen added.

 

Mr Suen stressed that the Government was steadfastly committed to a clear, consistent and transparent housing policy that benefited the long-term and stable development of the property market.

 

"Hong Kong's future economic prospects are encouraging. The GDP will grow by as much as six per cent in 2004. Deflation and unemployment rates have also been improving gradually.

 

"Coupled with the government's commitment to a repositioned housing policy, we hope this will continue to boost public's confidence in the property market," Mr Suen said.

 

Ends/Saturday, June 19, 2004

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