HK restarts housing program
Source: Agencies |
October 13, 2011, Thursday
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Print Edition
Print Edition
HONG Kong will resume a program to sell thousands of affordable apartments a year, the city's leader said yesterday in an annual policy speech aimed at cooling public anger over the city's widening rich-poor gap.
Donald Tsang also warned of a gloomy economic outlook and "enormous inflationary pressure" facing Hong Kong because of soaring property and food prices.
"We are not optimistic about global economic prospects next year. We may see inflation and recession come one after the other," Tsang, said in his last policy address before stepping down as Chief Executive next year.
Tsang said he expected Hong Kong's average inflation to hit 5.4 percent this year, the highest annual rate since 1997.
Rocketing property prices have squeezed poor and middle-class Hong Kong families, stoking resentment toward the government and property developers.
Tsang acknowledged the public discontent, noting that property prices jumped 18 percent in August over the year before while surging food costs accounted for about 40 percent of the rise in consumer prices.
"In regard to housing, the financial tsunami has led to surging asset values and soaring property prices," said Tsang. "People have become frustrated because it is more difficult for them to own a home."
Hong Kong's property prices have been driven up by a relatively small supply of private apartments, abundant liquidity and low interest rates, he said. Hong Kong authorities lack a monetary policy lever to raise borrowing costs because the city's currency is pegged to the US dollar.
Under the revived subsidized housing purchase program, the government will initially build and sell 17,000 apartments over four years from 2016 to families earning HK$30,000 (US$3,850) or less a month.
The apartments will cost from HK$1.5 million to HK$2 million.
The program was halted in 2003 after prices plunged more than 60 percent following the Asian financial crisis and bursting of the dot-com bubble.
Donald Tsang also warned of a gloomy economic outlook and "enormous inflationary pressure" facing Hong Kong because of soaring property and food prices.
"We are not optimistic about global economic prospects next year. We may see inflation and recession come one after the other," Tsang, said in his last policy address before stepping down as Chief Executive next year.
Tsang said he expected Hong Kong's average inflation to hit 5.4 percent this year, the highest annual rate since 1997.
Rocketing property prices have squeezed poor and middle-class Hong Kong families, stoking resentment toward the government and property developers.
Tsang acknowledged the public discontent, noting that property prices jumped 18 percent in August over the year before while surging food costs accounted for about 40 percent of the rise in consumer prices.
"In regard to housing, the financial tsunami has led to surging asset values and soaring property prices," said Tsang. "People have become frustrated because it is more difficult for them to own a home."
Hong Kong's property prices have been driven up by a relatively small supply of private apartments, abundant liquidity and low interest rates, he said. Hong Kong authorities lack a monetary policy lever to raise borrowing costs because the city's currency is pegged to the US dollar.
Under the revived subsidized housing purchase program, the government will initially build and sell 17,000 apartments over four years from 2016 to families earning HK$30,000 (US$3,850) or less a month.
The apartments will cost from HK$1.5 million to HK$2 million.
The program was halted in 2003 after prices plunged more than 60 percent following the Asian financial crisis and bursting of the dot-com bubble.
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