Other measures to address the overheated property market
17. Mr CHAN Kin-por referred to some public views that a property bubble had been formed as residential property prices continued to surge at an appalling rate. While the extremely low-interest environment would continue to prevail for an extended period of time as the US Federal Reserve had extended its pledge to maintain exceptionally low interest rate at least until mid 2015 under QE3, there might be a change in the US monetary policy following its 2012 presidential election. Mr CHAN asked whether the Government had contingency measures in the event of a reversal of the low-interest environment and abrupt outflow of large amount of capital that could result in a deep property slump at any time.
Secretary for Financial Services and the Treasury said that the Government was concerned about the emergence of a property bubble and FS and other principal officials had cautioned the investing public of the associated risks. He assured Members that the Government would exercise prudent risk management in deciding the appropriate measures to be implemented with due regard to the local and external economic environment. Nonetheless, it was difficult to make predictions on market changes, and this had explained why the Government had proposed introducing a mechanism for revising BSD/SSD rates through subsidiary legislation so that adjustment to the rates could be implemented more promptly in response to rapid changes in the market.
Increasing supply of land and housing
Mr CHAN Kin-por referred to some public comments that the new BSD and enhanced SSD were only transitional measures so that the Government could “buy time” before the medium and long-term measures to increase land and flat supply could materialize. To tackle the problem of housing shortage at source, he considered it necessary for the Administration to step up efforts in expanding land resources and identifying suitable sites for housing development in the long run. He enquired about the progress made in this respect, including exploring options for reclamation outside Victoria Harbour.