SCMP Thursday, June 22, 2000

Tung pledges to halt property-price slide


Updated at 2.22pm:
Chief Executive Tung Chee-hwa vowed on Friday to stop property prices from falling further but denied accusations of favouritism towards the real estate sector.

''It is very important to stabilise the property market. I don't want to see prices slide further,'' he told the Legislative Council.

''To most people the most important investment is investment in their own home.''

The Government has suspended sales of subsidised flats but insisted it was a pragmatic response to market conditions rather than a sop to developers keen to sell more.

But recently Hong Kong Real Estate Developers' Association chairman Stanley Ho Hung-sun openly praised what he saw as Mr Tung's speedy response to a call for market stabilisation after receiving a letter from him.

However, when Democrat Lee Wing-tat asked the Chief Executive if his decision sprang from bias towards property developers, he was roundly rebuffed.

''I never talked to Mr Ho personally. It is not fair for you to accuse me because I receive so many letters each day,'' Mr Tung said, adding he did not recall getting a letter from Mr Ho.

He listed a host of reasons for the property sector's problems, including US interest rates increase and cheap flats in Shenzhen.

Liberal Party member Miriam Lau Kin-yee pressured Mr Tung to go further and agree to other proposals to stabilise the market, such as allowing people to borrow larger mortgages.

But Mr Tung said he did not believe that allowing 85 per cent financing of home purchases rather than the 70 per cent maximum limit now in force was necessary.

He felt that the present mortgage scheme was sufficient in stabilising property prices and pointed out that it was not a Government responsibility but a question for the Hong Kong Monetary Authority.

''The decision rests with the HKMA but the stability and improvement of the financial market should remain our chief concern,'' Mr Tung said.