Hong Kong to enhance land supply: financial chief

HONG KONG: Hong Kong's financial chief vowed Wednesday to further boost the city's land supply in response to rising public anger over soaring property prices and repeated warnings of a looming real estate bubble.

Financial Secretary John Tsang also announced a set of measures aimed at taking the bite out of the soaring home prices, including energy and rent subsidies.

The decision to sell off more land is the latest by officials in the city of seven million, famous for its sky-high residential rents and super-rich tycoons, as they try to cool the overheated property market.

Tsang's comments came as the city's unemployment rate hit a two-year low in January, while inflation hit a two-year high, underscoring Hong Kong's red-hot economy.

"We are determined to maintain the stable and healthy development of the property market," Tsang said in his annual budget speech, adding that the government would hold a series of land auctions this year to boost supply.

"The challenges in the coming year arise mainly from the risk of asset-price bubbles and inflation

Fighting inflation is our major task this year."

Authorities have announced a series of measures to stem the rise of prices in the densely populated city, including multiple land sales and tightening of mortgage lending, but they still rise.

The vast amounts people are forced to pay for a home has led to public anger in Hong Kong, traditionally associated with laissez-faire economic policies, and a warning from the International Monetary Fund of a potential bubble.

But Tsang on Wednesday warned "excessive" fund flows into Hong Kong had sparked "exuberant speculative activities" that could further push up already buoyant property prices.

He said he would usher in a package of measures, including an electricity subsidy for city residents and temporary government-funded rent payments for public housing tenants.

Meanwhile, strong growth in mainland China and Asia helped Hong Kong bounce back from the global financial crisis "at a faster pace than expected" rate last year, growing 6.8 percent, more than the forecast 4.0-5.0 percent, Tsang said.

Tsang expects the economy to grow up to 5.0 percent this year and inflation to average 4.5 percent, he added.