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Answer:
(a) Property prices increased sharply in 1993 and early 1994. It was against this background that the Government decided to introduce a package of price- stabilisation measures in June 1994. The price level in 1993 is therefore a natural reference point for making comparisons with current prices.
Since the introduction of anti-speculation measures, property prices have stabilised. The price index in September 1995 was about 24% lower than the peak in April 1994. Although the index was still 22% higher than that in January 1993, the difference was roughly in line with inflation during the same period at about 24% in terms of the CPI(A).
The Government does not have in mind a pre-determined acceptable level of prices. The Financial Secretary's remarks were made simply to reflect the success of the price-stabilisation measures in dampening speculation and allowing the market to find its own equilibrium.
(b) The level of property prices has always been a matter of public concern. It is normal and appropriate for Government officials to speak on this subject in response to media enquiries. The Financial Secretary's remarks should not be taken as a prediction of price movements, but as an observation on the current price level as compared with that in 1993. There is no question of violating the principle of non- intervention.
(c) The stabilisation of property prices will increase people's affordability to buy homes. We are satisfied that the anti-speculation measures are achieving the desired results. We do not intend to relax these measures, but will closely monitor the property market to guard against a revival of speculation. The situation will be reviewed on a regular basis.
The Government has declared its intention to promote home ownership. We will help over 190,000 families to buy their own homes between April 1995 and April 2001 through various subsidised home ownership schemes and housing loan schemes. We are confident that a home ownership rate of 55% can be achieved by 1997, and will improve on that level thereafter.
End/Wednesday, November 22, 1995