XN000022-1994-06-09 — Page 5

THURSDAY, JUNE 9, 1994

FOLLOWING ES

THE TRANSCRIPT OF THE GOVERNOR'S QUESTION AND ANSWER SESSION IN THE LEGISLATIVE COUNCIL:

+

MR K K FUNG (THROUGH INTERPRETER) : MR PRESIDENT,

LIKE TO ASK ABOUT PROPERTY PRICES. I'D LIKE TO READ OUT THRER STATEMENTS THAT HAVE BREN RELEASED BY THE GOVERNMENT BECAUSE I WANT TO REMINI GOVERNOR THAT SUCH STATEMENTS HAVE BEEN RELEASBU

ADMINISTRATION.

THE

BY

THE

ON 30TH MARCH, THE FINANCIAL SECRETARY THROUGH HIS BUDGET SPEECH, SAI

FOLLOWING: HE SAID THAT THE OBJECTIVE WAS TO COME THE

UP WITH A WORKABLE PACKAGE THAT WOULD RESULT IN INCREASE IN LAND SUPPLY AND ALSO WOULD REDUCE PROPERTY PRICES AND HE ALSO REITERATED THAT THE OBJECTIVE OF THE ADMINISTRATION WAS TO REVISE PROPERTY PRICES DOWNWARD. PLRASK NOTE THAT THE EXPRESSION USED IS TO REDUCE PROPERTY PRICES AND TO REVISE THEM DOWNWARD.

SECONDLY, MR CANICE MAK AFTER THE BUDGET SPEECH WAS RELEASED PUBLICLY ASKED MEMBERS OF THE PUBLIC NOT TO BUY PROPERTY AND THIRDLY YESTERDAY TRE SECRETARY FOR PEL, MR EASON, SAID THAT CONCERNING THE SEVEN PROPOSALS OF THE ADMINISTRATION, HE SAID THAT THEY WERE MODERATE AND ONLY IF THEY HAVE FAILED TO ACHIEVE KEFROT FURTHER MEASURES WOULD BE TAKEN.

MY

TO

QUESTION IS, CONCERNING THE PACKAGE ANNOUNCED VESTERDAY, I'D LIKE KNOW WHETHER THE OBJECTIVE IS REALLY THE PROPERTY PRICES AS (R YESTERDAY AND WHETHER THE PACKAGE WOULD BE ABLE TO DRIVE THE PROPERTY PRIORS DOWNWARD OR TO BRING THE PROPERTY PRICES ON A DOWNWARD TREND? U'D LIKE TO KNOW WHETHFR THAT IS THE OBJECTIVE? IF THAT IS

SO, ED LIKE TO KNOW WHETHER YOU HAVE A BOTTOM LINE FOR THIS TREND OF DOWNWARD PROPERTY PRICES? IF THE ANSWER IS NO, I'D LIKE TO KNOW WHAT 15 THE ULTIMATK OBJECTIVE OF THE PACKAGE ANNOUNCED BY THE SECRETARY PEL YESTERDAY? CAN YOU DESCRIBE TO ME WHAT IS THE OKJRITIVE IF THE ANSWER

IS NOT

GOVERNOR : YES ¿ CAN CERTAINLY DESCRIBE THE OBJECTIVE. THE OBJECTIVE AS THE FINANCIAL SECRETARY SAID IN HIS WISE REMARKS IN HIS BUDGET STATEMENT. THE OBJECTIVE WAS TO CORRECT THE WIDELY PERUKIVED OVERHEATING IN THE PROPERTY MARKET AND TO DO IT BY ACCOMPLISHING TWO THINGS. FIRST OF ALL TO DEAL WITA SPECULATION IN THE SHORT-TERM AND SECONDLY TO DEAL WITH THE PROBLEM OF LAND SUPPLY IN THE MEDIUM AND LONGER-TERM, WHICH JTSELF WILL HAVE SOME IMPACT ON PROPERTY PRICES FVEN BEFORE THAT SUPPLY OF EXTRA HOUSING COMES ON STREAM. J THINK THAT IT'S INTERESTING THAT WHILE PROPERTY PRICES WENT UP BY BETWEEN, SUPPOSE, 20 AND 30% IN THE FIRST QUARTER OF THE

YEAR, SINCE THEN THEY'VE COME OFF BY ABOUT 10 TO 15% AND 1 HOPE THAT BOTH THE ANNOUNCEMENT OF OUR INTENTION TO DEAL WITH THE PROBLEM AND WHAT WE'VE DONE WILL ABATE PROPERTY PRICE INCREASES. BUT WE WOULD RE A SPECTACULARLY FOOLISH GOVERNMENT IF WE THOUGHT THAT WE COULD SET PROPERTY PRICES RATHER THAN THE MARKET WITH A BALANCE BETWEEN SUPPLY AND DEMAND ULTIMATELY DETERMINING PROPERTY PRICES.

/WHAT ONE