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Hong Kong to Give Preference to Local Buyers on 2 Sites in 2013

Sept. 6 (Bloomberg) -- Hong Kong will restrict buyers of apartments built on two sites it plans to sell next year to local residents, as the government attempts to cool housing prices that have surged to the world’s most expensive.

The two sites in eastern Kowloon have a combined area of 1.6 hectares (4 acres), Chief Executive Leung Chun-ying told reporters at a briefing broadcast by the city’s Cable TV today. Details of the measure come a week after it was flagged as part of a 10-point package the chief executive announced on Aug. 30 that also included the speeding up of the approval of permits for private project sales.

The policies are the toughest since the government in June last year increased down-payment requirements, and the strongest move yet to quell concerns about a surge in non-local purchases, particularly by mainland China investors who account for a third of new home buying in the city and helped drive prices up 85 percent since the beginning of 2009.

“Land for housing in Hong Kong is a rare resource,” Leung said today. “When we decide on how to use it we need to make sure we are satisfying the need of Hong Kong people first.”

The seven-member Hang Seng Property Index, which tracks developers, including Sun Hung Kai Properties Ltd. and Cheung Kong (Holdings) Ltd., has risen 14 percent this year, compared with the 4.2 percent increase in the benchmark Hang Seng Index.

The property index has risen 0.5 percent since Leung unveiled the new efforts to curb prices on Aug. 30. It fell 0.3 percent at the close of trading today.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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