• Leung Chun-ying says cooling measures beginning to pay off
  • He vows to resolve the housing issue with increased supply

Hong Kong Chief Executive Leung Chun-ying said government measures to curb property price increases are starting to bear fruit and vowed vigilance on housing affordability in the world’s most expensive place to own a home.

"Market data has shown that prices in the primary and secondary markets have started to decline," Leung said in a speech to lawmakers at Hong Kong’s Legislative Council on Thursday morning, without giving specific details. "The government is determined to resolve the housing issue," he said.

Secondary private residential property prices dropped 1.26 percent during the Oct. 5-11 period from a week earlier, the third decline in four weeks, according to an index published by broker Centaline Property Agency Ltd. Home prices have surged more than 370 percent to a record since 2003, helping to widen a wealth gap and spurring protests.

The government has previously said it plans to increase total housing stock by 18 percent, or 480,000 homes, in the next 10 years. Leung and the city’s de facto central bank have also implemented a series of cooling measures, including reducing the value of loans available and raising taxes on overseas investors.

Leung’s comments come amid predictions by others that property prices will start to fall in Hong Kong as the economy weakens and interest rates increase. Henderson Land Development Co. Chairman Lee Shau-kee said prices would fall 5 percent in the each of the next two years, according to a Hong Kong Economic Times report on Oct. 16.

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