Hong Kong ready to avert property bubble

Hong Kong: Hong Kong could increase land supply in coming months to rein in property prices, Chief Executive Donald Tsang said, as a luxury flat sold for a world record, heightening concerns about a possible property bubble.

Developer Henderson Land Development said it had sold a deluxe duplex in the Mid-Levels district on the lower slopes of the city's exclusive Peak for HK$71,280 (Dh33,425) per square foot — setting a world record per square foot for an apartment and surpassing London prices.

Property prices in Hong Kong have surged 26 per cent this year, despite the economic downturn, amid low new supply and strong demand for luxury property from wealthy Chinese.

Hong Kong's government, which controls land supply, has not sold residential for a year and a half.

"The government will closely monitor market changes in the coming months. When necessary, we will fine-tune land supply arrangements ... with a view to quickening the pace of bringing readily available residential sites to the market," Tsang said in his annual policy address to the Legislative Council.

"The relatively small number of residential units completed and the record prices attained in certain transactions this year have caused concern about the supply of flats, difficulty in purchasing a home, and the possibility of a property bubble," Tsang said.

Two 4,000-square-feet penthouses in a development on the Kowloon peninsula, will be among the world's most expensive apartments if they fetch their price tag of nearly $38 million.