HONG KONG - Hong Kong's leader outlined new steps Wednesday to cool the world's hottest real estate market, including a halt to automatic residency for wealthy Chinese buyers, depressing property shares.
Chief Executive Donald Tsang said he was responding to "public concern" about a residential housing shortage and sky-rocketing prices, at a rowdy legislative assembly session in which one legislator was escorted from the chamber.
Residential property prices have risen 20 percent in the last year, he noted.
"Housing is currently the greatest concern of our people," said Tsang. "Over the past few years, private housing supply has been relatively low. We should address the fundamentals by increasing land supply in response to market demand."
Among measures he unveiled was a temporary amendment to the territory's Capital Investment Scheme, which is intended to encourage investment in the territory.
The amendment will prevent investors from gaining residency in Hong Kong through property purchases from October 14, Tsang said.
Investors from the mainland have long been lured by the prospect of residency in Hong Kong, a financial centre and gateway to China that is run under a different legal system and boasts higher living standards.
The announcement sent share prices in property developers plunging: SHK Properties was down 3.6 percent, New World Development lost 3.5 percent and Sino Land was down 2.6 percent.
To help ease the housing shortage, Tsang also announced plans to build residential property on the city's old airport, Kai Tak, which was closed down in favor of a new more spacious sight away from residential areas in 1998.
On Tuesday angry protesters interrupted an auction of an upmarket residential site in the Kowloon area that fetched 1.63 billion Hong Kong dollars (US$210 million).
