Ex-Hong Kong chief Leung Chun Ying signals housing as next big target after electoral revamp

Hong Kong's housing market was the world's least affordable for the 11th year in 2020.
Hong Kong's housing market was the world's least affordable for the 11th year in 2020.PHOTO: AFP

HONG KONG (BLOOMBERG) - Hong Kong's new electoral system will help the government tackle livelihood issues including a lack of housing, former leader Leung Chun Ying said.

The shortage of homes "is the root of a lot of social and economic problems in Hong Kong", Mr Leung said in an interview with Bloomberg Television on Tuesday (March 30). "We need to create more land for housing units."

Though Mr Leung left office more than four years ago, his position as vice-chairman of China's top political advisory body means his views carry weight. His comments suggest that Beijing wants the local administration to focus on resolving longstanding problems afflicting the former British colony, after stamping out protests that paralysed the city in 2019 and neutralising opposition lawmakers.

Mr Leung backed widespread changes to the city's legislature on Tuesday, saying it will speed up implementation of government policies. The reorganisation will reduce the proportion of directly elected seats from 50 per cent to 22 per cent and require future candidates to be vetted by police.

"Hopefully, we'll have less, hopefully no, filibustering in the Legislative Council, which really plagued attempts by governments, including my government, to create more land," said Mr Leung, who was chief executive from 2012 to 2017.

Low interest rates and a lack of sufficient supply have fuelled a bubble in property. Hong Kong's housing market was the world's least affordable for the 11th year in 2020, according to research firm Demographia.

The government owns virtually all the land, while the city imports its monetary policy from the United States due to a currency peg with the greenback.

Mr Leung said officials will likely focus on providing more units. The government has rolled out a series of measures in the past decade to limit the pace of gains, such as hiking stamp duty. Current leader Carrie Lam plans to build housing on reclaimed land off the coast of Lantau Island in the south-west of Hong Kong.

"We look at the statistics of who's buying in Hong Kong nowadays and you realise the demand side has been surprisingly controlled," said Mr Leung, who stepped down as chief executive after only one term. "We can't be nice guys for everyone."