Hong Kong to restrict foreign homebuyers

Hong Kong’s government has announced rules that will severely restrict non-residents from buying property in the city.

The move is seen as being aimed at mainland Chinese buyers whose property buying binge since 2009 has driven property prices in Hong Kong to levels out of the reach of ordinary wage earners, and is fueling public anger against mainlanders.

Chief Executive Leung Chun-ying said only Hong Kong permanent residents will be able to buy flats to be built on two sites that will provide around 1,100 homes next year under his "Hong Kong land for Hong Kong people" policy.

The flats have a combined size of 1.6 hectares in an area that used to be the site of Hong Kong's former Kai Tak airport.

The policy will also restrict the resale of residential units to locals for 30 years. Incorporated companies will also not be allowed to purchase them. The policy is part of Leung's election promises to tackle the city’s worsening housing problem.

"Hong Kong's land for property is rare and precious resource, when using this land, we must make it a priority to fulfill the housing needs of the Hong Kong permanent residents," Leung said.

"This plan is the first of its kind because we have never had a policy like this in the past," Leung added.

The announcement came after Leung disclosed a series of measures last week to cool the red-hot property market. These measures include providing some 65,000 new units in the next three to four years and boosting land supply by converting 36 sites meant for government and public use to residential property to provide space for nearly 12,000 homes.