Li Ka-shing backs HK property curbs

HONG KONG:

Li Ka-shing, Asia’s richest man, backed recent measures by the Hong Kong government to curb an “unhealthy” surge in property prices that’s turned the city into the world’s most expensive housing market.“If prices goes up every day, and a lot of people can’t afford to buy, this would be unhealthy,” Li said after his flagship developer Cheung Kong Holdings Ltd. (1) reported lower property sales yesterday. “The Hong Kong government has said it wants a stable market.”

Li’s comments come after Cheung Kong last month sidestepped government curbs on home sales by selling hotel rooms, before Hong Kong Chief Executive Leung Chun-ying widened the restrictions to include commercial property. Cheung Kong this month became the first major developer to cut prices at an apartment project, with Deutsche Bank AG forecasting home value in the city may decline as much as 20 percent over two years.

“We expect Cheung Kong to be more responsive in adjusting prices to suit the prevailing market conditions,” Deutsche Bank AG analysts Jason Ching and Tony Tsang wrote in a report dated yesterday. The company “has a very good track record of expanding market share, even in difficult markets.”

Shares of Cheung Kong rose 0.4 percent to HK$113.70 at the close of trading. The earnings statement came after the market closed yesterday. Net income fell 30 percent to HK$32.2 billion ($4.1 billion), beating the HK$25.7 billion average estimate of 11 analysts surveyed by Bloomberg.

Hong Kong’s home prices have doubled in the past four years on record low mortgage rates, a lack of new supply and an influx of mainland Chinese buyers, raising concerns that housing is becoming unaffordable for the general public.