(Updates with government statement in 8th paragraph)
July 1 (Bloomberg) -- Hong Kong demonstrators took to the streets in the thousands today to protest soaring home prices and a widening wealth gap as the city celebrated the 14th anniversary of return to Chinese rule.
The demonstrators chanted slogans and carried banners calling for Chief Executive Donald Tsang to step down as they made their way through a police cordon along a route to the government’s headquarters in Central business district from Victoria Park. More than 100,000 people took part in the protest, Radio Television Hong Kong reported, citing Lee Cheuk- yan, spokesman of protest organizer Civil Human Rights Front. Three calls to the Hong Kong Police Force public relations office went unanswered.
The annual rally, in its ninth consecutive year, coincides with a decline in support for Tsang to the lowest level since he took office in 2005. Home prices have surged 70 percent since the start of 2009, while the economy has rebounded from recession in the third quarter of that year to post a higher- than-estimated 7.2 percent growth in the first three months of 2011.
“People feel they have not been able to benefit from this economic growth,” said Joseph Cheng, a political-science professor at the City University of Hong Kong. “They aren’t happy with the fact that they do not see an improvement in living standards, despite the good economic statistics.”
The city’s inflation rate accelerated to a 34-month high in May. Rising values of residential properties prompted the Hong Kong Monetary Authority on June 10 to increase the size of down payments on mortgages and tighten restrictions for overseas investors. That was the city’s fourth attempt since October 2009 to curb prices that have climbed on record low interest rates and an influx of buyers from other parts of China.
Protesters demanded Tsang, who will finish his second term as the city’s head on June 30, 2012, resume construction of government-subsidized housing. Hong Kong is the world’s most expensive place to buy a home because of a shortage of properties on the market, Savills Plc said in a report earlier this year.
“The price tag of residential home is ridiculously high now. I won’t be able to buy it no matter how hard I work,” said Raymond Song, a 29-year-old truck driver who took the street today. “The government should build more affordable flats for the citizens.”
In a response to the protest, posted to its website today, the Hong Kong government’s Information Services Department said Tsang will respond to the home affordability issue in this year’s policy address.
Financial Secretary John Tsang said on June 19 the current property market is “abnormal” and the government may take more measures to cool surging prices.
Donald Tsang’s decline in popularity mirrors that of his predecessor, Tung Chee-hwa, who fell victim to people’s dissatisfaction after an outbreak of SARS shook confidence in the city’s economy in 2003. He resigned after hundreds of thousands took to the streets calling for his ouster.
The government will tackle accelerating inflation and high property prices “prudently,” Donald Tsang said today at a celebration of the city’s return to Chinese rule in July 1997.
“My team and I will continue to work with full dedication for the betterment of Hong Kong until the last minute of office,” Tsang said.
Tsang’s popularity has declined to 46.5 in a scale of 100 in a survey of 1,000 residents taken during the week to June 8, the University of Hong Kong’s Public Opinion Programme shows. That compares with its peak of 72.3 in 2005.
A further dip in Tsang’s backing could signal a “governance crisis,” poll director Robert Chung said.
--Editors: Stanley James, Mohammed Hadi
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