Hong Kong authorities began to include applicable provisions of the National Security Law in the terms of land sales and short-term leases in the Asia financial hub, the Hong Kong Economic Times reported on Monday (Feb 13), citing government information.

The Lands Department’s move empowers the government to disqualify bids and suspend short-term leases due to national security reasons, the report said, adding the terms had been included in the latest land sales.

That sent Hong Kong property stocks down as much as 4.9 per cent to the lowest in six weeks, compared with a 0.1 per cent slip in the benchmark Hang Seng Index.

The Lands Department did not immediately response to Reuters’ email request for comment.

“It suggests that developers will be even more cautious in putting a bid in land sale,” said Steven Leung, a sales director at UOB Kay Hian.

In January, the Lands Department said all four tenders received for the sale of a residential site in Stanley on Hong Kong Island had been rejected as their tendered premiums did not meet the government’s reserve price for the site.

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Hong Kong property groups CK Asset, Hang Lung Properties, Sun Hung Kai Properties, Henderson Land and New World Development fell between 0.8 per cent and 6.7 per cent

Private home prices in the city, one of the most unaffordable territories in the world, fell 15.6 per cent in 2022 in the first annual drop since 2008.

The National Security Law, which punishes subversion, collusion with foreign forces and terrorism with up to life in prison, was imposed by Beijing on the former British colony in 2020.

Western governments and rights groups have criticised the law for causing the deterioration of freedoms and the rule of law. Hong Kong and Chinese authorities say it is necessary to restore stability after anti-government protests in 2019. REUTERS