National security clauses have been added to land sale and short-term rental documents by Hong Kong's Lands Department, according to a statement on Monday by the Development Bureau.

The move allows the government to suspend short-term leases and disqualify bids for national security reasons, Hong Kong Economic Times reports.

"Safeguarding national security is the shared responsibility by the entire Hong Kong society," said the Development Bureau to Reuters news agency.

Hong Kong authorities started to include applicable provisions of the National Security Law within the terms of land sales and short-term leases in the city, which led the Hong Kong property stocks index to fall 4.9%, a six-week low, compared to a 0.1% drop in the Hang Seng Index.

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

Last month, according to the Lands Department, four tenders received for a residential site sale in Stanley on Hong Kong Island were denied for not meeting the government's reserve price.

Yet, in contrast, the first land sale, including the relevant terms, had six bidders and was sold by the end of last year, Reuters reports.

"For law-abiding bidders, the relevant terms should not affect their willingness to bid, and we are not worried that the terms will affect the government's push for land," the bureau stated.

The prices of private homes in Hong Kong fell 15.6% last year, the first annual decline since 2008.

The National Security Law was imposed by Beijing on Hong Kong back in 2020 and has been criticised by Western governments and rights groups for leading to the deterioration of freedoms and the rule of law. However, Chinese authorities deem it necessary to restore stability following 2019's anti-government protests.

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