Sustaining steady land supply
A few days ago, I announced the Government’s 2017-18 Land Sale Programme, which comprises 28 residential sites capable of providing about 18 900 flats, three commercial/business sites and one hotel site which can provide about 172 000 square metres of floor area and about 550 rooms respectively. Other sources of supply include railway property development projects capable of providing a total of some 8 030 flats; projects of the Urban Renewal Authority (URA) capable of providing about 480 units; and private redevelopment or development projects which could provide about 4 200 units (based on the past 10-year average figures). Combining all the aforementioned sources, it is estimated that the total potential private housing land supply in the next financial year is capable of providing about 31 620 flats. We will continue to work hard and closely monitor the market situation. We will spare no effort in identifying suitable sites for development. Our aim is to ensure a steady and sustained land supply to meet the community’s land demand for private housing and other uses.
I notice that the community has expressed concerns over the following areas after the announcement of the Land Sale Programme. Let me share my views here.
(1) How to ensure sustained land supply in future?
The Government’s determination to maintain a steady and sustained land supply is unquestionable. We are proactively adopting a multi-pronged approach to ensure short, medium to long-term land supply. For example, we have been carrying out land use reviews and have identified some 190 sites with housing development potential in the past few years. Most of the sites can be made available for housing development in the five financial years from 2014-15 to 2018-19, capable of providing more than 250 000 public and private housing flats. Among these sites, 94 have either completed the rezoning procedures or have been allocated for housing development. Moreover, as announced in the 2017 Policy Address, 26 additional potential housing sites have been identified. It is estimated that most of these sites could be made available for housing development between 2019-20 and 2024-25 to provide an additional supply of more than 60 000 flats, of which over 80 per cent will be public housing flats.
Although we have all along encountered many difficulties and challenges in the land identification process, our efforts and persistence over the past few years have paid off. We are confident in keeping this momentum. In the 2016-17 Land Sale Programme, the Government put up for sale 21 residential sites capable of providing 14 510 flats. This is a record high in terms of flat production capacity since the Government-initiated sale was resumed in 2010-11. Based on the current situation, it is estimated that land put up for sale by the Government in the five financial years from 2012-13 to 2016-17 has a capacity to produce about 50 960 flats, around 1.5 times that for the preceding five financial years (around 20 700 flats from 2007-08 to 2011-12).
Taking into account other sources of private housing land supply, the overall private housing land supply in 2016-17 is estimated to have a capacity to provide 19 780 flats. The annual target of private housing land supply has been met for three consecutive years. In the five financial years from 2012-13 to 2016-17, the overall private housing land supply from various sources is estimated to have a capacity to provide 95 500 flats, largely meeting the Government’s supply target of these five financial years. With the successive completions of flats from the increased supply, the flat supply in the market will increase accordingly and the public will have more choices. In the first quarter of 2017-18, private housing land supply from different sources will make up about 45 per cent of the annual supply target of 18 000 flats. In the remaining quarters of the year, the Government will formulate the Land Sale Programme as appropriate having regard to the progress of relevant work, the market conditions and the supply situation of other sources, with a view to achieving the target of private housing land supply and ensuring a steady development of the property market.
Apart from government land sale, railway property development projects are another important source of private housing land supply. With the support from the MTR Corporation Limited (MTRCL), 15 railway property development projects have been successfully tendered so far, capable of providing around 23 900 flats. The remaining railway property development projects not yet tendered are capable of providing some 14 000 units in the short to medium-term. We will continue to encourage the MTRCL to implemente its projects.
(2) Whether to impose restrictions on the “size” and “number” of flats in land sale conditions in response to the growing number of small-sized flats in the market?
We are concerned about this phenomenon, and will closely monitor the market trend. The process of housing development usually takes a few years from the sale of site to completion of new buildings, during which the market is subject to constant changes. While allowing the market to adjust itself, we will pay close attention to the market conditions and consider introducing appropriate requirements in land sale conditions when selling individual housing sites, so as to make timely in appropriate response to market needs.
(3) Are Mainland capitals boosting land and flat prices?
Hong Kong is an open economy. Capitals from all over the world can acquire land in Hong Kong. This is a normal business activity in which the Government should not intervene. In fact, based on information provided by the bidders in their tender documents (including information on their parent companies (if applicable)), and analyses made from public information available at the Companies Registry (without analysing shareholding structure), only 17 out of the 137 housing, commercial/business/hotel and industrial sites (i.e. about 12 per cent) sold by the Government were believed to be acquired by companies associated with or under joint ventures with Mainland enterprises1 during the period of April 2012 to end-February 2017. Moreover, land premium and property prices are not necessarily correlated. It is because there will always be a time lag of a few years before residential buildings are completed and made available to the market after land sale. Meanwhile, developers will have to bear the risks of the ebb and flow of the property market amid the ever-changing market conditions and other market factors.
The Development Bureau will continue to work with relevant departments to increase land supply by adopting a multi-pronged strategy, with a view to meeting the housing, economic and livelihood needs of the community. We will also seek to build up a land reserve to address the long-term housing demand-supply imbalance in the past. Various initiatives of increasing development intensity, rezoning existing sites, developing the fringe of urban areas, pressing ahead with new development areas, releasing brownfield sites in the New Territories, studying the feasibility of reclamation, and other ways to optimise the use of Hong Kong’s land resources would be carried out at the same time, not focusing on one but pressing ahead with all, as there is simply no single and immediate solution to resolve land shortage, nor a panacea that can boost land supply without causing impact to the society. I call on members of the public to make an all-out effort, with mutual respect and understanding for differences, to support the Government’s various short, medium and long-term land supply initiatives, so as to address the needs of the society in a timely and efficient manner.
1The term “Companies associated with Mainland enterprises”, based on general understanding includes state-owned enterprises and private commercial establishments on the Mainland, etc. Tenderers were not required to provide information on company background or source of capitals to when the Government analysed of the relevant information.
26 February, 2017
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