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Translation of the remarks made by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the meeting of the Legislative Council Panel on Planning, Lands and Works

Following is the translation of the remarks made by the Secretary for Housing, Planning and Lands, Mr Michael Suen, at the meeting of the Legislative Council Panel on Planning, Lands and Works today (April 26):

President,

The information paper provided to Members gives an overview of the 2005-06 Application List. I wish to briefly make the following four points:

Firstly, it has been Government's policy to provide sufficient land to meet the development needs of our community. I wish to stress that Government's operation concerning land sale has all along been transparent. It adheres to two major principles, namely free market and openness plus fairness. The land goes to the highest bidder.

Secondly, Government prepares each year's Application List having regard to factors such as the conditions of the property market, the needs of the property sector and the overall economic situation. It is on the basis of these factors that we determine the amount, size, location and use of the sites to be included in the new Application List. Government's aim is to work out a balanced mix of sites for sale to facilitate the stable development of the property market.

The past year saw a boom in the property market. It gave rise to worries of inadequate land supply. I wish to point out that the Application List system provides a market driven mechanism and allows flexibility in determining the quantity and timing of land to be put up for sale. The system provides clarity, consistency and certainty to the property sector as well as other market players.

In fact, apart from the Application List, there are other ways for developers to acquire land for property development, such as modification of lease conditions for lots owned or taking part in the property development projects of the two railway corporations and the Urban Renewal Authority. Together with the 2005-06 Application List, there is no shortage of land supply in the market.

Thirdly, in the policy statement announced on 13 November 2002, it was clearly stated that the supply of government land would mainly be provided through the Application List. There have been calls from the property trade requesting for resumption of scheduled land auction by the Government to supplement the Application List system. In this respect, I consider clarity, predictability and continuity of Government's repositioned housing policy essential to providing certainty about our policy. We will of course closely monitor market trend and development and carefully listen to the views of various sectors in order that our mechanism could suit the prevailing situation.

Fourthly, there are views that the Lands Department sets trigger prices too high resulting in few sites being triggered. However, the prices at which sites were sold during the past six land auctions are much higher than the trigger prices. This shows that it is groundless to say the trigger prices are too high. There are suggestions that Government implements the so-called "high land price policy". This is totally unfounded. Government assesses land prices on the basis of open market value, taking into account prevailing market conditions. This is no different from the way land prices are assessed in the market. Different sites are of different development potential and density on account of their different size, locations and uses. Hence, their open market value varies.

My colleagues and I are happy to answer Members' questions and hear their views. Thank you, President.

Ends/Tuesday, April 26, 2005

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