LCQ18: Land supply for private housing

Following is a question by the Hon Frederick Fung and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (November 6):

Question:

The Budget of this financial year (this year) stated that (i) the Government's aim in land supply for private housing is to maintain on average the provision of land for building about 20 000 residential units (units) each year, (ii) 46 residential sites would be included in the Land Sale Programme (LSP) for this year, providing about 13 600 units in total, and (iii) all the major sources of land supply for private housing together (including Government's LSP, railway property development projects, projects of the Urban Renewal Authority, and lease modifications/land exchanges or other private developments) would provide land for building some 25 800 units this year. However, according to the announced LSP, the Government's land sale in the first three quarters of this year can produce only about 8 200 units in total, reaching merely 60% of the full-year target of 13 600 units. In addition, it has been reported in the press that in the first three quarters of this year, the land put up by the Government for sale plus other sources of supply taken together can produce only about 8 900 units in total, which is well below the target of 25 800 units mentioned in the Budget. In this connection, will the Government inform this Council:

(a) whether the authorities expect that they can put up for sale in the fourth quarter all the rest of 46 residential sites planned to be sold this year; if not, of the reasons for that; among them, of the number of sites that are in the process of applying to the Town Planning Board for rezoning, as well as the expected date of completion of the process; of the latest estimate on the number of units to be produced by the Government's land sale this year;

(b) of the respective numbers of units that can be produced by other major sources of land supply for private housing this year, apart from the Government's LSP; of the respective numbers of units to be produced by the land supply so far this year and units forecast to be produced by the full-year land supply; whether there will be a gap between the current full-year forecast and the 25 800 units mentioned in the Budget; if so, of the reasons for that; and

(c) whether the authorities have assessed if the number of units to be produced by land sold this year was miscalculated or exaggerated in the first place; whether the authorities have assessed if the untrue targets and estimates for housing supply will have an impact on the market and raise doubts among members of the public about the Government's ability to solve the problem?

Reply:

President,

To ensure the healthy and steady development of the residential property market, the Government announced in the 2010 Policy Address that in the next 10 years, on average land needs to be made available annually for some 20 000 private residential flats. The sources of private housing land include the Government's Land Sale Programme (LSP), railway property development projects, redevelopment projects of the Urban Renewal Authority (URA), projects subject to lease modification/land exchange and private redevelopment projects not subject to lease modification/land exchange. The Government also pointed out that the relevant figure is not a fixed target of housing land supply. The aim is to build up a sufficiently large land reserve over a period of time to ensure stable land supply for the market.

Among the various sources of private housing land mentioned above, except the LSP which is fully led by the Government, the land provided by other projects depends on the implementation progress of relevant organisations, corporations and land owners.  When the Government announced the 2013-14 LSP on February 28, 2013, the estimated land supply for 25 800 units was a consolidated forecast from the above various sources of private housing land supply at the time. Except the Government's LSP, the estimated flat numbers from railway property development projects and redevelopment projects of URA were provided by relevant organisations at the time, while the estimated flat numbers from projects subject to lease modification/land exchange and private redevelopment projects not subject to lease modification/land exchange were based on the average figures in the past 10 years.

As regards the LSP which is fully led by the Government, the Government has been putting up government sites for sale in a very proactive manner. Starting from 2013-14, the Government has abolished the Application Mechanism to fully take the lead in selling government sites. It also announces land sale programmes in advance on a quarterly basis, providing transparency and certainty for the market.

I reply to the three parts of the question as follows:

(a) The 2013-14 LSP announced by the Government in February 2013 included 46 residential sites capable of producing about 13 600 flats. In June 2013, the Government announced that three sites in Shek Mun, Shatin would be excluded from the 2013-14 LSP and designated for public housing purpose, while six new residential sites would be added to the 2013-14 LSP. After adjustment, the 2013-14 LSP has a total of 49 residential sites, capable of producing about 13 300 flats.

In the first three quarters of 2013-14, a total of 24 residential sites have been sold/will be put up for sale, capable of producing about 8 200 flats, equivalent to the total number of flats that could be built on the land sold by the Government in the whole year of 2012-13. This demonstrates the Government's determination to increase the land supply for private housing. Excluding the 24 residential sites already sold/to be put up for sale in the first three quarters of 2013-14, there are 25 residential sites left in the 2013-14 LSP. The Government will announce the land sale programme for the fourth quarter of 2013-14 in due course.

Subject to the progress of statutory or other procedures concerning individual sites, the Government plans to sell all the residential sites in the 2013-14 LSP, and depending on market situation and the progress of site search, add sites ready for sale to the LSP in a timely manner, with a view to increasing housing land supply to the greatest extent.

There are altogether 22 sites in the 2013-14 LSP that are subject to statutory planning procedures of amending the relevant Outline Zoning Plans (OZPs) for rezoning or revising development parameters. As at end October 2013, 16 of these sites had completed/commenced the statutory planning procedures; two sites designated for public housing purpose; four sites pending the commencement of such procedures. In general, the statutory planning procedures involved in the rezoning of land use have to be conducted and completed within the time limit specified in the Town Planning Ordinance, but the actual time taken to complete such procedures for each site varies with specific circumstances. The departments concerned have accorded priority to dealing with the relevant work in order to expedite the completion of such procedures.

(b) and (c) Railway property development projects have always been one of the important sources of private housing land supply. The West Rail property development project at Long Ping Station (South), capable of producing about 720 units, was tendered out in June 2013. We are working with the MTR Corporation Limited (MTRCL) on revising the scheme of the West Rail property development project at Yuen Long Station, which is planned for tendering in 2013-14. In addition, MTRCL indicated in August 2013 that, subject to market conditions, it planned to re-tender the property development projects at Tai Wai Station and Tin Shui Wai Light Rail Terminus, and tender the LOHAS Park Package 4 project within this financial year. It is estimated that these four railway property development projects are capable of producing about 7 880 units.

The projects planned to be tendered by URA in 2013-14 are expected to provide about 1 800 units. The progress of tendering these projects is affected by a couple of factors, including whether land can be resumed as scheduled. URA is reviewing the tendering progress of each project and will invite tenders for the projects as soon as they are ready.

As projects subject to lease modification/land exchange and private redevelopment projects not subject to lease modification/land exchange are market-driven, it is inappropriate to predict the annual situation based on figures of individual quarters. The Government will, at the time of announcing the 2014-15 LSP, account for the 2013-14 private housing land supply from various sources.

As mentioned above, the forecast of 25 800 flats from the private housing land supply of various sources as stated in the 2013-14 Budget is not a fixed target of housing land supply, but an estimated number of private residential flats that could be produced by the housing land forecast to be available for supply to the market for private residential development in the relevant year. The actual supply of housing land depends on the progress of relevant statutory or other procedures, government land sale results, project tendering programmes of MTRCL and URA and the tendering results, and developers' initiative to carry out lease modification/land exchange and redevelopment projects. These are inevitably affected by market factors.

Housing is the livelihood issue which is of prime concern for most in the community. Decent housing is the foundation of a stable society. Tackling the housing issue is one of the priority tasks of the Government. The Government's resolve to increase residential land supply remains firm. The relevant departments are adopting a multi-pronged strategy to increase land supply in the short, medium and long term, through the continued and systematic implementation of a series of measures, including the optimal use of developed land as far as practicable and creating new land for development.


Ends/Wednesday, November 6, 2013
Issued at HKT 14:30

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