LCQ3: Sites with flat size restrictions
Following is a question by the Hon Wong Kwok-kin and a reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (March 30):
The first land lot allocated for "flats with limited floor areas" (i.e. the minimum number of flats as well as the smallest and largest floor areas of flats being specified in the conditions of sale) was recently granted through tender to a developer at a price over $2.4 billion. Given that market estimations are that the per-square-foot price of flats in the development project, which is located in Yuen Long, will reach $6,000, quite a number of people in the sandwich class consider that they cannot afford those flats, hence the aforesaid land sale conditions will not help them acquire home ownership, and will on the contrary further push up the prices of small and medium-sized residential units. In this connection, will the Government inform this Council:
(a) whether the policy objectives for the measure on allocating land for flats with limited floor areas include helping the sandwich class purchase their first home; if not, whether the authorities have clearly informed the public of the purpose of the measure; whether the authorities will reconsider constructing Home Ownership Scheme flats because the measure fails to assist the sandwich class in acquiring home ownership, so as to complement the insufficient supply of affordable small and medium-sized flats on the market;
(b) in considering the tender price of the land allocated for flats with limited floor areas, whether the authorities have taken into account that if the price of the successful bid is too high, it will not only fail to help curb the current high property prices, and may on the contrary further push up the prices of small and medium-sized residential units; if they have, what solutions the authorities have; if not, of the reasons for that; given that a number of urban sites allocated for flats with limited floor areas will soon be put on sale by tender, what ways the authorities have to prevent developers packaging small and medium-sized residential units as luxury flats for sale, aggravating the situation of such units being turned into luxurious ones; and
(c) whether the authorities will review the sale conditions for land allocated for flats with limited floor areas as soon as possible; if they will, whether conditions such as "ceiling on the prices of flats" and "target buyers of flats" will be added to ensure that the supply of small and medium-sized residential units will increase, the sandwich class will be assisted in acquiring home ownership, as well as the upward spiral of property prices will be alleviated; if they will, whether the review will be completed before inviting tender for the next lot allocated for flats with limited floor areas; if not, of the reasons for that?
I reply to the three parts of the question as follows:
(a) In last year's 2010-11 Budget Speech, the Financial Secretary (FS) announced for the first time that the Government was prepared to specify in the land sale conditions the minimum number of flats to be constructed and their size restrictions. The aim was to increase the supply of small and medium-sized flats in the market. The first residential site with flat size restrictions sold by tender is the development project in Yuen Long referred to in the question.
The only aim of selling sites with flat size restrictions is to increase the supply of small and medium-sized flats in the market. This policy objective was made clear in either FS's Budget Speech or the subsequent press conference when I presented the 2010-11 Application List and the related press release. The Government has never said that the measure is also there to help the sandwich class acquire home ownership or provide affordable flats. In this year's 2011-12 Budget Speech, FS announced again that subsequent to the tender of the site with flat size restrictions in Yuen Long, the Government would put up for sale in the coming year five residential sites which will be restricted through imposing similar land sale conditions for the construction of small and medium-sized flats. The aim remains to be one of increasing the supply of small and medium-sized flats. Thereafter, I made similar statements at the press conference on the 2011-12 Land Sale Programme. Recently, the Lands Department has announced that the tender invitation for the two sites with flat size restrictions located at the junction of Bulkeley Street and Gillies Avenue South, Hung Hom, and Lee Kung Street, Hung Hom, respectively will commence on 29 April 2011.
As regards the policy on helping citizens acquire their home ownership, Members may make reference to the My Home Purchase Plan (MHPP) to be implemented by the Government and the Hong Kong Housing Society. The Development Bureau has assisted the Transport and Housing Bureau in earmarking sites in Tsing Yi, Sha Tin, Diamond Hill, Tai Po, Tuen Mun and other areas which could provide a total of some 5,000 flats. The first MHPP project in Tsing Yi will provide about 1,000 small and medium-sized flats. The project will invite applications in 2012 and be completed in 2014. The second MHPP project in Sha Tin will provide, depending on flat sizes, about 700 small and medium-sized flats, while the exact number of flats to be built is yet to be confirmed. I understand that the Transport and Housing Bureau will expedite the preparatory work for MHPP as far as possible so that MHPP can assist those with home purchase needs who can afford to buy a flat as soon as possible.
As to whether the Government will re-consider the construction of Home Ownership Scheme flats, the Secretary for Transport and Housing has repeatedly explained the Government's position. Some members of the public have called for the resumption of the Home Ownership Scheme. The underlying reason is their hope that this would provide greater opportunities for people to purchase affordable homes. The policy objective of the Government is to ensure a healthy and steady development of the property market. The Government announced a basket of short, medium and long-term measures in four areas to ensure the healthy and steady development of the property market. The four areas include increasing land supply to tackle the problem at source, combating speculative activities, enhancing the transparency of property transactions, and preventing excessive expansion in mortgage lending.
(b) Just as my reply in part (a) above pointed out, the aim of selling sites with flat size restrictions is to increase the supply of small and medium-sized flats through specifying the minimum number of flats to be constructed and their sizes in the land sale conditions. The tender price is a response of the market to the tender. Flat prices are determined by developers having regard to the market situation at the time of flat sales.
(c) The aim of selling sites with flat size restrictions is to increase the supply of small and medium-sized flats in the private property market. Therefore, we have not added conditions such as "ceiling on the prices of flats" and "target buyers of flats" in the land sale conditions. There was no such requirement concerning flat prices and target buyers for the Yuen Long site sold earlier. There will also be no such requirement for the two Hung Hom sites with flat size restrictions to be sold later.
Ends/Wednesday, March 30, 2011
Issued at HKT 17:29