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Legislative Council Question 10 : "Land Supply" by the Hon Lee Wing-tat and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council

Following is a question by the Hon Lee Wing-tat and a written reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (March 8):


During the five consecutive months from September 2005 to January this year, no real estate developer applied for triggering of land in the Application List for the Sale of Government Land (the Application List) for auction or tender. Besides, it has been reported that the negotiations between Kowloon-Canton Railway Corporation and the Lands Department (LD) on the premium for lease modifications are progressing slowly, hence delaying the timetable for tendering a number of property development projects along railway alignments. In this connection, will the Government inform this Council:

(a) whether it has assessed if the supply of land and private residential flats will fall short of demand in the coming few years due to the above circumstances;

(b) of the measures to improve the Application List system, and whether it will consider disclosing the reserved prices of sites in the Application List or the basis for determining such prices, so as to enhance the transparency of the system;

(c) of the measures to expedite the negotiations on lease modification premium between the LD and the two railway corporations as well as the Urban Renewal Authority; and

(d) whether it will consider resuming the sale of land by auction on a regular basis?


Madam President,

My reply to the four-part question is as follows:

(a) The Application List system is market-oriented and the Government's role is to supply adequate land to meet market demand.

On the supply of land, there are 32 sites on the Application List, covering a total area of about 24.2 hectares. In addition, developers can acquire land for residential development through other channels. For example, they can purchase land in the open market, acquire and assemble existing property for redevelopment, modify the land lease for the land they hold for relevant development, and participate in property development projects undertaken by the two railway corporations and the Urban Renewal Authority (URA). In the current financial year, apart from the major case of land exchange and lease modification approved, URA, MTR Corporation Limited (MTRCL) and Kowloon-Canton Railway Corporation (KCRC) have invited developers to submit letters of intent in response to the tendering of six projects, some of which have had their tenders invited already. In addition, according to the latest information, there are some 55 000 flats unsold or under construction in the market. Therefore, we believe that there will be adequate supply of land and private residential flats in the coming few years.

(b) We introduced improvement measures for the Application List system twice last year to enhance its smooth operation, with a view to facilitating the healthy and stable development of property market. Measures introduced in March and June 2005 have greatly streamlined the relevant procedures, reduced the risks and costs of triggering land, and relaxed the requirements for triggering land as well.

Upon receipt of an application for triggering a sale site, the Lands Department will determine the reserve price according to the open market value in the light of the prevailing market conditions. As no prior assessment will be made, it is not possible to set out the reserve prices of various sites in the Application List. The reserve prices are determined in accordance with recognised professional land valuation principles which are accepted and well known to the surveying profession and developers.

(c) The tendering exercises of the property development of the two railway corporations are progressing well in general. Ad hoc problems or delays are mainly caused by factors other than the agreement on premium (such as objection raised by the community, objection to gazetting of roads and requests for re-designing). These factors will be considered carefully and handled properly. We will continue to monitor and co-ordinate the property development of the two railway corporations. Regarding the URA, as the Government grants land to it for redevelopment purpose at nominal premium, there is no question about premium negotiation.

(d) The Government decided that, with effect from January 2004, Government land would be provided through the Application List system. This position remains unchanged. At present, the Government has no plan to resume scheduled land auctions. There are suggestions that scheduled auctions of a limited scale for commercial/business sites should be introduced. We may consider this suggestion.

Ends/Wednesday, March 8, 2006
Issued at HKT 14:44