LCQ5: The "Hong Kong Property for Hong Kong People" policy
Following is a question by the Hon Tony Tse and a reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (June 11):
The Chief Executive (CE) announced the implementation of the "Hong Kong Property for Hong Kong People"(HKPHKP) policy in 2012, with the objective of according priority to meeting Hong Kong people's needs for home purchase. Under this policy, the authorities will, at the time of selling selected sites, add land lease conditions restricting the sale of the flats developed at the sites to Hong Kong permanent residents (HKPRs) for 30 years from the date of the relevant land grants. The Government executed the policy only once when two residential sites in Kai Tak were offered for sale by tender in March last year. In response to press reports that the policy had been shelved by the Government, CE said earlier on that the policy was already well received by the market and proved to be feasible, and therefore it could be activated within a short period of time when necessary in future. The Secretary for Development also indicated earlier on that at this juncture, there was no pressing need to apply the policy to other sites available for sale or make it a long-term measure for implementation. In this connection, will the Government inform this Council:
(1) whether it has conducted any comprehensive review on the contents, execution and effectiveness of the HKPHKP policy, its impact on the property market and home purchases by members of the public, as well as on the land lease conditions for implementing this policy, etc.; if so, of the outcome and the improvement recommendations in this regard; if not, the reasons for that, and whether it will conduct such a review;
(2) whether it will implement the HKPHKP policy continually during the current term of CE; if it will not, of the reasons for that; if so, the considerations, criteria and indicators based on which the authorities will decide whether to reactivate the relevant measure; whether there is any plan to apply the HKPHKP policy to the sites in the land sales programme of the current financial year; if there is, of the details (including the land lease conditions, and the number and average size of the residential flats involved); if not, the reasons for that; apart from the HKPHKP policy, of the existing policies put in place, and whether it will implement any new measures, to assist HKPRs and accord priority to them in home purchase; and
(3) whether it has assessed the impact of the HKPHKP policy on the prices of the relevant residential sites and developers' willingness to submit tenders for the sites; if so, of the details and outcome of the assessment; if not, the reasons for that?
First of all, please allow me to set out the policy objective and background of the "Hong Kong Property for Hong Kong People" (HKPHKP) measure.
The HKPHKP measure aims at giving priority to Hong Kong Permanent Residents (HKPRs) in making use of our scarce residential land resources when there is a tight demand-supply situation in the property market. The HKPHKP measure does not aim at subduing housing demand, suppressing property prices or subsidising home ownership. The measure is only applicable to flats constructed on residential sites subject to the HKPHKP pilot scheme but does not apply to the existing housing stock in the market or new housing supply not subject to the pilot scheme.
Under the HKPHKP pilot scheme, the Government imposes a restriction on selected residential sites through land lease conditions that, for a period of 30 years from the date of land grant, the residential flats constructed on such sites must be sold only to HKPRs. In other words, the restriction applies to sale to first-hand buyers and further re-sale to all subsequent buyers in that 30-year period.
The Government sold two residential sites in Kai Tak under the HKPHKP pilot scheme by tender in June 2013. The relevant land sale conditions and arrangements for implementing the HKPHKP measure are readily available for launching other HKPHKP sites anytime depending on the market situation. The Government will take into consideration factors like the market situation in deciding whether to apply this measure to individual residential sites available for sale. The current position of the Government is that, given that various demand-side management measures implemented by the Government targeting the property market have effectively curbed the demand for residential flats from non-local purchasers, there is no pressing need to extend the HKPHKP measure to other sites at this juncture. The Government will continue to closely monitor the property market and take appropriate measures, including the HKPHKP measure, to facilitate healthy development of the property market.
I reply to the three-part question as follows:
(1) The pilot scheme, which has so far been applied by the Government to two sites in Kai Tak, has achieved the policy objective of the HKPHKP measure, i.e. giving priority to HKPRs when making use of our scarce residential land resources. The Government will conduct a comprehensive review in due course on the policy objective and other aspects of the scheme, including details of the measure, its implementation, effectiveness and reaction, etc., after the completion of residential developments and sale of flats at the two Kai Tak sites.
(2) The relevant land sale conditions are readily available for implementing the HKPHKP measure. The various demand-side management measures implemented by the Government targeting the property market have effectively curbed the demand for residential flats from non-local purchasers. There is no pressing need to extend the HKPHKP measure to other sites available for sale at this juncture. The Government will continue to closely monitor the property market and take appropriate measures to facilitate healthy development of the property market. Depending on the market situation, the Government may apply the HKPHKP measure to suitable sites in the quarterly land sale programmes where necessary.
As regards subsidised housing, the Government will increase the supply of subsidised flats to facilitate home ownership of middle to low-income families, through the Home Ownership Scheme implemented by the Housing Authority and subsidised sale flats scheme by the Hong Kong Housing Society.
(3) The tender of the two residential sites subject to the HKPHKP pilot scheme received 16 and 13 bids respectively and they have been sold. The HKPHKP measure is well received by the market.
Ends/Wednesday, June 11, 2014
Issued at HKT 16:10