Hong Kong Wen Wei Po News (By Yan Lunle)
Insufficient land development caused the lack of land supply for private residence. Yesterday, the Development Bureau announced the land sales plan in the fourth quarter of the fiscal year (January-March 2019). The total supply will be 3,950 units from different land sources, and there are 13,850 units will be provided in this fiscal year together with the 9,900 unit in the first three quarters, which are only 77% of the target that 18,000 units made in the beginning of this year, with a gap up to 4,150 units. Regarding to the market concern that the reduction of land supply for private residence may increase property price, the Director of Development Bureau, Mr Wong Wai-lun, yesterday frankly said, the reduction of land supply for private residence was in line with keeping the ratio of public and private housing supply in 7:3, and believed we should inspect the supply more macroscopically because the potential first-hand private housing supply in the next three to four years will still be at a high level, while current arrangement just reflects Government's latest housing policy.
The Government will launch four governmental residential sites and one governmental commercial site in Kai Tak, Lantau and Yuen Long respectively in next quarter. The market valuation of these land sites are from about HKD 33 billion to about HKD 37 billion. In addition, the MTR will also launch a tender for the LOHAS Park phase 11, involving 1,650 units; The URA will launch two redevelopment projects at Hang On Street in Kwun Tong and Ash Street in Tai Kuk Tsui supplying 210 units. The total land supply for private residence in the next quarter will be 3,950 units, with the addition of about 230 units from private development and reconstruction projects.
The target for the next fiscal year is greatly reduced to 13,800 units.
It is worth noting that, about 9,900 units were provided in the first three quarters of the fiscal year, while only 13,850 units will be supplied in this year plus with the supply in the fourth quarter, which is far from the target of 18,000 units made at the beginning of this year. The new ratio of public and private housing supply in the 2018 Annual Progress Report of the Long Term Housing Strategy has been adjusted from the previous 6:4 to 7:3, which will be "unrealistic” if the government does not consider the relevant factors into the land supply in the next quarter, Huang Weilun explained yesterday.
In addition, the land supply for private housing has maintained at nearly 20,000 units per year for three years, while the land supply for private housing will be about 93,000 units in the next three to four years,, which is relatively large, thus reducing supply in the next quarter is appropriate, he pointed. The government will adjust the annual land supply target for private residence to 13,800 units according to the Long Term Housing Strategy in the next fiscal year,
The challenge from public housing shortage will be larger in the future.
Comparing with land supply for private residence is not qualified in one single annual, Huang Weilun believed the challenge from shortage of public housing is greater, because the demand for public housing is larger after supply ratio being adjusted into 7:3, while the current gap is still more than 60,000 units to meet the standard. The Government has implemented a number of measures to increase short and medium term supply. It seems that in June this year, the Government allocated nine private residential sites for public housing, supplying about 10,600 units in total, and it will not be ruled out that private housing land will be allocated for the use of public housing.
In addition, the Administration is also planning to increase the development density of public housing sites, increasing the maximum residential plot ratio from current 20% to 30%. The Government also intends to increase short and medium term supply through the Land Sharing Pilot Scheme. The Development Bureau will put forward relevant suggestions next year. The remaining short term and medium term land supply sources also include rezoning of land supply. In earlier, the government has already obtained 210 land sites that can be rezoned, and the rezoning of more than 140 sites have been completed or launched until yesterday.
Short term market conditions do not hinder the pace of long term land supply.
Asked if the land supply plan will be adjusted in condition that current property market is falling. Huang Weilun pointed, the property market has indeed shown a downward trend recently, however, the Government does not intend to control property price by changing the supply of land, because the property market is affected by various factors, such as the flow of funds, the Hong Kong economic situation and the trend of interest rates, while land supply is only one of the influencing factors. Land building time will last for at least 8 years, or even 12 to 13 years, therefore, the Government will not change the pace of land acquisition due to short term market price changes, otherwise, it will make Hong Kong " never get out of the difficult situation of land shortage.", He pointed.
Asked about the current situation of luxury project site in Mansfield Road in the Peak which failed in bid this September, Huang Weilun said there is no relaunching schedule yet, but they will refer to the arrangements of the cases that failed in bid in the past few years. For commercial land, a commercial and hotel site in Kai Tak will be launched in the next quarter. It is expected to provide approximately 863,300 sq ft of floor space and approximately 480 to 800 hotel rooms.