The Land Supply Was Lag behind, only 33% of the Full-Year Target Had Been Achieved in the First Half of the Fiscal Year. The Property Market Problems Are Difficult to Solve.

28Hse Editor  2020-06-27 
The supply and demand for private homes in Hong Kong are seriously out of balance. Only two residential official lands in Sai Kung and Tai Po Kau were launched in the second fiscal quarter (July-September) of the fiscal year, providing a total of 160 units, the smallest in history. Together with the 2,550 units provided by MTR LOHAS Park Phase 13, the residential land supply in the next quarter will be 2,710 units, an increase of 71% quarterly. With the private housing land supply for 1,580 units launched in the first fiscal quarter, the supply in the first half of the fiscal year was 4,290 units, accounting for 33% of the annual supply target of 12,900 units. It means the progress needs to speed up in the second half of the fiscal year. The analysis believes that the market may not have enough purchasing power due to the economic recession and the epidemic. The government is under pressure to meet the land supply target for private housing this year. Besides, the government will launch two commercial land sites in the next quarter, including the market-focused New Central Harbourfront king land, which will provide a total of 2.874 million square feet of commercial floor space. Journalist(Leong Yuet Kam) In the first half of the fiscal year, there was so little supply of official land for private homes, and the market was worried about whether the government could meet the annual supply target of 12,900 units. The Director of the Development Bureau, Woo Wai-Lun, pointed out yesterday that, plus with the MTR LOHAS Park phase 13, three residential sites will be launched next quarter, involving 2,710 units, a new high in the past three quarters, not low. Together with the 1,580 units of private residential land supply launched by the government in the first quarter, the supply of individual residential units in the first half-year was 4,290 units. Woo Wai-Lun: I hope that policy about private reconstruction can be supplemented. He emphasized the supply target of 12,900 units of private residential land for the whole year that mentioned at the beginning of this year, 9,000 units would be launched by the government, and individual reconstruction projects would drive another about 4,000 units. He pointed out that the government will launch a lot of private residential land in the second half of the year, and is confident that the goal of close to 9,000 units can be achieved. But the 4,000 units of reconstruction projects in the private market rely on market operations, and the government has difficulty in controlling it. The Managing Director of Centaline Surveyors Limited, Lai Kin-Fai, believes that the government should not calculate the private redevelopment of old buildings. There have been many uncertainties in the market, especially in the past six months, including social movements and global epidemics, which will affect private reconstruction or M&A investment. The government has set a target for private housing supply for the year to be 12,900 units, but it is estimated that only about 4,000 units can be built in the first half of the year. He believes that the government has the responsibility to seek land, regardless of booming or dull markets actively. The government's latest civil servant cooperative project has the right direction and can unlock the development potential of urban areas. However, the redevelopment process is complicated, and it takes time to acquire. It is recommended that the government simplify the application for redemption land premium and shorten the approval time. At the same time, in addition to accelerating the current two pilot projects in Kowloon City District, we should actively study the possibility or timetable for the acquisition and reconstruction of other civil service cooperative projects and normalize the plan. Poon Hou-Yee, a land and housing researcher at the Our Hong Kong Foundation, also pointed out that land supply in the first two quarters of this fiscal year was only about 30% of the annual target of 12,900 units. The goal of 12,900 units has been lowered from the previous yearly target of 18,000 units and 13,500 units. It can be seen that the situation of housing supply cliffs continues. All railway lands have already been used. It is afraid that there would be a 3-year gap. Poon Hou-Yee also pointed out that the land stock on the railway is rapidly consumed, reflecting that the government's inventory has become less and less. The residential supply for the next fiscal quarter will mainly come from LOHAS Park phase 13, which is already the last phase of LOHAS Park. According to the information, the MTR plans to tender sell the Wong Chuk Hang Station project by 2021 or before, and by 2024 or later for the Kam Sheung Road Station phase 2. Assuming that there would be no breakthrough in the review or planning progress of the Pat Heung Maintenance Center, Siu Ho Wan Depot, and two ventilations, Hong Kong will experience a "gap for the supply of railway on top projects" for at least three years in 2021-24. The valuation for LOHAS Park Phase 13, including 2550 units, is HKD10.5 billion. The Senior Manager of Centaline Surveyors Limited, Ng Ting-Sum, expresses that the only large-scale residential land in the next quarter is LOHAS Park phase 13, which is located in the middle of Phases 5 and 8. It is estimated the sq ft floor area land price is HKD7,000, with a total value of about HKD10.5 billion, due to its advantages of the seaside, railway concept, and the current perfect supporting facility in LOHAS Park. The Ho chung land site in Sai Kung, among the two government residential official lands, is attractive, but is noisy and crowded due to its roundabout location. About the property prices in Marina Cove in the same district, it is estimated the sq ft floor area land price would be HKD8,000, with a total value of HKD460 million, because the supply of such property is less. The residential land in Tai Po Kau, Tai Po, with an estimated supply of about 60 units, will be developed into a low-density residential project. The current transportation facilities are not well-established. It is estimated the sq ft floor area land price will be HKD5,000, with a total value of HKD490 million.
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