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【2019 Financial Budget】Land Supply Decreases 40% And Construction of Private Houses Declines About Ten Thousand Units.

Image Caption
2019-02-28-(Thu)
【28Hse.com】  
The strict measures in property market maintain and land supply of 8800 units becomes the latest lowest in 9 years.

Hong Kong Wen Wei Po News (By Yan Lunle)

The latest financial budget plan mentioned multiple land supply measures in short, medium and long term, also announced the land sales plan for the next fiscal year. As the government changed the proportion of public to private housing from 6:4 to 7:3 last year, the potential supply of private land in the next year will reduced by about 40% to 15,500 units, and the average annual completion in the next five years will also reduce to about 18,800 units. Although the supply of private homes has declined, but the Government dose not adjust the hot measures. The Financial Secretary, Mr Chan Mao-po, said yesterday that the current property prices are still beyond the afford ability of the public, so there is no intention to revoke any demand management measures.

‘In the past two years, the Government has increased the short-term land supply by selling land, rezoning land use, developing railway properties and URA projects, including 78 land sites that enough for about 93,000 units.’ Chen Maobo expressed. Due to the substantial increase in supply before, the completion number of private houses in recent years increased. The Government initially estimated that the average annual completion of the next five years (2019-2023) will be about 18,800 units, although it will be less 2,000 units or 9.6% than the same of last year in 20,800 units, but it will be higher by about 20% than the average annual completion over the past five years.

It is affected by the proportion of public to private housing.

However, due to changes of the proportion of public to private housing, the land available for sales next year will be significantly reduced. ‘There will be 15 residential land sites in the next fiscal year with 7 among are newly increased, and it is predicted 8,800 units can be built, which is the latest lowest in recent nine years since the government resumed active on land sales.’ Chen Maobo announced yesterday. It is largely reduced by about 42% compared to 27 land sites supplying 15,200 units in this fiscal year.

It is estimated that the potential private land supply for the next year will be about 15,500 units plus with the railway projects, projects redeveloped by URA and private and reconstruction projects, which will be largely down by 10,000 units or 39% than the 25,500 units in this fiscal year. Although the supply has decreased, but Chen Maobo pointed there is no sign that private property price will be in sharply rise due to this reason, and he also believed the actual supply will maintain high in short and medium-term even if the proportion of public and private housing had changed. Government sources said the potential supply of 15,500 units is still up to standard according to the latest proportion of public and private housing.

Property prices are still high beyond the public income.

In the past six months, the property market has been lowered by nearly 10%. ‘Regarding whether the strict measures will be withdrawn, the transaction volume and prices of residential properties have softened in the second half of last year. However, the current property prices are still high beyond the afford ability of the public. Therefore, there is no intention to revoke any demand management measures at this stage to avoid sending out an error message that may let public misunderstand that the government wants to intervene in the market.’ Chen Maobo said. ‘The global economic growth has slowed down, and the political and economic situation is full of changes, which may affect investment sentiment and make the global financial market more volatile.’ He also reminded Before buying property, people must carefully measure risks and do what they can.

The budget mentions the supply of potential private land for the next year is 15,500 units, which although is much lower than the potential supply of the previous year (about 25,500) but it is believed that the amount of potential housing construction in the next year should be able to cope with this year's demand due to the abundant supply in the previous year, the director of corporate development of PuJin Holding (valuation and property management), Zhang Shengdian believed.

The industry appeal it is necessary to speed up land reclamation.

In addition, he believed the reduction in the land supply next year will also reflect the more important role of the MTR and the URA in housing supply in recent years, also indirectly affirms the need for the Government to expedite the land reclamation project, including the rezoning of the New Territories, speeding up on many projects in new development zones and the "Tomorrow Lantau Island" plan.

‘The Government initially estimated that the average annual completion of private houses in the next five years will be only about 18,800 units, showing that the relevant completion has hit the top and begin to fall. In the current social environment, the demand for home buyers is still strong. So it is estimated the supply is easily digested by the market.’ the chief executive officer of 21st Century Hong Kong, Wu Qimin expressed. There is no more or less strict measures in the budget, which has a positive impact on the market and strengthens the confidence of the first housing people or house changing customers, so it is expected that the property market will be continue to rise steadily in the first half of the year, unless the global economy has serious negative news.
Translated by 28Hse.com . All right reserved.