Target raised to build extra 10,000 flats
The government has raised its target for new housing by about 18 per cent, calling yesterday for 65,000 flats to come on the market in the next three or four years.
Development Minister Carrie Lam Cheng Yuet-ngor said the new target - 10,000 more flats than the government called for two years ago - should satisfy demand for housing. The government's long-term policy was to maintain a stable supply of land for housing, she said.
Lam would not say whether the plan had the approval of Leung Chun-ying, whose administration takes power on July 1.
'That means, in the next three to four years, the supply of new flats can reach between 16,300 and 21,300 units a year,' Lam said. The current average ranges between 14,400 and 17,500 flats a year.
About 5,000 of the new flats will come from eight sites that will go on sale between July and September this year, Lam said, in what she called the government's 'conscious effort' to increase the land supply.
'We hope [Hongkongers] who have plans to buy flats will take note of the figures,' Lam said, hinting that prospective buyers might want to bide their time. 'A sustainable and stable supply of housing land is a common goal of the community.'
The land sale plan was welcomed by some analysts, who were satisfied the government was sending a clear message that it wanted to ensure a stable land supply. In an interview with The Wall Street Journal published yesterday, chief executive-elect Leung said he would not bring property prices down by 'flushing the market with new land supply'.
Leung's office said yesterday it had no comment on Lam's announcement.
Alvin Lam, a director at Midland Surveyors, welcomed the government's move and said the message was clear that the government aimed to stabilise the market.
'I am in general optimistic, and I do not think the incoming administration will make drastic changes [to the housing policy],' he said.
In the first quarter of the year, property prices overall were about 10 per cent above their previous peak in 1997, the government said this month, sparking concern that a bubble was forming.
The government sites on offer between July and September are relatively small. The smallest, at Tung Wan, Peng Chau, is about 1,780 square metres. Four of the sites are for low-density developments.
Two sites, atop West Rail stations, are larger: one at Tsuen Wan West Station will supply almost 2,400 flats. But there may be problems with the Tsuen Wan site, said Vincent Cheung Kiu-cho, national director for Greater China at Cushman & Wakefield.
'That site was withdrawn from tender early this year because the offers were too low,' he said. 'There is a risk that the site may be withdrawn from tender again, so those 2,384 flats are still uncertain.'
Of the sites released for sale, surveyors believe the one in Kau To, Sha Tin, is the most valuable. Cheung expects the site to fetch HK$3.5 billion, or about HK$11,000 per square foot.
Rise in home prices in the secondary market in the first four months of the year, according to Midland Realty