The government's latest pledge to increase land supply did little to dampen the residential property market. Sellers are regaining confidence and raising asking prices again, while more buyers are returning to the market. Buying sentiment remains robust, especially in the luxury sector due to a scarcity of developments.
No drastic policy measures were introduced by Financial Secretary John Tsang Chun-wah in his annual budget speech, other than the promise to sell more residential land this year and beyond. This moderate approach has relieved some concerns about further government intervention in the short term to combat property prices, although some analysts say it is still premature to judge the real impact from a faster pace of land sales. Wong Leung-sing, associate research director at Centaline Property Agency, says the budget has announced nothing new except for the government's established policy of increasing land supply to help the market's stable development.
'It is great to see that the government has not brought in any heavy policy measures to interfere with the market's operation. This is good news for the market. The budget speech is going to have a positive effect on the property sector,' he says.
For the fiscal year starting April 1, 18 new residential sites located at Ho Man Tin, Tuen Mun, Tseung Kwan O, Ap Lei Chau, North Point and Sha Tin are being injected into this year's programme. In effect, together with 34 sites rolled over from last year's application list, there will be 52 plots of land for sale.
All these sites will provide about 16,000 flats, including about 3,000 small and medium-sized flats to be sold by tender, an increase of 70 per cent from the estimated 9,000 flats made available in the previous fiscal year. Together with projects above several MTR stations and some redevelopment sites, housing land will provide 30,000 to 40,000 private flats, far exceeding the annual average target of 20,000 flats, according to the government.
It is, however, uncertain how many of the sites will go on sale eventually. Under the application list system, sites are triggered for sale when a developer promises to pay a floor price considered 'fair and acceptable' by the government.
In a show of determination to put its words into action, the government will initiate auctions or tenders for four sites, rather than wait for a developer to trigger a sale. It will also put up for sale by tender five sites in addition to those on the list. As a kick-start, two Hung Hom sites - 5-23 Lee Kung Street and the site at the junction of Bulkeley Street and Gillies Avenue South - will be scheduled for tender in April, making them the first to be put into the market to provide small and medium-sized flats in urban Kowloon. The government also plans to auction another Hung Hom site, the ex-Customs and Excise Service married quarters at Ko Shan Road, in April.