Focus on more land supply
Joyce Ng and Paggie Leung
In contrast to last year, John Tsang Chun-wah's swansong budget contained no big financial measures to cool the property market. It instead focused on increasing land supply to keep prices under control.
Most developers and property agents said they were generally satisfied with the budget. However, some observers doubted that controlling land supply alone would keep prices down.
The financial secretary said he would continue the four measures he announced last year to prevent speculation, including a curb on mortgage lending.
'Despite the recent stabilisation of the property market, the low-interest environment persists, and the developed countries may again resort to quantitative easing policies to boost their sluggish economies,' he said. 'I shall, therefore, continue the strategy that has proven to be effective.'
The government will include 47 sites for housing in the application list in the new financial year, half of which are rolled over from last year. Details will be announced by the Development Bureau today. Developers can trigger auctions for sites on the list if they bid at least the government's reserve price.
If all 47 sites were sold, they could, together with projects by the MTR Corporation, the Urban Renewal Authority and private redevelopments in urban areas, provide land on which to build 30,000 flats in the coming year.
Two large-scale private housing projects highlighted will be located atop the West Rail's Kam Sheung Road Station and Pat Heung depot, and will provide 8,700 flats.
Tsang said the two projects had enormous potential and would also give impetus to the development of Kam Tin South nearby.
Kam Tin South, according to Town Planning Board information, at present has more than 200 hectares of farmland - equal to the size of at least five West Kowloon Cultural Districts. Developers such as Henderson Land and Sun Hung Kai Properties have been acquiring land in Kam Tin for redevelopment.
'The absence of new property tightening policies is a reflection of the fact the existing measures are effective. No further curbs are needed and this can help stabilise the market,' said Louis Chan Wing-kit, executive director of Centaline Property Agency's residential section.
Both Chan and Stewart Leung Chi-kin, chairman of the Real Estate Developers Association's executive committee, said that, although the government would make more land available, this would not have an instant impact on flat supply.
That depended on whether or not developers tabled bids for the sites, and how long it took to build on them, both said.
Leung said: 'As long as the government sets a high reserve price for land auctions and marks up the flour [land] price, the bread [flat] price will remain high.'
The percentage fall in Hong Kong flat prices since the middle of last year, according to government officials