Fewer home sites available for developers
The Hong Kong government plans to make fewer residential sites available to developers this year than last, leading to fewer flats being built, a move likely to help underpin prices in the short term.
Property prices soared more than 50 per cent, on average, in the past two years before retreating 5 per cent in the past two months. Some real estate watchers predict the market could fall as much as 30 per cent this year, driven by the impact of a deteriorating European economy on the local economy.
Yesterday, the government announced 47 residential sites would be available for sale in 2012-13, which could provide a total of 13,500 flats.
That compares with 52 sites last year, which could potentially provide 16,000 flats. Most of the sites are in relatively remote areas in the New Territories, with only a handful in Kowloon and Hong Kong Island. With the 47 new sites and private redevelopments by MTR Corp and the Urban Renewal Authority, there is a potential for 29,800 flats in the coming financial year. Last year the government planned to release sites that would be enough to build 35,000.
Twenty-four of the 47 sites are new; the rest were offered previously but not sold. The latest list includes two sites from the Kai Tak Development, home of the old airport, the first time private housing sites in the area have been released for sale.
The government also has split larger sites into small parcels to give smaller developers a chance to bid. Because the government has such a small land bank, it has even resorted to putting two sites in Sha Tau Kok, near the mainland border, on the list. Of the 47 sites, only 10 are in Kowloon and Hong Kong Island. Also, there are fewer luxury sites available for sale than in previous years.
'The land sale last year was overwhelming, which affected the number of sites available for sale this year. It was not easy to find the 24 new sites for the list,' Secretary for Development Carrie Lam Cheng Yuet-ngor said, suggesting there will be fewer and fewer sites available for sale in the next few years.
New land supply in next few years would rely on the Kai Tak Development and Tsueng Kwan O, Lam said, adding the government would speed up residential development along the railway.
'Most of the government staff quarters have been sold and the urban area has been well developed. That's why there are fewer sites available for sale this year,' said Alnwick Chan Chi-hing, head of valuation and professional services at surveyors Knight Frank. 'And I'm wondering if the land supply in the next financial year can provide 30,000 flats as some of railway projects in Tin Shui Wai are not attractive enough for developers.'
Some analysts argue the government could make more land available and should do so to ensure a steady land supply that would stabilise prices in Hong Kong's volatile property market in the longer term.