Opinion | Supply is the key to ending Hong Kong's housing problems, not policy change

Is Chief Executive Leung Chun-ying successfully convincing the public that his administration can provide enough affordable housing?

Over the past two weeks, the government has announced a series of policies including a revised plan for the development of the Northeast New Territories, a lengthening of the pre-sale period for private homes and an increase in the number of sites in its land sales programme.

Homebuyers may now be hoping that prices will fall in the short term as these measures are applied - but it may be too early for them to celebrate just yet.

The Northeast New Territories development is the subject of a continuing political fight and will face resistance even if it proceeds, as farmers and pro-democracy parties oppose it.

On the surface, the June 27 announcement on the extension of the pre-sale period for private residential developments from 20 months to 30 months may put 15,000 flats on the market. But will it help push prices lower? Unlikely.

The concern of some legislators that the extension would allow developers to sell their flats before prices fall is exaggerated. With more projects available for sale, developers will have flexibility to change their marketing plans - if demand for mass housing declines, they will sell more upmarket homes, or vice versa.

In other words, Hong Kong-listed developers will have more control over pricing and feel less compelled to cut prices to generate sales. Some believe the lengthening of the pre-sale period is designed to create more residential units.