Government target of 20,000 homes in doubt due to limited land sales

Government wants 20,000 new flats per year, but land on offer in next quarter is limited

PUBLISHED : Saturday, 01 September, 2012, 12:00am
UPDATED : Saturday, 01 September, 2012, 3:19am

Parcels of land offered for sale between April and December will only accommodate about 9,000 new homes, indicating that the government may fall short of its annual target despite fresh measures unveiled on Thursday to boost housing supply and cool the overheated property market.

The government announces land sales each quarter and yesterday, Secretary for Development Paul Chan Mo-po said seven residential sites, including one above Tsuen Wan West station, would be put on sale between October and December.

Chan said the sites might be sold with a condition that the completed flats would be offered only to Hong Kong people, provided that the government can solve any legal issues regarding such a restriction.

With a total estimated value of about HK$11.92 billion, the seven sites - one in Jordan and the rest in the New Territories at Tseung Kwan O and Sha Tin - will yield 2,650 flats. That is 47 per cent fewer than the 5,000 that can be built on land sites being offered in this quarter.

The government's annual target, set by the previous administration in 2010, is 20,000 flats. With just 9,000 new homes announced in the first nine months of the current fiscal year ending March, surveyors doubt the target can be met.

But Chan said: "We're  still optimistic about achieving the target ... If needed, we will launch more [sites for sale]."

For instance, he said sites at  Long Ping station (south) and Tai Wai station  might also be tendered this financial year and would provide 3,620 flats.
Yesterday's land sales announcement came a day after the government outlined 10 short- and medium-term measures to boost housing supply amid soaring flat prices.

However, the market quickly shrugged off the latest measures.

"The secondary flat market remains stable," said Vincent Chan Kwan-hing, executive director and chief executive of the residential department at estate agency Midland Holdings. "We haven't seen flat owners cutting prices significantly although some have softened their asking prices." He said potential buyers were waiting to see what developers would ask for new projects.

Midland recorded 1,911 flat viewing appointments scheduled for this weekend at Hong Kong's 15 largest housing estates. That is just 1.4 per cent fewer than last weekend, after seven consecutive weeks of increase.

Developers also appear to be unaffected by the fresh measures to boost housing. The Hang Seng Properties Index, which tracks developers' share prices, rose 1.05 per cent or 271.83 points to close at 26,253.57 points yesterday. And Kowloon Development Company yesterday said it plans to raise prices at its Gardenia project by between 4 per cent and 6 per cent to nearly HK$10,000 per square foot from Monday.