Park development backed as option to ease Hong Kong's housing shortfall

PUBLISHED : Friday, 27 September, 2013, 12:00am
UPDATED : Friday, 27 September, 2013, 5:01am

Property analysts say releasing land in Hong Kong's country parks should be considered as one of the options to help solve the city's housing shortage.

Chief Executive Leung Chun-ying's government has been looking at a range of possible options, including reclamation outside Victoria Harbour and a change of land use for existing industrial, government and agricultural land.

But development chief Paul Chan Mo-po said earlier this month that the country parks, long protected from development, could also be considered.

"Every proposal has its advantages and disadvantages. Opening up country parks could be an option," said Charles Chan, managing director of property consultancy Savills Asia Pacific.

The option of reclamation, for example, would be environmentally destructive and involve substantial costs, and buying land from private owners in the New Territories to be auctioned off to developers would also be trouble, Chan said.

"Taking the current political situation and the fact that farmers disagree with the idea into account, the government could face a lot of difficulties in proceeding," he said.

"I am not saying we must open up the [country park] land for housing development. But it should be a topic to be discussed."

Chan's comments have infuriated environmentalists, who claim that developers will be the big beneficiaries of any change. They fear that park land in areas such as Pok Fu Lam and Sai Kung would be ripe for luxury development.

Leading developers such as Henderson Land Development chairman Lee Shau-kee and Hang Lung Properties chairman Ronnie Chan Chi-chung have come out in favour of rezoning in country parks.

New World Development chairman Henry Cheng Kar-shun yesterday became the latest tycoon to back this.

"There are not too many visitors in some of the parks," Cheng said at the company's annual results announcement yesterday. "We should study if those parks can be developed [for housing]."

He said the company owned land in country parks, but gave no details.

Henderson's Lee said earlier this month that opening up 1per cent of Hong Kong's country park land could be acceptable.

"The government has offered a number of options," said Nicole Wong, head of property research for investment group CLSA. "If not rezoning country parks, can we reclaim land? Or can we convert industrial buildings?

"The reality is that whatever option we accept, we need more sites for housing development to stabilise home prices," said Wong, who led a team that wrote an open letter to the government on housing last year.

Analysts are now waiting for more details from the government about how it plans to increase housing supply and, if it plans to release land in country parks, how much will be released and what conditions will be imposed on developments.

Over the past decade, demand for new homes has averaged around 20,000 units a year, versus supply of 10,000 units - an imbalance that has led to soaring house prices.

Whatever plan was finally adopted by the government, if it can ensure a steady supply of 20,000 new homes a year, price rises could be limited, Wong said.

Additional reporting by Yvonne Liu