Leung Chun-ying's housing target at risk, new tack on development shows

An unusual decision by the government suggests it is at risk of missing its homebuilding target for the current financial year, observers say.

It has allowed property firms to dictate how much land tax they are prepared to pay for the rights to develop a major residential site in Tin Shui Wai.

Chief Executive Leung Chun-ying had pledged to supply 20,000 new flats a year as part of a plan to tackle soaring housing inflation that is pushing home ownership ever further out of the reach of ordinary Hongkongers and fuelling social discontent.

But land released by the government so far in the financial year that ends in March can only accommodate 13,700 flats.

"The government is running out of time," one of the 19 developers who submitted expressions of interest in the Tin Shui Wai site last week told the South China Morning Post. "With just three months left in this fiscal year, the government can ill afford to allow any railway project tender to develop land offered by the MTR Corp to be withdrawn again if the chief executive is keen to achieve the annual housing target." The developer declined to be identified.

The government's housing target includes the building of 6,000 flats on land linked to railway projects that is being offered by the MTR Corp, such as that in Tin Shui Wai, which will accommodate 1,500 new homes.