Demand will ensure private flats are built, says Paul Chan

Recent hiccups in securing land and developers will not derail plans, development minister says

PUBLISHED : Saturday, 15 March, 2014, 4:11am
UPDATED : Saturday, 15 March, 2014, 4:58am

The development chief has sought to allay worries that the government's ambitious private housing target may fall apart, after more rezoning plans ran into opposition and a tender for a Tai Po site came to nothing.

The latest setback occurred on Thursday, when the Kwai Tsing district council shot down a government proposal to rezone three public sites in order to build 1,320 private flats.

The council's objection makes it harder for the administration to secure rezoning approval from the Town Planning Board, in the wake of an official pledge to provide enough land for 18,800 private flats this year.

Secretary for Development Paul Chan Mo-po said yesterday: "We don't need to worry [that the plans will not be realised] because the city's housing demand is quite large and inelastic.

"The government will continue to act accordingly to meet the target, which will not be affected by short-term [market] fluctuations."

On Wednesday, the Lands Department rejected all seven bids submitted for a prime site at Tai Po's Pak Shek Kok, next to the Science Park. The outcome came after the MTR Corporation turned down all three bids in January for a private housing development at Tin Wing Light Rail Station in Tin Shui Wai.

The failure to appoint eligible developers in both recent tenders presents a stumbling block to achieving the housing target.

Added to that was opposition to rezoning that had emerged in the Sham Shui Po and Tai Po district councils over the past few months. The concerns involved possible adverse impact on traffic and community facilities.

In the case of the Tai Po site, the government says all the bids failed to meet the department's reserve price. But developers complain the department has asked for too high a land premium - a fee payable to convert sites to new or more lucrative uses.

"We don't have a policy of high land prices," Chan said. "[But] we have to protect public interest. Land is a public asset and cannot be sold at an unreasonably low price."

But he admitted that the department set land premiums based on the prevailing property market rates during the tender.

Analysts have said they are expecting the market to go down.

Chan urged the public not to worry, as the tenders for four other sites were ongoing, with six more sites set to invite bids in two to three weeks. He stood firm on the rezoning, saying he would consider only sound arguments. "It's unacceptable if district councils object only because new flats would block their views."