Hong Kong property to take centre stage again in 2015
Property set to replace political movements as key topic for government
While political movements dominated 2014, the major feature in the city this year will be something more familiar - property.
With home prices soaring last year, especially for small units, analysts have urged the government to unveil a more comprehensive land-supply programme to stabilise the market.
Chief Executive Leung Chun-ying is due to deliver his policy address on Wednesday.
Alfred Lau, head of property research at Bocom International, said the chief executive had made an effort to increase land supply over the past few years.
"But the government should update the progress of future housing supply in a timely manner in order to enhance the visibility of the pipeline rather than just quoting the long-term target. This would also help reduce rush purchases from those who may not have immediate housing demand," he said.
Hong Kong home prices rose for the seventh straight month in November, albeit at a slower pace, according to the Rating and Valuation Department.
Overall prices last year rose more than 11 per cent in the first 11 months of 2014, in spite of the chief executive's pledge to solve housing problems in his previous policy speeches.
Small and medium-sized flats continued to lead the growth, with prices for larger flats stabilising or even showing a modest decline.
Lau Chun-kong, head of valuation and advisory services at property consultant JLL, said the ultimate solution to resolve the problem of steep home prices was supplying more land.
"Now the Occupy movement has ended, the top issue in Hong Kong this year will be the land issue," Lau said.
He said the chief executive and his cabinet were expected to make a big effort to push ahead the development of new towns in the northeastern part of the New Territories.
"The development in the northeastern New Territories is the first move by the government to develop the New Territories. If it does not proceed, the government cannot move to the next development stage, such as the development of Hung Shui Kiu or other projects," said Lau.
He believes the government will make more compromises with opponents in the hope of pushing ahead the project to get planning approval this year.
According to government plans, the development of the northeastern New Territories includes Kwu Tung North, Fanling North and the Ping Che/Ta Kwu Ling Development Areas. The completed towns will have a total population of about 460,000, comparable to other new towns such as Tuen Mun and Tseung Kwan O.
"In reality, the city does not have enough land to meet the government's 10-year home production target if the New Territories is not further developed," Lau said.
The government's ambition now is to build 480,000 new homes by 2025. That marks a step up from the plan for 470,000 new flats from 2014/15 to 2023/24 announced in the chief executive's policy address 12 months ago.
In the wake of rising home prices, analysts believe the government will not impose any austerity measures to manage home demand. More property analysts believe prices will ease this year on increased supply, anticipated interest-rate rises and weaker inflation pressures as the US currency gets stronger.
A Bocom International report estimated 15,000 private homes would be available from this year, compared with about 10,000 on average in the past five years.
