A high-level committee's plan to leave investors out of its housing demand projections has sparked fears that the city's construction target will be underestimated.
In a paper submitted to the Legislative Council yesterday, the Transport and Housing Bureau said the Long Term Housing Strategy Steering Committee - tasked to map out the city's housing demand in the next decade - believed investments should be disregarded in its projections.
"Investment demand may affect the demand-supply balance … to the extent that some flats may be left vacant and therefore not available to help meet the physical demand [while] some flats purchased by investors would eventually be channelled back into the sales or rental market," said the bureau.
"[Hence] inclusion of investment demand would inflate the housing demand," it said, adding that it was hard to precisely measure investment demand.
The bureau, which is expected to make recommendations for a consultation by June, said the committee would work out how many new flats should be built by considering the needs of three groups: new families, households displaced by redevelopment, and those who live in poor conditions such as in cage homes.
But an economist on the committee, Dr Andy Kwan Cheuk-chiu, said he had "reservations" about excluding investors.
"It's certainly possible that the ultimate projection is an underestimate," he said.
"Officials in the committee seem unwilling to look into investments, but in fact most housing literature studies it. There are economic models for studying market expectation and herd behaviour with reference to interest rates and affordability."
Former lawmaker Lee Wing-tat, who runs concern group Land Watch, shared Kwan's reservations, saying the committee should not dismiss the market impact of mainland investors.
These investors had snapped up about 20 per cent of the deals in the high-end market before the cooling measures were put into place, he said.
"Developers have changed their pricing and marketing strategy to lure mainland investors. Ignoring this is a big mistake," Lee warned.
Meanwhile, the Housing Authority's subsidised housing committee in its annual review yesterday endorsed the raised income and asset limits for public rental housing applicants.
The monthly income limit for four-member households will rise to HK$22,140 from HK$20,710. The new limit, which takes effect from next month, means that an additional 5,700 households would become eligible to apply for public rentals.