The city's housing crisis could be eased by the addition of at least another 5,000 flats at Kai Tak, according to an estimate by the South China Morning Post.
It is understood that a government review due to be completed by the middle of this year will recommend an increase in the development density of the site.
The extra flats would be equivalent to five times the amount of housing provided by the usual-sized building plots made available in government auctions, said Dr Lawrence Poon Wing-cheung, a real estate analyst at City University.
He added: "It is not a small amount given that creating new land through reclamation is difficult nowadays."
The Civil Engineering and Development Department applied to the Town Planning Board in November to increase the density of three of the 21 residential sites in the 320-hectare Kai Tak site by about 22 per cent. About 890 flats were added as a result.
It is understood that a second review covering the remaining sites will recommend a similar increase in housing density.
With an average flat size of 60 square metres, that would mean the whole district could supply an extra 5,400 flats on top of the original target of about 12,000 flats.
To come up with the figure, the Post took the size of each site and raised the original plot ratio - the gross floor area divided by the site area - on the four types of residential plots by one unit.
This would translate into an increase in density on most sites from 20 to 22 per cent.
The news comes as Chief Executive Leung Chun-ying is expected to reveal plans to tackle the shortage of land suitable for housing development in his policy address on January 15.
A source close to the government said raising the development density of existing sites would be a key element.
The source added that plans to build public housing on a 110-hectare site currently occupied by farms and villages at Kam Tin South - stretching from the MTR Corp's Pat Heung Depot to Kam Sheung Road Station - would be unveiled for consultation soon.
Large green belt sites are also expected to be rezoned for housing, the source said.
A Development Bureau spokeswoman said the land use study on Kam Tin South would suggest building 8,700 units at the station and railway depot, with the proportion of public and private housing on the adjoining land not yet finalised.
But a source close to the study said the proportion of public rental units and subsidised flats could be more than 60 per cent.
Poon said: "Public units should reach 70 per cent in Kam Tin if sufficient community facilities are provided. It is a vast piece of land, allowing the government to offer more affordable flats."
Poon did not expect the policy address to contain any new ideas on how to increase land supply.
But Chau Kwong-wing, real estate professor at the University of Hong Kong, hoped the chief executive would come up with effective policies to build up the land reserve.
"Some progress should be made regarding reclamation. It is a comparatively easy way to create large pieces of land," he said.