PROCEEDS from land sales constitute the major source of income for the Hong Kong Government, yet each year the director of the Buildings and Lands Department says in the Budget speech that it is difficult to estimate revenue from land sales in an active market.
In the past 10 years property prices have surged 700 per cent. The compound growth of prices for office premises was 21.6 per cent and for residential premises 21.3 per cent a year, according to Jones Lang Wootton.
The Government's estimate of how much land it would sell each year exceeded actual sales during the past 10 years, but revenue income was above official forecasts.
Property experts suggested this was because of the withdrawal of land at public auctions when there were no bidders or the bidding price was unsatisfactory.
In addition, there was little real interest in the land exchange programme offered by the Government and so sales fell short of the Government's original target, according to Michael Choi, managing director of Land Power International.
In the past 10 years, the Government sold more than 300 hectares of land through public auctions, tenders and exchanges, yielding revenue of more than $115 billion.