Hong Kong land sale

Hong Kong to top fiscal 2016 housing supply by 8 per cent

PUBLISHED : Thursday, 29 December, 2016, 5:49pm
UPDATED : Thursday, 13 July, 2017, 8:25am

The Hong Kong government is expected to have released enough private housing land to build 19,460 new flats before the end of the fiscal year ending March 31 – the highest level since the city resumed land sales in 2010.

Secretary for Development Paul Chan mo-po said with land expected to be put up for sale in the

fourth quarter of the current year, the annual total would exceed its private housing target of 18,000 units by 8 per cent in the 2016-17 year.

Two government residential sites, two railway property projects and one project under the Urban Renewal Authority (URA) will be put out to tender in the next three months, adding the equivalent of another 3,610 new units during the current fiscal year, he revealed on Thursday.

The latest release of potential flat supply for January to March, however, will still be 22 per cent lower than the previous quarter’s 4,600 unit equivalent.

“Although the supply of private housing land from government sale in the next quarter is less than previous quarters, this should not be misinterpreted as a lack of residential sites available for sale or the government reducing its land supply,” he said on Thursday. “Rather, it reflects the government’s intention to maintain its steady supply target.

“Exceeding the target by too much may affect government credibility, and the certainty of meeting its annual supply target.”

To ensure land supply remains stable, he added, various private housing plots will be announced in February, providing enough capacity for over 5,000 flats.

In the first three months of 2017, the government is set to offer two residential sites at Whitehead, Ma On Shan and Kai Tak for tender, offering the potential of 1,040 flats.

Chan said another 2,450 flats will be offered by tender at two separate property projects by MTR Corp.

The rail operator is planning to tender the 1,650-unit first phase of the developments at West Rail Kam Sheung Road Station, and an 800-unit at Wong Chuk Hang Station.

The URA, meanwhile, plans to tender projects at Peel Street and Graham Street in Central, which will provide 116 flats. And besides the residential sites, the government will offer three commercial sites and one industrial site for tender in the next quarter.

The most eye-catching site on offer is a commercial site on Murray Road in Central, the first Grade-A office site in the business district to come up for offer in two decades.

Currently occupied by a car park, the plot is valued at between HK$15 billion and as much as HK$17 billion, making it the most-valuable commercial site in the government’s land sale programme this fiscal year.

Defending recent government sites sold for shockingly high prices, Chan said Hong Kong is a free market.
“There is no guarantee developers winning government sites are bound to make a profit. Home buyers shouldn’t let individual land sale results affect their buying decisions,” he said.

Commenting on the market trend of developing mirco-flats, Chan said the government’s private housing targets are based on units starting at 50 square metre, or about 538 square feet each.

“The resale value of tiny flats will be limited as buyers are difficult to find,” he said.

In the past two years, the government has achieved its housing targets. According to plans submitted by developers to the Building Department , there were 3,000 units more than government forecasts for new flat supply starting from 2011, said Chan.

Thomas Lam, senior director at Knight Frank, said he is confident the government will again achieve its private housing target over the next two years.

“This year, the potential supply of new flats will be at its highest since 2010. But what concerns us is whether the government can achieve its housing target in the medium to long term, in view of the difficulties involved in preparing plots for sale in the Northwestern New Territories,” he said.

Lam said exceeding the private housing target for a single year would have limited impact on home prices, and urged the government to speed up supply of affordable housing, in a bid to increase home ownership.

The latest higher-than-expected new land supply details, however, did nothing immediately to deter cash-rich investors.

Separately, Wheelock Properties announced on Thursday it had sold a 9,950-square-foot house – No.1 Mount Nicholson on The Peak – for HK$1.08 billion or HK$108,543 per square foot through tender.