Hong Kong may miss private home supply target again as recession slows land sale, development plans

The government and MTR Corp will put up three residential sites for tender next quarter, including one on The Peak that failed to sell in 2018

City may achieve only 57 per cent of its annual home supply target after nine months, according to projection

Reading Time:3 minutes

Secretary for Development Michael Wong Wai-lun speaks to the press on a land sale programme in June 2020. Photo: Xiaomei Chen

Published: 9:29pm, 28 Sep 2020Updated: 11:50pm, 28 Sep 2020

Hong Kong’s government may miss its annual private home supply target yet again to help ease the housing shortage because the amount of land available for development is insufficient, analysts said.

The government and MTR Corporation will put three residential sites up for sale in the quarter ending December 31, Michael Wong, Secretary for Development, said on Monday. Those sites, together with expected contribution from private developers, could add 2,780 units to the market, he added.

They will bring the projected units in the nine-month period to 7,400 units. The government had set an annual target of adding 12,900 new private homes to the city’s residents for the year to March 31 next year. It has also failed to achieve its annual targets in the previous two years.

The government plans to sell a site at the former Kai Tak airport and another on The Peak, capable of offering a combined 630 units of homes. The Mansfield Road site on The Peak was previously withdrawn from the market in October 2018 when it failed to meet the government’s price target.

“It depends on how much land private developers can develop, and their intention to settle the land premium,” Wong said, offering some explanation for the potential shortfall. Some developers are discussing with the government about paying the premium over several big projects, he added.

The deficit underscores the challenges facing Chief Executive Carrie Lam Cheng Yuet-ngor in overcoming the acute housing shortage ahead of her annual policy address for October 14. Hong Kong is the world’s most expensive housing market, where prices have not cheapened far enough to reflect the city’s worst recession on record.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x