Hong Kong keeps third-quarter land supply steady as focus shifts to Carrie Lam’s October 6 plan to ease city’s housing shortage
- The city’s government will release two sites capable of accommodating 210 flats for sale in the fiscal third quarter starting on October 1
- The city’s total housing land supply could beat a government target by 30 per cent to top 17,000 units in the financial year ending in March 2022
Hong Kong’s government will keep its fiscal third-quarter land sale plan the same as three months earlier, as it focuses the spotlight on the final policy address by Chief Executive Carrie Lam Cheng Yuet-ngor on October 6, when she is due to deliver a widely expected blueprint to boost land supply and alleviate the city’s housing shortage.
The government, which typically releases land from its reserves for developers to build homes, plans to sell a residential plot in Tai Po, and a parcel on South Bay Road in Repulse Bay, enough to build about 210 flats during the three months starting in October, keeping the programme unchanged from the last quarter, according to the Secretary for Development Michael Wong.
“Looking ahead, the government will continue to increase land supply through a multipronged approach to meet the housing, economic and social development needs of our community,” Wong said during a briefing on Wednesday.
Lam’s final address will set out the policy priorities of her final year as the chief executive overseeing the world’s least affordable major urban centre, a dubious honour held for more than a decade according to various surveys.
Hong Kong’s housing supply is augmented by developers, who build private housing for buyers with the budget and preference. The city’s total land supply for housing could beat a government target by 30 per cent to top 17,000 units in the financial year ending in March 2022, Wong said. In this year’s first three fiscal quarters, total supply surpassed the target by 10 per cent to top 14,430 homes.
The Urban Renewal Authority (URA) and private developers are expected to provide a total of 7,110 flats in the three months from October. Some 750 flats in To Kwa Wan will be supplied by the URA and 6,150 by private developers.
“There are 12 private projects to be ready for this quarter, [which] indicates that the government has accelerated the process of lease modification to increase land supply,” said Martin Wong, head of research and consultancy in Greater China at Knight Frank. “But it is hard to rely on private developers to meet the shortfall as they probably release the projects according to market conditions. Builders are unlikely to release these units in one go,” he said.
He believes home prices would continue to grow as Hong Kong’s shortage of new private flats is a long-term problem.
“Private housing shortage will be more serious four years from now as the government runs out of land resources,” he said.
Hong Kong’s housing shortage, a chronic problem that has been blamed for a slew of problems from high business costs to the public grievances that drove hundreds of thousands of residents to march during anti-government protests in 2019. The problem has raised red flags among Chinese officials overseeing the city’s affairs, with some of them telling Hong Kong’s developers to use their resources and influence to champion state interests, according to a Reuters report.
Lived-in home prices in Hong Kong retreated for the first time this year in August from an all-time high, after a slump in the equity market weakened buying sentiment.
Prices declined 0.15 per cent to 397.1 in August, according to a Rating and Valuation Department index. It revised the July reading to 397.7 from 396.3. The previous record of 396.9 was set in May 2019.
