Hong Kong government tightens residential land supply amid faltering property market

The Hong Kong government will only sell one plot of residential land in the final three months of the current financial year, tightening its land-release programme to balance the number of available homes and demand in the world’s most expensive residential property market.

Only one residential site in Tsuen Wan will be put up for tender in the January to March period, which will provide around 490 flats, Secretary for Development Bernadette Linn Hon-ho said on Friday.

The government will also offer a rare, large commercial site at the junction of Sai Yee Street and Argyle Street in Mong Kok, capable of providing around 141,600 square metres of gross floor area.

The government will not be constrained by the prevailing economic situation or be concerned about land sales unable to fetch high land premium, Linn said. “We want to achieve a certain policy objective, whether we can fetch a high land premium is not the determining factor.”

The land sales plan comes after home prices dropped by the most in 14 years in November and look likely to fall again in December in what would be the longest series of monthly declines since the 2003 severe acute respiratory syndrome epidemic. In the first 11 months of this year, the official home price index has fallen 13.8 per cent. From a peak of 398.1 in September last year, the index is down 14.75 per cent.

For the Mong Kok commercial parcel, the government said it would require the developer to provide social and infrastructure facilities such as a community home, a public transport interchange, cross-border coach bus stop and public car parking spaces.