Carrie Lam in welcome stand on high land prices
It may be too early to say the chief executive’s housing measures are a success, but developers appear to be releasing new flats at a faster pace
It’s too early to say whether the government’s latest housing measures are a success, but there are signs they are having an effect in pressuring developers to release new flats at a faster pace.
Last week, Chief Executive Carrie Lam Cheng Yuet-ngor announced a vacancy tax on new flats that remain unsold for six months, as well as offering a bigger discount on subsidised flats under the Home Ownership Scheme (HOS) at about 50 per cent of market rates rather than the current 30 per cent.
Letting more individuals and families to own homes is surely a good thing. And a handful of developers have since been busy offloading unsold properties.
Sun Hung Kai Properties is releasing hundreds of new flats in Tai Po and North Point. CK Asset Holdings is planning to sell the last of its unsold stocks in Ma On Shan. Far East Consortium is promoting the sale of unfinished flats in Tai Wai.
These all belong in the mass market. Wing Tai Properties, Sun Hung Kai and Emperor International are also unloading villas and independent houses at the very high end of the luxury market.
All those sales may be a coincidence. More likely, though, developers don’t want to be left holding the bag, or being penalised, in a new housing environment.
The vacancy tax is equivalent to two years of rental income based on market rates. The fact that the new vacancy tax has rattled the Real Estate Developers Association does say something about its “spiciness”. The new, more heavily subsidised HOS flats may also put pressure on prices in the mass market segment.
The latest moves have led some seasoned observers to argue the government may finally be willing to end its unofficial but long-standing policy of high land prices.
It may be too early to draw such a conclusion. The “policy” really is money for nothing for the government and is hard to give up. Still, land sales as a percentage of annual government revenue have been dropping since the 1990s, as they now account for only about 20 per cent.
The government can afford to live with more affordable land prices, for the sake of most Hong Kong people.