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Hong Kong housing

Hong Kong government unlikely to reach target of 280,000 new public housing flats over the next decade

Housing minister Anthony Cheung says the government has identified only enough land to build 236,000 flats – well short of its target of 280,000

PUBLISHED : Tuesday, 20 December, 2016, 6:04pm
UPDATED : Wednesday, 21 December, 2016, 11:10pm

The Hong Kong government is likely to fall short of its target of building 280,000 public housing flats over the next decade due to increasing difficulties in securing land, a thorny task expected to be thrust into the hands of the city’s next leader.

The revelation came as the government released its annual long-term housing strategy progress report on Tuesday, which showed it had identified only enough land to build 236,000 flats by 2027, down from the 255,000 it forecast last year.

The total housing supply target was maintained at 460,000 flats for the next decade: 280,000 for public housing and 180,000 for private housing, a ratio of 60:40.

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Secretary for Transport and Housing Professor Anthony Cheung Bing-leung admitted the shortfall of 44,000 public housing flats served as a warning that it was getting more difficult to find land.

“There’s a discrepancy with our aim,” he said, explaining that the planning process had become more lengthy and complicated due to community opposition.

“We have more difficulties in getting land sites suitable for developing public housing ... Society needs to face this reality and make a necessary choice otherwise the shortage of supply will continue to drag on.”

Cheung’s warning came as he accompanied Chief Executive Leung Chun-ying to Beijing on Tuesday night for Leung’s duty visit, during which the housing policy is expected to be discussed – an indication that the expectation is for the next government to pursue the agenda in the future.

Leung was elected on a promise to tackle soaring home prices and flat shortages but has faced opposition from villagers and rural landlords in pushing for housing in the New Territories.

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Cheung said he expected the next government to continue with the present strategy.

“Any good policies must have their own continuation because they have the support of society,” he said. “Our society sees it a very important policy to tackle the housing problem ... I can’t see there will be a policy change just because of a new government.”

The government had expected to produce 94,500 public housing flats over the five years to 2021 and the rest by 2027.

“I am calling on different sectors of society to support the government’s efforts in identifying land,” he said, adding the government would expedite housing supply through land use reviews, increasing development intensity, land reclamation and developing brownfield sites.

On private housing, Cheung said 93,000 flats would be built in the next three or four years – up from the forecast of 65,000 made in mid-2012.

The report said maintaining a stable and healthy development of the private residential market remained an important policy objective.

The government would continue to adopt a two-pronged approach – ensuring a stable land supply and using demand-side management measures – to suppress demand from speculators and investors.

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Lawmaker Eddie Chu Hoi-dick said the government should be transparent in disclosing details of the sites it was able to secure and the difficulties it faced.

“If the government can’t find sufficient land for public housing, it can always adjust its supply ratio of 60:40 for public and private flats. It can allocate more land slated for private housing to the supply of public housing,” he said.

Knight Frank senior director Thomas Lam expected the government could achieve its target for private housing from now to 2019.

“What concerns us is whether the government manages to meet its forecast in the mid to long-term housing supply, particularly beyond 2020,” he said.

“The government faces huge opposition from affected residents, adding uncertainties of providing a stable long term housing supply.”

Additional reporting by Sandy Li