Hong Kong government, MTR to release five housing sites for sale

The government and MTR Corporation will release five housing sites worth HK$5.5 billion for sale between now and September 30.

Secretary for Development Paul Chan Mo-po said yesterday that the government would release four residential sites, in Lei Yue Mun, Tuen Mun, Fanling and Tai Po, and a 1,100-room hotel site in Tung Chung, between July and September. The four sites could provide 2,100 flats.

The MTR will release a site at Tai Wai station for tender for a second time during the same period. When the project was first released in 2012, the winning bidder would have had to invest HK$29 billion to acquire the site and build flats on it.

The number of flats the five sites will provide is 56 per cent more than will be built on land sold in the first quarter.

The Tai Wai MTR station site and a site at Pak Shek Kok, Tai Po, were previously withdrawn from tender because the offers submitted by developers failed to meet the reserve price.

With many sites in the land sale programme yet to be rezoned for residential use, the government is facing a challenge to meet its target of providing enough land for 18,800 private flats in the current financial year.

"It will largely depend on whether the MTR is able to sell their projects or not because railway projects usually offer more flats," said Vincent Cheung Kiu-cho, national director for Greater China at property consultant Cushman & Wakefield.

"There will be some difficulties. The MTR didn't divide the Tai Wai station site into small plots. They also have requirements on land premium and profit-sharing. The result of the tender will largely depend on the requirements."

Paul Chan said the government would try its best to meet the target. "There will be more sites released for tender in the second half of the financial year because we need to rezone the sites and lobby district council members. The biggest challenge is to gain their support for the rezoning," he said.

In March, he accused the MTR of not doing enough to help solve the city's housing shortage. The government has urged the MTR to release a new project at Lohas Park in Tseung Kwan O in the latter half of the year.

"We will continue to urge them to release sites for tender. They are one of the major sources of land supply," Chan said. "If we could find land available for residential development in urban areas, we would release it for sale immediately. But it is difficult to find a large quantity of residential sites in an urban area.

"Since construction of the [MTR's] Sha Tin to Central link has been delayed, we are unable to release new sites at Kai Tak. Therefore, future land supply will mainly come from the New Territories."

Property sales and prices have rebounded since March.

"We don't need to worry at this stage. We won't change our land supply policy because of the market movement in the past two months. The previous sharp increase in property prices is because of the housing shortage. We will continue to increase the land supply," Chan said.