Hong Kong property

No room at the inn? Housing target may be a pipedream for Hong Kong as more land sites face potential judicial review

Land supply target may be a challenge as more government sites face potential judicial review

PUBLISHED : Tuesday, 06 October, 2015, 8:16pm
UPDATED : Tuesday, 06 October, 2015, 9:53pm

The Hong Kong government may have difficulty meeting its long-term housing target as a growing number of residential sites up for public tender face potential judicial reviews that could stall land sales.

In its latest announcement of land sales scheduled for the three months to December, three of the four sites are subject to potential judicial review.

All three are in Tai Po and would have the capacity to provide 2,500 flats, or 88 per cent of the 2,825 flats that could be built on the released land for the October to December period. Aside from government land sales, the MTR Corp and Urban Renewal Authority will also release land sufficient to build 1,985 flats in the same period.

"That the government is still proceeding with the land sale plan indicates it has little choice while it is struggling to meet its annual housing target," said Victor Lai Kin-fai, the chief executive of Centaline Professionals.

Enough land supply to build 19,000 flats per year is part of Chief Executive Leung Chun-ying's blueprint for future development.

Faced with mounting opposition from affected local communities and environmental groups, Lai expects it to be increasingly difficult for the government to identify residential land.

The proposed tendering for the three sites in Tai Po was challenged by environmental groups that warned of potential air and noise pollution in the surrounding area.

The three sites raise the number of plots being challenged for judicial review to five for the financial year ending March 31, 2016.

"It is the largest number of sites being filed for judicial review that I have ever seen. The land issue is getting highly politicised," said Charles Chan, Savills' managing director for valuation and professional services. He supports the government's plan to go ahead with the land sales.

"If the government held back those sites from sale once someone filed for judicial review, it would encourage more applications to block land sales," he said. By proceeding with the sales the government believes there is less chance of them being taken to court, said Chan.

Chan's remarks came after two mega residential sites in Yuen Long West Rail Station and Tai Wo Ping in Kowloon Tong sold successfully despite being under risk of judicial review.

In August, Sun Hung Kai Properties won the Yuen Long site, which could yield a total gross floor area of 1.48 million sq ft, for HK$9.32 billion, while Shimoa Property Holdings paid HK$7.02 billion for a luxury residential site in Tai Wo Ping, Kowloon Tong on September 30.

Secretary for Development Paul Chan Mo-po played down the impact of the legal disputes, saying the review applications had not yet been granted by the High Court.

"We remain cautiously optimistic about meeting the annual target this financial year," he said on September 30 when announcing land sales for October to December. Centaline estimated the four residential sites could fetch more than HK$9.1 billion.

A spokesman for Green Sense said the group has assisted a student to file judicial review for the two sites in Lo Fai Road in May.