Can reclamation resolve Hong Kong’s housing problem?
Hong Kong think tank says only a quarter of local households can afford a home, with real property price index up 266 per cent since 2004, against a 109 per cent growth in real wages
The new leadership of the Hong Kong government should consider restarting land reclamation to increase land supply to build new homes as a means to resolve the city’s housing problem in the long run, according to a government think tank and a property agent.
Stephen Wong, deputy executive director and head of public policy of a think tank, Our Hong Kong Foundation said Hong Kong’s medium and long term housing supply was lagging behind its target, and urged the government to restart a large-scale development to solve the housing problem.
Wong recommended the authorities to convert the use of land for container terminals in Kwai Chung to build residential properties.
“Do we need container terminals in the middle of the city?” he said.
Changing land use of the container terminals is part of the proposal tabled by the think tank in its recently released report to solve Hong Kong’s housing problems. The report proposed that the government restarts large-scale reclamation to create land for different development projects in the city.
“Only 24 per cent of total land (size of 110,000 hectares) in Hong Kong are developed land, with the rest being greenery, including country parks, farm land and land for other uses,” said Wong in a luncheon meeting on Thursday.
Excluding country parks that account for 40 per cent of Hong Kong’s total area, Wong called on the government to better use the city’s land area for building homes.
He also warned that only 25 per cent of Hong Kong households can afford to buy a home in the city where the real property price index has surged 266 per cent since 2004, against real wage and GDP growths of 109 per cent and 156 per cent respectively.
Property consultant JLL agrees that more land is necessary for housing and economic development.
The consultant noted that there are different views on how to increase land supply – from brownfield sites in the New Territories, periphery areas of country park land and land for container terminals.
Reclamation was one of the most effective ways to provide sufficient large-scale areas for comprehensive planning for different uses, it said.
It also proposed that the government relaxes its existing measures to boost activity in the primary and secondary markets.
The government has announced an array of new policy measures to curb demand since 2009 to control surging home prices.
The measures, however, have failed to stop prices from doubling since 2009, according to JLL.
With the current price-to-income ratio of 17.3 times, Hong Kong flats are the least affordable in the world.
JLL expects home prices to rise 15 per cent in the next 30 months.