Taller, higher-density towers are the answer to Hong Kong’s property crisis, say developers and industry groups
It’s already known for its imposing, tightly packed skyscrapers.
But the answer to the chronic shortage of housing and commercial property in Hong Kong may be taller buildings of even higher density, according to developers and industry groups.
The world’s least affordable city to live in is facing an inadequate supply of homes to meet growing demand as an increasing number of expats and immigrants floods in, predominantly from mainland China.
In the commercial sector, property consultants said Hong Kong is suffering from a shortage of grade A office supply – the highest quality office space – which could threaten its position as a major business hub within Asia-Pacific.
Building more high-end office towers could help the government to retain the city’s competitive position, said Guy Bradley, chief executive of Swire Properties.
“Relaxing building height regulations and allowing conversion of existing space can increase supply to solve the office space shortage in a short period of time,” said Bradley.
He has proposed a height-limit relaxation for buildings in Taikoo Place, which houses a number of Swire’s high-end office buildings, including the 298-metre-tall One Island East.
“The height limit in Taikoo Shing is about 120 metres. There is room to go up,” he said.
International property consultant JLL has identified 20.1 million square feet of potential office space that could be delivered from future government land sales. It said the plots could be enough to deliver about 10 years of commercial office supply.
The vacancy rate for the entire grade A office market in Hong Kong has fallen from 11.9 per cent at the start of 1999 to just 4.2 per cent at the end of August this year.
JLL has urged the government to look into the issue.
Industry groups have also called for the relaxation of restrictions on plot ratio which, for residential properties, refers to the ratio between the gross floor area of a building and the area of the site it stands on. That, in effect, would increase the density of housing on a given plot.
Doubling the plot ratio of the existing 7,700 hectares of land occupied by 2.5 million homes could immediately double the potential space for housing, according to the Hong Kong Institute of Real Estate Administrators.
For instance, the institute suggested increasing the plot ratio of rural housing land, which spans about 3,380 hectares and 642 villages, from about 0.75 times for three-storey houses, to up to five times for housing of mid-to-high density, or 12 storeys.
Given an average flat size of 600 square feet and 70 per cent coverage, the increase in plot ratio could theoretically produce 848,920 more homes on rural land, assuming it could be developed with few constraints and that 40 per cent of the available land could be developed with a plot ratio of five, according to the institute’s calculations.
The proposal came after Hong Kong’s home prices rose for a 28th consecutive month in July, with a tiny one-bedroom flat measuring 269 square feet in Kowloon Development’s 63 Pokfulam in Sai Ying Pun selling for a staggering HK$11.4 million, or HK$42,238 per square foot.
The Hong Kong Institute of Surveyors has also recommended increasing the plot ratio of residential land, though at a smaller scale, in districts expected to see major development.
The two associations submitted their proposals to a government-appointed committee tasked with proposing ways to plug a predicted shortage of 1,200 hectares of land for long-term housing and economic development.
The committee, known as the Task Force on Land Supply, has spent the past five months consulting the public on 18 possible options. The consultation will close on Wednesday (September 26).