Hong Kong’s housing supply has declined significantly after a major slowdown in the construction of both public and private housing, local think tank Our Hong Kong Foundation said on Monday.
The think tank has downgraded its forecasts for the annual completion of private housing to an average of 16,000 units over the next five years — down from its previous estimate of 18,500 — due to a slowdown at all stages of the development cycle — from land acquisition to construction.
Some public housing projects would not proceed smoothly beyond the stage of re-zoning due. This is due to delays in things such as land clearance and the need to conduct engineering studies
Stephen Wong Yuen-shan,
deputy executive director of Our Hong Kong Foundation
These figures have not yet taken into account of the adverse impact of COVID-19, said Ryan Ip Man-ki, the foundation's head of land and housing research. He believes the situation is daunting — as the estimated future completion time of projects is insufficient to make up for the past shortfall.
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Ip said some construction sites were shut down for several weeks in February and March. Although many have now resumed work, it is still uncertain whether they can make up for lost time. Meanwhile, the delivery of construction materials has also been delayed due to logistical problems.
According to the Lands Department, two property projects which are about to sell have announced their completion dates will be delayed by two to six months due to the impact of the pandemic, Ip added.
Indeed, before the pandemic broke out, delays had been observed across large and small-scale projects. Sun Hung Kai Properties' Mount Regency phase two — which is to provide more than 1,000 units — was delayed from 2019 until a later completion date in 2020. This is also the case for Kowloon Development’s 63 Pokfulam and MCC Real Estate’s L’Aquatique, which each provide a few hundred units.
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Housing supply problems had already occurred in 2019, with only 14,093 adjusted private residential units completed last year — down 33 percent year-on-year. The foundation is worried the slowdown in the pace of construction will seriously hurt the supply situation from 2020 to 2024.
Public housing has also been affected. The foundation expects the SAR government will only be able to build 20,400 public housing units annually, on average, in the next four years. This is 32 percent lower than the government’s supply target of 30,100.
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Stephen Wong Yuen-shan, the foundation’s deputy executive director, said some public housing projects would not proceed smoothly beyond the stage of re-zoning due. This is due to delays in things such as land clearance and the need to conduct engineering studies.
The foundation called for speeding up all existing land and housing development initiatives, including efforts on re-zoning, new-town developments, topside developments of railways and large-scale land reclamations.
It also said it is essential for the government to review and evaluate existing administrative procedures for land and housing development. This is because excessive regulatory procedures could result in higher costs to society.
