Buildings are seen from Victoria Peak at night in Hong Kong, on Aug 28, 2019. (PAUL YEUNG / BLOOMBERG)
The Hong Kong government is poised to provide 1,530 residential flats in the first quarter of the 2021/22 financial year from April to June, comprising the sale of two government land parcels, residential development projects of the MTR Corporation and the Urban Renewal Authority, as well as private developers’ development projects.
The government said on Wednesday that it will put 15 residential sites on sale in the 2021/22 financial year that can provide about 6,000 residential units
The government said on Wednesday that it will put 15 residential sites on sale in the 2021/22 financial year that can provide about 6,000 residential units. Together with railway property development projects, private development and redevelopment projects, as well as the Urban Renewal Authority’s projects, the potential land supply for the whole year is expected to have a capacity to provide about 16,500 units, 800 units higher than the 15,700 residential units proposed last year.
From a long-term perspective, it is estimated that the completion of private residential units will average over 18,000 units annually in the five years from 2021, an increase of about 5 percent over the annual average of the past five years. However, this is a much slower growth rate compared to the previous years.
Secretary for Development Michael Wong Wai-lun said that the potential residential flat supply figure does not signal that the residential land supply is diminishing.
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“This is because many earmarked land sites have to go through various procedures of legal process and planning process that may take (a) longer time to accomplish. Actually, the 16,500 potential supply figure is higher than the 15,700 units in the 2020/21 financial year,” Wong said at a news conference on Thursday.
“As the near-term home supply remains limited and the local rates may stay lower for longer, we hold onto our view that residential property prices may grow by up to 5 percent in 2021 especially if the border re-opening and economic recovery help to release pent-up demand.” OCBC Wing Hang Bank Economist Carie Li Ruofan said.
“The further reduction in private residential units offered under government development sites signals the potential shortfall in the medium-term residential supply. Shortage in future supply will continue to provide support for private residential capital values,” CBRE Hong Kong’s Head of Research Marcos Chan said.
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It is estimated that the total production of public rental housing in the five-year period from the 2020/21 financial year will be about 101,400 units, comprising over 70,000 public rental housing and Green Form Subsidised Home Ownership Scheme units and over 30,000 other subsidized sale units.
With the government increasing the proportion of new public housing supply target since 2018, the lack of land supply for private housing development is expected to worsen, real estate analysts warned.
The government said earlier that it has identified land for the provision of 316,000 public housing units in the coming decade.
“This problem could be eased if the government rezone the five commercial sites at Kai Tak to residential use. However, for the healthy and sustainable future development of Hong Kong, the government should ensure that the city has sufficient land for commercial development, and not focus solely on residential development,” said Dorothy Chow, senior director of valuation advisory services at Jones Lang LaSalle in Hong Kong.
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The administration is examining the feasibility of rezoning five commercial sites in Kowloon East for residential use, taking into account the latest economic situation and market response and expecting to provide about 5,800 private housing units according to a preliminary estimation.
