Secretary for Development Bernadette Linn speaks on the press conference on the 2024-25 Land Sale Programme at Central Government Offices in Admiralty, Hong Kong, on Feb 29, 2024. (ANDY CHONG / CHINA DAILY)

The government of the Hong Kong Special Administrative Region will tender two new small and medium-sized residential land parcels in Siu Lek Yuen of Sha Tin district in the financial year 2024-25, which it is confident will elicit a favorable market response from property developers.

“The two new residential sites in Siu Lek Yuen are small in size, and since Sha Tin district is a mature community and the site location is excellent, we believe developers will be proactive in bidding for these two land parcels,” Secretary for Development Bernadette Linn Hon-ho said in Thursday’s press conference.

The government will put a total of eight residential sites up for sale in the 2024-25 financial year, with six of them being rollover residential sites from the 2023-24 financial year

In the first quarter of the 2024-25 financial year (April to June), the administration will tender one residential land site in Sha Tin Siu Lek Yuen near the City One MTR station, which will provide 280 residential units.

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“As the government just abolished all property market tightening measures, we have to be cautiously prudential in pushing forward land sales based on the property market situation,” Linn noted.

Regarding the forecast that the land premium revenue for the 2024-25 financial year will reach HK$33 billion ($4.21 billion), the development secretary said the amount is based on the market situation.

The government will put a total of eight residential sites up for sale in the 2024-25 financial year, with six of them being rollover residential sites from the 2023-24 financial year. An estimated 5,690 flats will be provided by development of these eight residential land sites. 

The government expects the proposed land sales of the eight residential sites, along with railway property developments, private development and redevelopment projects, and Urban Renewal Authority projects, to potentially generate land supply in the 2024-25 financial year that is likely to provide 15,150 units, exceeding the annual demand of 13,200 units projected in the Long Term Housing Strategy by about 14 percent. The potential supply of first-hand private residential units for the next three to four years will be around 109,000 units.

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 “In order to prevent future tender cancellations, we suggest that the government take into account the macroeconomic and market conditions in releasing sites for sale and determining reserve price,” said Dorothy Chow, executive director of Colliers Hong Kong’s Asia Valuation & Advisory Services.

“This could involve reviewing the necessity for additional lease land conditions and streamlining the land administration process to facilitate the land supply and fully realize the value of the land, and hence will raise developers' confidence in participating in government tenders,” added Hannah Jeong, head of valuation and advisory services at Colliers Hong Kong.

The government also estimates that the completion of private residential units will average over 19,000 units annually from 2024 to 2029, representing an increase of 15 percent over the annual average of the past five years.