Residential buildings in the Tsuen Wan district of Hong Kong. For the current fiscal year, the government said that it expects to supply enough land to build 35,000 apartments. Jerome Favre / Bloomberg

Govt expects to provide enough land for 35,000 flats this fiscal year

The government denied that there will be a "vacuum period" from 2013 to 2020 with little or no land supply for residential flat development. For the current fiscal year, the government said that it expects to supply enough land to build 35,000 private residential flats.

The Legislative Council (LegCo) Housing Panel held a special meeting on Tuesday to discuss the issue of land supply in the next few years.

Housing Panel chairman Lee Wing-tat and member James To from the Democratic Party said they hoped that the government can disclose more exact sources of land supply to reinforce market perception that "land supply is adequate" and help stabilize local home prices.

Another panel member, Raymond Ho (engineering functional constituency), criticized the government, saying that it has been negligent in converting agricultural land into the residential developments in past years.

In the meeting, Permanent Secretary for Development (Planning and Lands) Thomas Chow stressed that land supply will be adequate in the next few years.

He refuted previous local media reports that there will be a "vacuum period" in land supply for residential flat development from 2013 to 2020. Local media previously reported that after the launch of the Kai Tak residential flat project in 2013, there will be no land supply to build residential flats until 2020 when the government starts its eastern New Territories residential project.

"In the next few years, there will be approximately 30 hectares of industrial or commercial land that will be converted into residential uses. It is estimated that the land use conversion alone will provide nearly 20,000 residential flats in the next few years," Lam said.

"The government will add more land sites in the Land Application List System and speed up the residential project launch of the MTR Corporation and the Urban Renewal Authority. With all these measures, we are confident that land supply will be adequate in the medium and long term," Chow said at Tuesday's LegCo meeting.

In reference to the Kai Tak residential project, Chow said that the Kai Tak site will provide 16,000 residential flats for the market from 2013 to 2019.

"For the current fiscal year, the government is confident that land supply is adequate to build 35,000 residential flats through the initiation of more land sales and the residential projects of the MTR Corporation", Chow said.

If the government's projection is correct, this will exceed the estimates made by Chief Executive Donald Tsang in his late October policy address when the administration pledged that there will be enough land supply to build 20,000 residential flats annually over the next ten years. Financial Secretary John Tsang, in his February budget speech, said that land supply should be adequate to build 30,000 to 40,000 residential flats during this fiscal year.

One property analyst told China Daily, however, that a vacuum in land supply has already existed in the local home market since 2008 and helped the rally in property prices since the beginning of 2009.

"It is clear that land supply is already not sufficient to satisfy market demand since 2008, so the government should speed up the pace of increasing land supply and cater for market demand," Ricacorp Properties Head of Research Patrick Chow told China Daily.

Chow was optimistic that the government's estimate that 35,000 residential flats can be provided during the current fiscal year.

"One MTR residential project may involve more than 10,000 residential flats. I am optimistic that the government's estimate can be realized," Chow added.

China Daily

(HK Edition 07/27/2011 page2)